FIRMENICH: A PASSION FOR SMELL AND TASTE SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of FIRMENICH: A PASSION FOR SMELL AND TASTE
GENEVA, SWITZERLAND. At the end-of-year company presentation in December 2010; Patrick Firmenich (fourth generation); CEO of Firmenich International; was pleased to review another successful year. The 115-year-old; Geneva-based flavor and fragrances company had posted record sales; regained its growth leadership position after the worst recession in recent history and received unique industry accolades by winning two of the most prestigious perfumery awards. These confirmed Firmenich's exceptional creativity and sustainable commercial success. It was also a moment of reflection for Marie-Christine Jaeger-Firmenich (third generation); who was going into her ninth year as the "Firmenich Family Steward." When she took over the role; she had expected to step into a well-oiled family governance machine. But things did not quite go as planned. Family members rapidly came to her with multiple requests and new ideas on how to change the rules and decision-making processes in the family's governance system. Her main goal was to preserve the family unity over time while modernizing and updating its governance to face up to the new industrial challenges the family business would encounter in the future. By the summer of 2011; another threat was looming. With the sovereign debt crisis; the Swiss franc took on a renewed status as a refuge currency and skyrocketed in value against the dollar and the euro. While the group was operationally very global; it still had a strong manufacturing base in Switzerland and a strong Swiss franc exposure. How would this affect its future competitiveness? What could be done to control the future impact of foreign exchange fluctuations? Learning objectives: Managing growth; family business governance; technological leadership; competitive strategies.
Swot Analysis of "FIRMENICH: A PASSION FOR SMELL AND TASTE" written by Benoit Leleux, Anne Catrin Glemser includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Firmenich Family facing as an external strategic factors. Some of the topics covered in FIRMENICH: A PASSION FOR SMELL AND TASTE case study are - Strategic Management Strategies, Innovation, Leadership, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the FIRMENICH: A PASSION FOR SMELL AND TASTE casestudy better are - – cloud computing is disrupting traditional business models, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of FIRMENICH: A PASSION FOR SMELL AND TASTE
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in FIRMENICH: A PASSION FOR SMELL AND TASTE case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Firmenich Family, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Firmenich Family 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 FIRMENICH: A PASSION FOR SMELL AND TASTE can be done for the following purposes –
1. Strategic planning using facts provided in FIRMENICH: A PASSION FOR SMELL AND TASTE case study
2. Improving business portfolio management of Firmenich Family
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 Firmenich Family
Strengths FIRMENICH: A PASSION FOR SMELL AND TASTE | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Firmenich Family in FIRMENICH: A PASSION FOR SMELL AND TASTE Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– FIRMENICH: A PASSION FOR SMELL AND TASTE firm has clearly differentiated products in the market place. This has enabled Firmenich Family to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Firmenich Family to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Firmenich Family in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Firmenich Family 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 Firmenich Family is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in FIRMENICH: A PASSION FOR SMELL AND TASTE Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Firmenich Family 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 FIRMENICH: A PASSION FOR SMELL AND TASTE - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Firmenich Family 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 Firmenich Family in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Firmenich Family is present in almost all the verticals within the industry. This has provided firm in FIRMENICH: A PASSION FOR SMELL AND TASTE 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.
Cross disciplinary teams
– Horizontal connected teams at the Firmenich Family 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.
Innovation driven organization
– Firmenich Family is one of the most innovative firm in sector. Manager in FIRMENICH: A PASSION FOR SMELL AND TASTE Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Firmenich Family has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Firmenich Family to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Firmenich Family digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Firmenich Family 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
– Firmenich Family is one of the leading recruiters in the industry. Managers in the FIRMENICH: A PASSION FOR SMELL AND TASTE are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Firmenich Family has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in FIRMENICH: A PASSION FOR SMELL AND TASTE 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.
Weaknesses FIRMENICH: A PASSION FOR SMELL AND TASTE | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FIRMENICH: A PASSION FOR SMELL AND TASTE are -
Need for greater diversity
– Firmenich Family 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the FIRMENICH: A PASSION FOR SMELL AND TASTE 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 Firmenich Family has relatively successful track record of launching new products.
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 Firmenich Family supply chain. Even after few cautionary changes mentioned in the HBR case study - FIRMENICH: A PASSION FOR SMELL AND TASTE, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Firmenich Family vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study FIRMENICH: A PASSION FOR SMELL AND TASTE, 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 Firmenich Family products
– To increase the profitability and margins on the products, Firmenich Family needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Firmenich Family 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Firmenich Family is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study FIRMENICH: A PASSION FOR SMELL AND TASTE can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Firmenich Family, firm in the HBR case study FIRMENICH: A PASSION FOR SMELL AND TASTE needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study FIRMENICH: A PASSION FOR SMELL AND TASTE, in the dynamic environment Firmenich Family has struggled to respond to the nimble upstart competition. Firmenich Family has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Firmenich Family has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– It come across in the case study FIRMENICH: A PASSION FOR SMELL AND TASTE 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 FIRMENICH: A PASSION FOR SMELL AND TASTE can leverage the sales team experience to cultivate customer relationships as Firmenich Family is planning to shift buying processes online.
Opportunities FIRMENICH: A PASSION FOR SMELL AND TASTE | 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 FIRMENICH: A PASSION FOR SMELL AND TASTE are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Firmenich Family 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 Firmenich Family to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Firmenich Family can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Firmenich Family is facing challenges because of the dominance of functional experts in the organization. FIRMENICH: A PASSION FOR SMELL AND TASTE 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.
Leveraging digital technologies
– Firmenich Family 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Firmenich Family can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Firmenich Family can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Firmenich Family 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 FIRMENICH: A PASSION FOR SMELL AND TASTE - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Firmenich Family 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 Firmenich Family 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. Firmenich Family 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
– Firmenich Family can develop new processes and procedures in Leadership & Managing People 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Firmenich Family can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Firmenich Family 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.
Learning at scale
– Online learning technologies has now opened space for Firmenich Family 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.
Better consumer reach
– The expansion of the 5G network will help Firmenich Family to increase its market reach. Firmenich Family 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.
Threats FIRMENICH: A PASSION FOR SMELL AND TASTE External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study FIRMENICH: A PASSION FOR SMELL AND TASTE are -
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. Firmenich Family needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Firmenich Family has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Firmenich Family 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.
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. Firmenich Family can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Firmenich Family is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Firmenich Family in the Leadership & Managing People sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study FIRMENICH: A PASSION FOR SMELL AND TASTE, Firmenich Family 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 .
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Firmenich Family 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 FIRMENICH: A PASSION FOR SMELL AND TASTE .
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.
Regulatory challenges
– Firmenich Family 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.
Environmental challenges
– Firmenich Family 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. Firmenich Family 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 Firmenich Family 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.
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 Firmenich Family.
Weighted SWOT Analysis of FIRMENICH: A PASSION FOR SMELL AND TASTE 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 FIRMENICH: A PASSION FOR SMELL AND TASTE 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 FIRMENICH: A PASSION FOR SMELL AND TASTE 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 FIRMENICH: A PASSION FOR SMELL AND TASTE 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 FIRMENICH: A PASSION FOR SMELL AND TASTE 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 Firmenich Family needs to make to build a sustainable competitive advantage.