Case Detail

Case Summary

Aura: Designing Strategy and Status in Saudi Arabia

Case Number: 5-115-002, Year Published: 2015

HBS Number: KEL924

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Authors: Ned Smith

Key Concepts

Competition, Entrepreneurship, General Management, Growth Strategy, Market Analysis, Marketing Strategy, Organizational Behavior, Reputations, Social Media, Strategic Positioning

Abstract

This case gives students the opportunity to explore the concept of organizational status as a competitive asset. CEO Noura Abdullah of Saudi furniture retailer Aura founded her company as a middle-market furniture and home goods store offering affordable yet design-savvy products. By many accounts, both tangible and intangible, Aura had been a success. By late 2014, Aura had drawn considerable attention from several high-status Saudi wedding planners and media outlets, including Harper’s Bazaar Interiors, Elle Décor, and Martha Stewart Weddings. This attention yielded unusually strong conversion rates (the percentage of visitors to the store who made a purchase). Foot traffic, on the other hand, remained unexpectedly low, leading Abdullah to wonder whether the high-status affiliations had unintentionally signaled to mid-market consumers that they would not be able to afford Aura’s products, keeping such customers away. Students will decide, along with Abdullah, how to handle this unique “problem” as Aura enters a growth phase to other Saudi and Middle Eastern markets.

Learning Objectives

After reading and analyzing the case, students will be able to define organizational status and differentiate it from quality; identify multiple sources of cost savings and revenue generation associated with organizational status; and articulate the importance of not only building but also actively managing status in a manner consistent with a firm’s strategy.

Number of Pages: 16

Extended Case Information

Teaching Areas: Strategy

Teaching Note Available: Yes

Geographic: Saudi Arabia

Industry: Furniture retail

Organization Name: Aura

Organization Size: Small

Decision Maker Position: CEO

Decision Maker Gender: Female

Year of Case: 2014