Bernd Beetz: Creating the New Coty SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bernd Beetz: Creating the New Coty
Considers the creation of one of the world's largest beauty and fragrance companies by Bernd Beetz, appointed chief executive of Coty Inc. in 2001. The case opens with the creation of a new Russian subsidiary in the wake of the global financial crisis, and examines how a virtually new company was created over the previous years. In 1990 the German consumer goods company Benkiser began acquiring fragrance and cosmetics brands with the intent of developing a beauty business. These included the long-established, but relatively small US fragrance company Coty. In 1996 the beauty business was spun off under the name Coty. When Beetz was hired as chief executive, it was still a fragmented collection of recently acquired brands. The case describes how Beetz re-ignited the dormant celebrity fragrance business with the successful launch of a new Jennifer Lopez fragrance line. Fashioning a new entrepreneurial culture based on the principles of "faster, further, freer," Coty hired longstanding executives from other firms and liberated their entrepreneurial capabilities, refreshing brands which had been tarnished into a global mass color cosmetics brand. In 2005 the acquisition of Calvin Klein from Unilever, and its renewal, catapulted Coty into the position of the world's largest fragrance company. The case provides an opportunity to examine the entrepreneurial, cultural, and organizational factors which enable acquired brands and employees to be re-invigorated and molded into a dynamic new global business. It asks if the cultural and other factors behind its rapid growth can sustain the company as it seeks growth much further as a top five beauty company.a??a??a??a??a??
Swot Analysis of "Bernd Beetz: Creating the New Coty" written by Geoffrey G. Jones, David Kiron includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Coty Fragrance facing as an external strategic factors. Some of the topics covered in Bernd Beetz: Creating the New Coty case study are - Strategic Management Strategies, Growth strategy, International business, Mergers & acquisitions and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Bernd Beetz: Creating the New Coty casestudy better are - – increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, supply chains are disrupted by pandemic , geopolitical disruptions, technology disruption, competitive advantages are harder to sustain because of technology dispersion,
cloud computing is disrupting traditional business models, wage bills are increasing, etc
Introduction to SWOT Analysis of Bernd Beetz: Creating the New Coty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bernd Beetz: Creating the New Coty case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coty Fragrance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coty Fragrance operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Bernd Beetz: Creating the New Coty can be done for the following purposes –
1. Strategic planning using facts provided in Bernd Beetz: Creating the New Coty case study
2. Improving business portfolio management of Coty Fragrance
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Coty Fragrance
Strengths Bernd Beetz: Creating the New Coty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coty Fragrance in Bernd Beetz: Creating the New Coty Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Coty Fragrance in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Coty Fragrance has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Bernd Beetz: Creating the New Coty HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Coty Fragrance in the sector have low bargaining power. Bernd Beetz: Creating the New Coty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Coty Fragrance to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Bernd Beetz: Creating the New Coty Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Coty Fragrance has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coty Fragrance has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Coty Fragrance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Coty Fragrance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Coty Fragrance is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Coty Fragrance is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bernd Beetz: Creating the New Coty Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Coty Fragrance has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bernd Beetz: Creating the New Coty Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Coty Fragrance is present in almost all the verticals within the industry. This has provided firm in Bernd Beetz: Creating the New Coty case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Innovation & Entrepreneurship field
– Coty Fragrance is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Coty Fragrance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Coty Fragrance digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Coty Fragrance has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to recruit top talent
– Coty Fragrance is one of the leading recruiters in the industry. Managers in the Bernd Beetz: Creating the New Coty are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Bernd Beetz: Creating the New Coty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bernd Beetz: Creating the New Coty are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Bernd Beetz: Creating the New Coty HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Coty Fragrance has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Coty Fragrance has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Coty Fragrance supply chain. Even after few cautionary changes mentioned in the HBR case study - Bernd Beetz: Creating the New Coty, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Coty Fragrance vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Coty Fragrance is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Coty Fragrance needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Coty Fragrance to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Coty Fragrance has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Coty Fragrance even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Coty Fragrance needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– After analyzing the HBR case study Bernd Beetz: Creating the New Coty, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Bernd Beetz: Creating the New Coty has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Coty Fragrance 's lucrative customers.
Slow to strategic competitive environment developments
– As Bernd Beetz: Creating the New Coty HBR case study mentions - Coty Fragrance takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Coty Fragrance has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Coty Fragrance has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Bernd Beetz: Creating the New Coty | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Bernd Beetz: Creating the New Coty are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Coty Fragrance can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Coty Fragrance is facing challenges because of the dominance of functional experts in the organization. Bernd Beetz: Creating the New Coty case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Coty Fragrance has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Bernd Beetz: Creating the New Coty - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Coty Fragrance to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Coty Fragrance to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Coty Fragrance in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Coty Fragrance can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Coty Fragrance can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Leveraging digital technologies
– Coty Fragrance can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Coty Fragrance to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– Coty Fragrance can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bernd Beetz: Creating the New Coty suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Coty Fragrance to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Coty Fragrance to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Coty Fragrance has opened avenues for new revenue streams for the organization in the industry. This can help Coty Fragrance to build a more holistic ecosystem as suggested in the Bernd Beetz: Creating the New Coty case study. Coty Fragrance can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Coty Fragrance can use these opportunities to build new business models that can help the communities that Coty Fragrance operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Threats Bernd Beetz: Creating the New Coty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bernd Beetz: Creating the New Coty are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Coty Fragrance in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Coty Fragrance business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Coty Fragrance in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Coty Fragrance can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Coty Fragrance needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Coty Fragrance.
Shortening product life cycle
– it is one of the major threat that Coty Fragrance is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Coty Fragrance can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Coty Fragrance needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bernd Beetz: Creating the New Coty, Coty Fragrance may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Coty Fragrance can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Bernd Beetz: Creating the New Coty .
Technology acceleration in Forth Industrial Revolution
– Coty Fragrance has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Coty Fragrance needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Bernd Beetz: Creating the New Coty Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Bernd Beetz: Creating the New Coty needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Bernd Beetz: Creating the New Coty is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Bernd Beetz: Creating the New Coty is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Bernd Beetz: Creating the New Coty is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Coty Fragrance needs to make to build a sustainable competitive advantage.
