Inter Parfums (0IUJ) SWOT Analysis / TOWS Matrix / MBA Resources
Personal & Household Prods.
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Inter Parfums (United Kingdom)
Based on various researches at Oak Spring University , Inter Parfums is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing household debt because of falling income levels, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, increasing commodity prices, talent flight as more people leaving formal jobs,
increasing transportation and logistics costs, supply chains are disrupted by pandemic , etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Inter Parfums can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Inter Parfums, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Inter Parfums 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 Inter Parfums can be done for the following purposes –
1. Strategic planning of Inter Parfums
2. Improving business portfolio management of Inter Parfums
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Personal & Household Prods. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Inter Parfums
Strengths of Inter Parfums | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Inter Parfums are -
Successful track record of launching new products
– Inter Parfums has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Inter Parfums 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.
Organizational Resilience of Inter Parfums
– The covid-19 pandemic has put organizational resilience at the centre of everthing Inter Parfums does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Personal & Household Prods.
– Inter Parfums is one of the leading players in the Personal & Household Prods. industry in United Kingdom. Over the years it has not only transformed the business landscape in the Personal & Household Prods. industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Inter Parfums in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Inter Parfums 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.
Digital Transformation in Personal & Household Prods. industry
- digital transformation varies from industry to industry. For Inter Parfums digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Inter Parfums 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.
Low bargaining power of suppliers
– Suppliers of Inter Parfums in the Consumer/Non-Cyclical sector have low bargaining power. Inter Parfums has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Inter Parfums to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Inter Parfums has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Inter Parfums staying ahead in the Personal & Household Prods. industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Inter Parfums is one of the most innovative firm in Personal & Household Prods. sector.
Diverse revenue streams
– Inter Parfums is present in almost all the verticals within the Personal & Household Prods. industry. This has provided Inter Parfums 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.
Training and development
– Inter Parfums has one of the best training and development program in Consumer/Non-Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– Inter Parfums has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Inter Parfums to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Inter Parfums has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal & Household Prods. industry. Secondly the value chain collaborators of Inter Parfums have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Inter Parfums | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Inter Parfums are -
Need for greater diversity
– Inter Parfums 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.
Low market penetration in new markets
– Outside its home market of United Kingdom, Inter Parfums needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Personal & Household Prods. industry
– The stress on hiring functional specialists at Inter Parfums 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.
Compensation and incentives
– The revenue per employee of Inter Parfums is just above the Personal & Household Prods. industry average. It 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.
Increasing silos among functional specialists
– The organizational structure of Inter Parfums is dominated by functional specialists. It is not different from other players in the Personal & Household Prods. industry, but Inter Parfums needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Inter Parfums to focus more on services in the Personal & Household Prods. industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Inter Parfums is one of the leading players in the Personal & Household Prods. industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Personal & Household Prods. industry in last five years.
Aligning sales with marketing
– From the outside it seems that Inter Parfums needs to have more collaboration between its sales team and marketing team. Sales professionals in the Personal & Household Prods. industry have deep experience in developing customer relationships. Marketing department at Inter Parfums can leverage the sales team experience to cultivate customer relationships as Inter Parfums is planning to shift buying processes online.
Lack of clear differentiation of Inter Parfums products
– To increase the profitability and margins on the products, Inter Parfums needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Inter Parfums has a high cash cycle compare to other players in the Personal & Household Prods. industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on Inter Parfums ‘s star products
– The top 2 products and services of Inter Parfums still accounts for major business revenue. This dependence on star products in Personal & Household Prods. industry has resulted into insufficient focus on developing new products, even though Inter Parfums has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Inter Parfums has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Personal & Household Prods. industry using digital technology.
Inter Parfums Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Inter Parfums are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Inter Parfums can use these opportunities to build new business models that can help the communities that Inter Parfums operates in. Secondly it can use opportunities from government spending in Personal & Household Prods. sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Inter Parfums can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Inter Parfums has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Personal & Household Prods. sector. This continuous investment in analytics has enabled Inter Parfums to build a competitive advantage using analytics. The analytics driven competitive advantage can help Inter Parfums to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Inter Parfums can use the latest technology developments to improve its manufacturing and designing process in Personal & Household Prods. sector. 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.
Learning at scale
– Online learning technologies has now opened space for Inter Parfums 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.
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 Inter Parfums 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.
Buying journey improvements
– Inter Parfums can improve the customer journey of consumers in the Personal & Household Prods. industry by using analytics and artificial intelligence. It 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Inter Parfums in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Personal & Household Prods. industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Inter Parfums to increase its market reach. Inter Parfums 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.
Loyalty marketing
– Inter Parfums has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Inter Parfums can develop new processes and procedures in Personal & Household Prods. 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Inter Parfums is facing challenges because of the dominance of functional experts in the organization. Inter Parfums can utilize new technology in the field of Personal & Household Prods. industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Inter Parfums 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 Inter Parfums to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Inter Parfums External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Inter Parfums are -
Technology acceleration in Forth Industrial Revolution
– Inter Parfums has witnessed rapid integration of technology during Covid-19 in the Personal & Household Prods. industry. As one of the leading players in the industry, Inter Parfums needs to keep up with the evolution of technology in the Personal & Household Prods. 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 Personal & Household Prods. industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Inter Parfums can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Inter Parfums in the Personal & Household Prods. sector and impact the bottomline of the organization.
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 Inter Parfums.
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. Inter Parfums needs to understand the core reasons impacting the Personal & Household Prods. industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Inter Parfums 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 Personal & Household Prods. industry.
Consumer confidence and its impact on Inter Parfums 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 Personal & Household Prods. industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Inter Parfums is facing in Personal & Household Prods. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Inter Parfums may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Personal & Household Prods. sector.
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 Inter Parfums business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Inter Parfums 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. Inter Parfums can take advantage of this fund but it will also bring new competitors in the Personal & Household Prods. industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Inter Parfums will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal & Household Prods. industry are lowering. It can presents Inter Parfums with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal & Household Prods. sector.
Weighted SWOT Analysis of Inter Parfums Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Inter Parfums 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 Inter Parfums 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 Inter Parfums 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 Inter Parfums 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 Inter Parfums needs to make to build a sustainable competitive advantage.
