WEEK 3 DISCUSSION - Essay Example

Strategic Intent John Jones Introduction A SWOT Analysis will quickly tell the “snapshot” of a company much like any photograph will give a two-dimensional description of the subject. One probably won’t be able to tell the Strategic Intent, for to succeed in business a company not only has to say where its competitors are today but also at a given time in the future. Therefore, what is the Strategic Intent of Albani Perfumes? How can it determine the intent of its major competitor? Where will Albani and the scent business in general be one year, ten years from now?

Description of Theories/Core Concepts Using Michael Porter’s Five Forces of Analysis and the SWOT/SCOT analysis, one can quickly determine Strategic Intent of a company. Porter is clear in explaining that because a company is profitable and effective at a given moment; that is not necessarily the benchmark of how a company will perform in the future. Like science’s description of life on Earth, the corporation must continually evolve and become more efficient as it maintains a keen eye on its competitors.

Most economists like to use the Japanese as a business model when it comes to efficiency and profitability. True the country’s top businesses seized upon a time period where Western companies seemed to be asleep at the switch. Yet their competition has seized upon strategy and in a sense is beating the country’s businesses at their own game and it appears several decades later that the opposition is winning (Porter). Analysis/Explanation/Discussion In using the Japanese model, Harvard Business Review points out that in 1970 Komatsu was a tiny bulldozer company hardly known outside Japan and had a minute sales fraction of Caterpillar, the American giant in the industry.

Fifteen years later, Komatsu had expanded to a $2.8 billion company with as many product lines as their mammoth opposition. As well, they had expanded into the emerging industrial robotics area (Hamel). Did Caterpillar concern themselves with Komatsu in 1970? It is doubtful but had they done a Strategic Intent analysis at the time, they may not have had such a tremendous slice of profit removed in 1985. In a sense, Albani Perfumes is the current Goliath in its market of Latin America.

With current sales of $10 million, it is still a relatively small company but has managed to do well against its current competitors. Yet as discussed in Week 2, China is making headway into the market with knockoff perfumes. It could probably be argued that Albani would not win a trade war with the world’s fastest growing economy and this would be rated at zero, Strong Negative Impact on potential profitability. Chinese companies have the advantage of being backed by their governments and could very well operate at a loss in order to drive the competition out of business, a strategy they learned well from the American company Wal Mart.

So Albani’s best strategy would be to stress quality and authentic products. Their perfume is French and the manufacturers are old and well established. The scent is not some cheap Asian imitation that probably doesn’t smell as sweet and alluring, the entire purpose of buying and wearing perfumes. Conclusion Like the Aesop fable The Ant and the Grasshopper, it is not enough to look at one’s current rosy situation and rest on one’s laurels. Like the laborious ants, one must prepare for the future and whatever turmoil it brings.

Most of the business world can identify with the threat that Albani Perfumes faces, a huge country more than prepared to make itself number one in any way possible. Yet at the same time Albani needs to understand the strategic intent of its other competitors. Extending the Conversation Are there any manufacturers in the Miami area who produce their own versions of the knockoff perfumes? Much like companies like Proctor and Gamble, who sells cheaper “store brand” versions of its products like Tide, Albani might try beating the Chinese at their own game by exporting its own imitation scents.

ReferencesPorter, Michael, “What is Strategy?”, Harvard Business Review, December 1996, accessed July 10, 2012, http://www.ipocongress.ru/download/guide/article/what_is_strategy.pdf.Hamel, Gary and Prahalad, CK, “Strategic Intent”, Harvard Business Review, July 2005, accessed July 10, 2012, http://hbr.org/2005/07/strategic-intent/ar/1..