Arabic Perfumes and the Global Fragrance Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Arabic Perfumes and the Global Fragrance Market
The Middle East market has been targeted by global perfumeries as the region to grow revenues. This case reviews the strategies of Elizabeth Arden, Coty, EstA?e Lauder, Christian Dior, L'OrA?al, and Revlon in the United Arab Emirates (UAE). Competitive rivalry is intense with these world players, as well as numerous established regional perfumeries such as the Kingdom of Saudi Arabia, the House of Ajmal, and Swiss Arabia. Social media advertising implemented in concert with celebrity appearances, such as Britney Spears, has made the UAE a popular venue for marketing and launching new fragrances. The marketing channels that are growing are shifting away from high-end department stores to mass merchandisers and duty-free airport retailers. This case compares these targeted global strategies to the regional perfumeries with an eye toward assessing whether the regional perfumeries are fully exploiting their market opportunities.
Authors :: Laura L. Matherly, Anup Nandialath, Claire Richards
Swot Analysis of "Arabic Perfumes and the Global Fragrance Market" written by Laura L. Matherly, Anup Nandialath, Claire Richards includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Perfumeries Uae facing as an external strategic factors. Some of the topics covered in Arabic Perfumes and the Global Fragrance Market case study are - Strategic Management Strategies, Marketing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Arabic Perfumes and the Global Fragrance Market casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, technology disruption, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Arabic Perfumes and the Global Fragrance Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Arabic Perfumes and the Global Fragrance Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Perfumeries Uae, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Perfumeries Uae 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 Arabic Perfumes and the Global Fragrance Market can be done for the following purposes –
1. Strategic planning using facts provided in Arabic Perfumes and the Global Fragrance Market case study
2. Improving business portfolio management of Perfumeries Uae
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Perfumeries Uae
Strengths Arabic Perfumes and the Global Fragrance Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Perfumeries Uae in Arabic Perfumes and the Global Fragrance Market Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Perfumeries Uae are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Perfumeries Uae is one of the leading recruiters in the industry. Managers in the Arabic Perfumes and the Global Fragrance Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Perfumeries Uae has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Arabic Perfumes and the Global Fragrance Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Perfumeries Uae 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 Perfumeries Uae is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Arabic Perfumes and the Global Fragrance Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Perfumeries Uae has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Perfumeries Uae 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Arabic Perfumes and the Global Fragrance Market firm has clearly differentiated products in the market place. This has enabled Perfumeries Uae to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Perfumeries Uae to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Perfumeries Uae is present in almost all the verticals within the industry. This has provided firm in Arabic Perfumes and the Global Fragrance Market 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.
Superior customer experience
– The customer experience strategy of Perfumeries Uae in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Perfumeries Uae has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Arabic Perfumes and the Global Fragrance Market 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.
Organizational Resilience of Perfumeries Uae
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Perfumeries Uae does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Perfumeries Uae in the sector have low bargaining power. Arabic Perfumes and the Global Fragrance Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Perfumeries Uae to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Leadership & Managing People field
– Perfumeries Uae 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 Perfumeries Uae in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Arabic Perfumes and the Global Fragrance Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Arabic Perfumes and the Global Fragrance Market are -
Slow decision making process
– As mentioned earlier in the report, Perfumeries Uae 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. Perfumeries Uae 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Laura L. Matherly, Anup Nandialath, Claire Richards suggests that, Perfumeries Uae is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Low market penetration in new markets
– Outside its home market of Perfumeries Uae, firm in the HBR case study Arabic Perfumes and the Global Fragrance Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Arabic Perfumes and the Global Fragrance Market 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 Perfumeries Uae 's lucrative customers.
Slow to strategic competitive environment developments
– As Arabic Perfumes and the Global Fragrance Market HBR case study mentions - Perfumeries Uae 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, Perfumeries Uae 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.
Aligning sales with marketing
– It come across in the case study Arabic Perfumes and the Global Fragrance Market that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Arabic Perfumes and the Global Fragrance Market can leverage the sales team experience to cultivate customer relationships as Perfumeries Uae is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Arabic Perfumes and the Global Fragrance Market, is just above the industry average. Perfumeries Uae needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
No frontier risks strategy
– After analyzing the HBR case study Arabic Perfumes and the Global Fragrance Market, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Lack of clear differentiation of Perfumeries Uae products
– To increase the profitability and margins on the products, Perfumeries Uae needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Perfumeries Uae 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.
Opportunities Arabic Perfumes and the Global Fragrance Market | 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 Arabic Perfumes and the Global Fragrance Market are -
Learning at scale
– Online learning technologies has now opened space for Perfumeries Uae 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Perfumeries Uae can use these opportunities to build new business models that can help the communities that Perfumeries Uae operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Perfumeries Uae in the consumer business. Now Perfumeries Uae can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Perfumeries Uae has opened avenues for new revenue streams for the organization in the industry. This can help Perfumeries Uae to build a more holistic ecosystem as suggested in the Arabic Perfumes and the Global Fragrance Market case study. Perfumeries Uae can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Perfumeries Uae to increase its market reach. Perfumeries Uae will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Low interest rates
– Even though inflation is raising its head in most developed economies, Perfumeries Uae can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Perfumeries Uae is facing challenges because of the dominance of functional experts in the organization. Arabic Perfumes and the Global Fragrance Market 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
– Perfumeries Uae 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 Arabic Perfumes and the Global Fragrance Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Perfumeries Uae to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Perfumeries Uae can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Perfumeries Uae can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Perfumeries Uae in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Perfumeries Uae can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Arabic Perfumes and the Global Fragrance Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Perfumeries Uae can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Arabic Perfumes and the Global Fragrance Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Arabic Perfumes and the Global Fragrance Market are -
Environmental challenges
– Perfumeries Uae needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Perfumeries Uae can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Consumer confidence and its impact on Perfumeries Uae demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Perfumeries Uae needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Regulatory challenges
– Perfumeries Uae 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 Leadership & Managing People industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Perfumeries Uae with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Perfumeries Uae has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Perfumeries Uae needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Increasing wage structure of Perfumeries Uae
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Perfumeries Uae.
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 Perfumeries Uae in the Leadership & Managing People 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 Perfumeries Uae business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Arabic Perfumes and the Global Fragrance Market, Perfumeries Uae may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
High dependence on third party suppliers
– Perfumeries Uae high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Perfumeries Uae can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Arabic Perfumes and the Global Fragrance Market 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 Arabic Perfumes and the Global Fragrance Market 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 Arabic Perfumes and the Global Fragrance Market 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 Arabic Perfumes and the Global Fragrance Market 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 Arabic Perfumes and the Global Fragrance Market 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 Perfumeries Uae needs to make to build a sustainable competitive advantage.
