Strategic Management Assignment 02- Case Analysis Inst.docx

Strategic Management
Assignment 02- Case Analysis
Instructions:
• Read the attached case “Aura: Designing Strategy and Status
in Saudi Arabia.”
a) Prepare a Report (not more than 10 pages)
The Assignment should cover the following points:
1. Brief Overview (Describe the Company and Identify the
Industry)
2. Situation Analysis (SWOT/PESTLE/Porter’s Five
Forces/4P’s)
3. Key Issues (Symptoms/Problems)
4. Alternatives (A set of strategic alternatives that have a
potential to solve the problem)
5. Evaluation of Alternatives (How well does the alternative
address the issue stated? / List
the pros and cons of each alternative)
6. Recommendation
7. Implementation Plan (Steps to follow constrained by budget
and timeline/Short term and
long term plan/Always look for appendices)

8. Risk and Mitigation (List all the challenges that would
prevent the company from
successfully implementing the proposed solution/List risk
mitigation strategies for every
challenge)
a) Rubric for Report: (Group)
Category Failed Partially Mostly Absolutely
Key Issue(s) Did not identify Key
Issues
Partially identified Key
Issues
Mostly identified Key
Issues
Absolutely identified
Key Issues
Relevant Factors Did not analyze Relevant
Factors
Partially analyzed
Relevant Factors
Mostly analyzed
Relevant Factors
Absolutely analyzed
Relevant Factors

Alternatives
(Identify)
Did not develop realistic
Alternatives
Partially developed
realistic Alternatives
Mostly developed
Absolutely developed
Alternatives
(Evaluate)
Did not evaluate
Alternatives
Partially evaluated
Alternatives
Mostly evaluated
Alternatives
Absolutely evaluated
Alternatives
Recommendation
Did not select a
Recommendation to
address key issues

Partially selected a
Recommendation to
address key issues
Mostly selected a
Recommendation to
address key issues
Absolutely selected a
Recommendation to
address key issues
Implementation
Plan
Did not present a feasible
implementation plan
Partially presented a
feasible
implementation plan
Mostly presented a
feasible
implementation plan
Absolutely presented a
feasible
implementation plan
� 1

©2015 by the Kellogg School of Management at Northwestern
University. This case was prepared by Professor Ned Smith and
Andrea Meyer. Cases are developed solely as the basis for class
discussion. Cases are not intended to serve as endorsements,
sources
of primary data, or illustrations of effective or ineffective
management. To order copies or request permission to
reproduce materials,
call 847.491.5400 or e-mail [email protected] No part of this
publication may be reproduced, stored in a retrieval
system, used in a spreadsheet, or transmitted in any form or by
any means—electronic, mechanical, photocopying, recording, or
otherwise—without the permission of Kellogg Case Publishing.
NED SMITH AND ANDREA MEYER 5-115-002
Aura:
Designing Strategy and Status in Saudi Arabia
In late 2014, Noura F. K. Abdullah, CEO of Saudi furniture
retailer Aura, reflected on all that
had happened in the three years since she had launched the
company. She had founded Aura with
the intention of targeting the large mid-market of Saudi Arabia,
but now her company had gotten
a lot of positive press in high-end media outlets and had ended
up drawing the comparatively
small population of wealthy Saudis into its stores. Aura had
experienced some major wins,
attracting the attention of media, fashion bloggers, and wedding
designers, and had posted several

impressive statistics, especially for a young retail organization.
In particular, Aura had strong
conversion rates—the percentage of visitors to the store who
made a purchase—and social media
engagement (more than 61,000 followers on Instagram). But the
expanded set of retail statistics
was not consistent. For the ups, like conversion rates, there
were downs—notably foot traffic.
Abdullah wondered if the inconsistency was somehow related.
Could the leading, positive
statistics explain the trailing ones? Answering this question
would have important implications
for Aura’s growth strategy. Abdullah had earned an MBA with a
focus on strategy and
management, so she knew to anticipate unintended results. But
she also knew that it was
imperative to respond to unintended outcomes, either by
correcting for them or absorbing them,
even if it meant altering course.
The Home Furnishing Retail Sector
Global Market
The global home furnishing retail sector was projected to have a
value of US$726.7 billion by
2016, an increase of 31.4 percent from 2011.1 The sector
included bedroom, dining room, home
office, and living room furniture as well as carpets, rugs, and
textiles (such as beddings, cushions,
linens, and towels). Europe was the largest geographic segment
of the global market, at US$242.5
billion (43.8 percent), compared to the Americas’ US$173.5
billion (31.4 percent), Asia-Pacific’s
US$117.5 billion (21.3 percent), and the rest of the world at
US$19.6 billion (3.5 percent).2

Amid a fragmented and highly competitive sector, the largest
players were IKEA, Wal-Mart,
Bed Bath & Beyond and Macy’s. IKEA, the global leader,
accounted for 6.5 percent of the
sector’s value in 2011, and Wal-Mart followed with 3.8 percent
share.3
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AURA 5-115-002
2 KELLOGG SCHOOL OF MANAGEMENT
Middle Eastern Market
Middle Eastern markets were some of the fastest-growing retail
markets in the world. High
disposable incomes, an urban population, and the attitude that
malls were entertainment
destinations all contributed to the growth.
In 2012 Saudi Arabia and the United Arab Emirates (UAE) were
identified as the two
markets with the most potential in the Middle East. They had
been the dominant Middle Eastern
markets for over a decade and were forecast to continue to

dominate because the majority of the
region’s retail investment was centered in these two countries.4
Compared to the UAE, the Saudi
retail industry was not as developed, but the size of the Saudi
population and its young
demographic made it favorable.5 (See Exhibit 1 and Exhibit 2.)
The United Nations had forecast
that the population of Saudi Arabia would rise to 28.6 million
by 2015, with 45 percent of the
population being of prime purchasing age: between 19 and 45.6
By 2013, Saudi Arabia had
already surpassed that forecast, with a population exceeding 29
million, making it the most
populous country in the GCC (Gulf Cooperation Council
countries, namely Bahrain, Kuwait,
Oman, Qatar, Saudi Arabia, and the UAE) by far.7 The gross
domestic product of Saudi Arabia
was US$727 billion in 2013, making it the only Arab country to
be recognized as one of the
world’s leading influential economies.8 Similarly, the 2014
Saudi Arabia Retail Report forecast a
rising average net household income from around US$39,494 in
2015 to US$44,421 by 2018.9
Saudi Arabian Market
With retail spending on the rise in general in Saudi Arabia,
spending on furniture items in
particular was expected to grow at a rate of 13.7 percent
annually until 2017.10 Furniture imports
into the country totaled 2.2 billion Saudi Arabian riyals (US$5.9
million)11 in 2014, prompting
some international sales and marketing professionals to call
Saudi Arabia “the most buoyant
interiors market in the Middle East.”12

Given that 90 percent of the Saudi population lived in cities,
shopping malls typically had a
sizeable customer pool nearby.13 The major cities in Saudi
Arabia were expected to see a strong
increase in retail, with the capital, Riyadh, alone expected to
add 600,000 square meters or more
of leasable retail area, in addition to its existing 2.3 million.14
The two largest cities, Riyadh and
Jeddah, had about sixty malls in total, representing the bulk of
Saudi Arabia’s retail sector.
Despite substantial market growth from 2011 onward, Saudi
Arabia trailed behind other markets
in the region, indicating an opportunity for future expansion of
the retail infrastructure.15
Smaller shopping malls were becoming a trend as early as 2012.
These malls featured up-
and-coming fashion brands, gourmet grocery stores, and
specialty home furnishing shops, all
surrounded by small, elegant restaurants and cafes.16
C O M P E T I T I V E L A N D S C A P E
The retail industry in Saudi Arabia was dominated by a few
large, family-owned businesses
that operated across numerous other sectors, including real
estate. These large businesses owned
shopping malls and acquired exclusive franchising agreements
from international brands to set up
retail outlets in those malls.17 In addition to this concentrated
power base of ownership, there were
a few smaller companies with five to ten international
franchises. Finally, small retailers, which
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5-115-002 AURA
KELLOGG SCHOOL OF MANAGEMENT 3
owned less than five shops each, were an important sector
because of their competitive pricing in
the medium- to low-price category.18
C U L T U R A L F A C T O R S
Cultural norms in Saudi Arabia presented some challenges for
retailers. For example, Saudi
women were not allowed to drive, which limited their access to
shopping. In addition, malls had a
“family-only” policy on weekends, which meant that single
men, who otherwise could move
about freely, could not access malls without family during those
times.19
In Saudi Arabia, “the act of buying goods was seen as part of a
lifestyle and cultural activity,
and not only driven by practical or economic factors. Meeting
others, being seen and getting to be
recognized amongst one’s peers in the social ladder was a part
of one’s identity,” a local
consultancy reported.20

Malls also played an important role as entertainment, given that
Saudi culture forbade
cinemas and alcohol. The region’s hot climate also limited
outdoor activities, making air-
conditioned malls attractive. As a result of these factors,
shopping was treated as a leading leisure
activity.21
Finally, religious tourism played a key role in Saudi Arabia’s
retail sector. About 2.5 million
Muslims came to Saudi Arabia each year as religious pilgrims
performing Hajj (a pilgrimage to
Mecca that all adult Muslims must undertake at least once a
lifetime), and many more Muslims
visited the country to perform Umrah (a pilgrimage to Mecca
undertaken at any time) at other
times of the year.22 Although most pilgrims went to Mecca and
Medina, they traveled via Jeddah,
the principal international gateway for the pilgrimages. Many of
the pilgrims spent time shopping
in Jeddah after their journey, boosting the city’s retail sector.23
Despite Saudi Arabia’s unique challenges, it remained an
enticing retailing opportunity. Said
one representative on the Middle East and North Africa
(MENA) team of a real estate investment
firm, “Retailers across the spectrum are looking to enter this
market to cater to a large and
growing domestic demand, driven by its sizeable young
population.”24
Millennial Customers
Millennials—those under age 35, who made up nearly half the
Saudi population—drove
Saudi Arabian retail growth. Furniture retailers characterized

millennials as “more style conscious
and not looking for the same types of furniture they grew up
with.”25 Some described millennials
as “not interested in longevity or keeping their sofa for 25 or 30
years. They will have it until they
change their minds and want to upgrade to something different,
just like they do with their cell
phones.”26
Millennials sought uniqueness, new patterns, and new colors,
and reaching them required
retailers to be online. “Research has proven that millennials
explore brands and purchases on
social networks,” said the vice president of one furniture maker.
“They want to engage in real
conversations with the brand, as well as share images of items.
They like to get recommendations
from peers.”27 Companies looked to social media platforms like
Facebook, Twitter, and Instagram
to reach millennial buyers.28
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AURA 5-115-002

Saudi Luxury Retail
According to a 2012 survey that covered 326 retailers from 200
cities, Saudi Arabia was the
tenth most sought-after destination for international retailers in
the world.29 “Demand for luxury
products was rising, and Saudis were known to splurge on
luxury items. An increasing number of
young and affluent consumers prefer to spend on premium
clothing and accessories, have high
brand inclination, and aspire to emulate Western lifestyles,” one
report said.30
Two luxury retailer executives described their views of the
Saudi luxury retail market:
The retail industry in the region has grown at a fast pace and at
the same time consumers
have become increasingly sophisticated. Today in the luxury
retail industry, we see a lot
of repetition; almost in each mature market you will find the
same brands next to each
other, the same merchandise and even the same decoration and
window displays. Our
GCC consumer is a well-traveled and savvy one, therefore we
have to start customizing
more products and concepts with him or her in mind. I believe
that is where we can have
an edge and establish GCC as a premier shopping destination.
—Ashraf Abu Issa, chairman and CEO, Abu Issa Holding31
In a fiercely competitive environment, we are seeing an
increasingly demanding
consumer—one who is more assertive, digitally savvy and
determined in his choice, who

is looking for uniqueness and differentiation to affirm his
identity. Quality of service,
depth of offer and an aggressive events schedule coupled with
innovative concepts are
more vital than ever to ensure continued consumer interest.
—Patrick Chalhoub, co-CEO, Chalhoub Group32
Noura Abdullah and Aura
Noura Abdullah was born in Saudi Arabia and lived there most
of her life, except when she
earned a degree in molecular genetics from King’s College
London in 2001 and an MBA from
the University of Chicago Booth School of Business in 2009.
Furniture design and interior
decorating had always been her passions.
Company History
While in graduate school, Abdullah developed a new concept:
that of a retail store that sold
home fashion that appealed to younger, style-conscious Saudi
consumers. The style would be
Middle Eastern but with a Western influence, giving the brand a
distinctive style. The store would
sell only exclusive, branded items. Having found a gap in the
market for something she was
passionate about, Abdullah developed a business plan.
Abdullah’s value proposition was to offer a full line of home
fashion—dining, living,
bedroom, tableware, home accessories, and lifestyle items—
aiming to be a “one-stop-shop” for
creating a personal look for young, confident Saudis who had
sophisticated tastes but middle-

income pocketbooks. Abdullah wanted her business to become
the brand of choice for young
Middle Eastern consumers hoping to combine the best of East
and West in their home décor, and
to eventually become the leading home fashion brand in the
region. Au
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5-115-002 AURA
When considering a name for her company, Abdullah initially
wanted to brand products with
Saudi female names. But market research showed that Saudi
consumers associated foreign brands
with quality. “The value of the product was diminished when
people attributed a Saudi name [to
the brand]. We are a Saudi company catering to Middle Eastern
customers, but most people
attribute our company, with a name like Aura, as having some
foreign affiliation,” explained
Abdullah.33
Speed to market—offering new products frequently—was an
integral part of the Aura
concept. “Even if the market is saturated, with any fashion-
oriented products, if you’re not
moving at a fast, fashion-forward pace—a cycle of a minimum

of two new major collection
introductions a year—you’ll be left behind,” Abdullah said.
“Aura has two major and two minor
cycles. We’re trying to do for furniture what Zara does for
clothing.”34
Abdullah developed her business plan based on these concepts
and, after participating in a
new venture competition at school, refined the business plan
and pitched it to investors. She
succeeded in securing funding. Abdullah opened the first Aura
store in April 2010 in Riyadh. She
chose to open in the city’s newest shopping center, the
Panorama Mall.
Style and Store Design
Abdullah positioned the company as an affordable, tasteful
alternative to Middle Eastern
luxury brands as well as a contrast to the “boring beige”
Western-style furniture that IKEA and
Pottery Barn were selling in Saudi Arabia. In 2014 Aura was
shortlisted by Harper’s Bazaar
Middle East as the best furniture brand.
The store design created a theatrical feel, using strong accent
lighting that showcased
products like jewels and keeping price tags discreet so as not to
interrupt the visual aesthetic of
the store. Reflecting Aura’s East/West blend, the company’s
logo and all in-store
communications were designed in both Arabic and English (see
Exhibit 3). At the center of the
store, a white framed structure paneled in glass35 featured the
Iconic collection, Aura’s specially
commissioned products that blended Middle Eastern heritage

with a modern twist (see Exhibit
4). For example, Aura’s dallahs—traditional pots used for
brewing Arabic coffee—were
decorated with creative patterns and colors to put a twist on the
pots’ traditional form.36 In
addition to its Iconic collection, Aura had three other style
categories (Modern Classic, Trend,
and Contemporary), each with their own colors and themes that
were displayed in room sets
around the store and updated seasonally.
Marketing Efforts
At its founding Aura did very little marketing “because it is
very expensive to put ads in
newspapers and magazines,” explained Abdullah. “[Instead] we
put time and energy, rather than
money, into approaching media outlets. We also made sure our
products were beautifully
photographed.”37
To that end, Aura set up an account on Facebook in 2011 and on
Twitter in 2012. However,
Aura’s major win came with the arrival of Instagram, which
Aura joined in October 2012. “In
Saudi Arabia, Instagram is the most prominent for social
media,” Abdullah said.38
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AURA 5-115-002
Another marketing tactic involved sponsoring a design
competition in partnership with Saudi
Design Week, a weeklong celebration of local and international
design in Saudi Arabia. The
competition asked participants to design a mid-priced
upholstered chair suitable for use in a living
room or bedroom, incorporating Aura’s signature blend of
international design with Arabian
trends. “Our creative director is actually Saudi, so promoting
local talent is close to our hearts.
With this competition, we are keen to showcase as many of the
designs as we receive and hope
the young artists that partake in it can become globally
recognized in the future,” explained an
Aura spokesperson.39 The competition’s winner created a
modern take on traditional Khaleeji
floor seating for the next generation of Arabs.40
Aura also pursued business-to-business (B2B) opportunities.
Abdullah knew that Aura
needed to generate extra cash from B2B, but when Aura first
launched, it lacked the resources to
go after the big residential projects or hotels. Instead, the Aura
team decided to actively target an
area of smaller scale—wedding planners. The team contacted
well-known wedding planners in
the region and found them to be receptive. “We had business-to-
business relationships with the
five main wedding planners for lavish Middle Eastern

weddings—these are the kinds of events
with 2,500 to 3,000 guests,” Abdullah said.41 “We provide
quality products at value prices, and
they continued coming back to us.”42
Aura’s Competition
Whereas large players such as IKEA and Wal-Mart focused on
economies of scale for low
prices as their edge, boutique players such as Aura focused on
innovative, fashion-forward
designs. Conceivably, many types of retail stores, including
furniture stores, specialty stores,
discounters, and e-commerce homewares retailers, could be
competition for Aura.
Within the boutique sector, Aura faced competition from Zara,
which had launched Zara
Home to sell home textiles and had 408 stores in forty-four
countries, including Saudi Arabia, by
2014.43 Akin to Aura’s four collections—Modern Classic,
Contemporary, Trend, and Iconic—
Zara Home had Contemporary, Classic, Ethnic, and White,
which were available globally.44
U.S. retailer Pottery Barn entered Saudi Arabia in 2011,
bolstered by its success in Kuwait
and Dubai.45 Pottery Barn did not alter its retail store format
for the Saudi market, preferring to
provide Saudi customers with the same retail shopping
experience that its customers had in other
markets. Each store was organized into living rooms, outdoor
spaces, dining rooms, media,
seasonal items, and bedrooms and bathrooms. “It’s important
for customers to know that they can
always look to Pottery Barn for casual, comfortable designs at a

great value,” said Laura Alber,
president and CEO of Pottery Barn’s parent company, Williams-
Sonoma.46 Pottery Barn opened
its first Saudi store in Riyadh on the ground floor of the Red
Sea Mall; a second store in Jeddah’s
Mall of Arabia in 2011;47 and a third store in Mall of Dhahran
in 2012.48 The company had no
social media presence on Twitter, Facebook, or Instagram for its
Saudi Arabian stores.
Ethan Allen Interiors, a U.S. home furnishings retailer founded
in 1932 and named after a
U.S. Revolutionary War hero to emphasize its early-American
furniture style, entered the Saudi
Arabian market in 2013 with a store in Jeddah. During its
launch, Ethan Allen partnered with
Saudi Prince Mansour Bin Muqrin Bin Abdulaziz, who
described the Ethan Allen Design Center
as “Jeddah’s new, exclusive home fashion destination.”49 The
company showcased a different
look in Saudi Arabia (as evidenced by the photos on its main
Facebook page compared to its
Saudi one; see Exhibit 5) and was considered a high-end player
in the Saudi Arabian market. Au
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5-115-002 AURA

Known for its classic style, Ethan Allen focused on creating
“new classics” to appeal to
millennials. “We are in [the] process of implementing a major
change in our offerings,” said
Farooq Kathwari, Ethan Allen’s chairman, president, and CEO.
“We focus on classics, and our
campaign is developing the next classics. During the next two
or three months, over 600 new
products are being introduced in our network. For example, the
Shelton and Pierce [collections]
focus on good quality, fine details, value and [are] relaxed for
today’s lifestyles.”50 As of
November 3, 2014, Ethan Allen had 10,377 likes on Facebook
for its Ethan Allen KSA (Kingdom
of Saudi Arabia) site51 and 5,404 followers on Twitter52 for its
corporate brand but no separate
feed for its Saudi Arabian stores.
Becara, a Spanish furniture and home accessories company,
strengthened its presence in the
Saudi Arabian market by distributing its products through
Alshaya Home stores, a branch of the
A.M.H. Alshaya Company, one of the largest retail companies
in the Middle East.53 The Alshaya
Group identified Saudi Arabia as its most important market in
the Gulf area. Opening its
showroom in Jeddah in 2011, the group added two more
showrooms in Riyadh and Alkhobar the
following year.54 Alshaya was also the franchise operator for
Pottery Barn and for its parent
company, Williams-Sonoma, which had entered Middle Eastern
markets in 2010.
In terms of price points in relation to its competitors, Aura’s
entry price points were the top

10 percent of IKEA’s prices. Both Ethan Allen and Becara were
more expensive than Aura, while
Zara Home was within the same price range as Aura.
Reception of Aura
Through its social media, B2B, and PR efforts, Aura drew the
attention of several notable
design magazines, such as Harper’s Bazaar Interiors, Elle
Decor, and Martha Stewart Weddings,
as well as Middle East Interiors, Emirates Bride, Ahlan!
Gourmet, Flair, Oasis, and Emirates
Woman. (See Exhibit 6.) By October 2014, the company had
56,337 followers on Instagram,55
513 followers on Twitter,56 and 2,237 “likes” on its Facebook
page.57
Aura’s press releases continued to emphasize the brand’s
middle-income affordability, but
the company’s ties to high-end wedding planners brought it
unexpected coverage. “Because of
our success furnishing these weddings and the attractive look
and feel of our products, we got
coverage in a string of publications,” Abdullah said.58 “It was a
pleasant surprise.”59
Abdullah saw reasons why Aura was attracting high-end
customers: “First, they view our
products as frequently updatable fashion goods. Rather than
buying something expensive, they’d
rather buy Aura for fun and as an accessory. Second, our
products are a different mix to what is
available in the market and very fashion-forward. Finally, Aura
being featured by different
bloggers and wedding planners has contributed to [our]
image.”60

Like any retailer, Aura tracked three main metrics: footfall
(how many people walk into the
store), conversion rate (how many of those people make a
purchase), and ticket price (how much
each customer spends in the store).61
“Our conversion rate is very high among retailers, particularly
furniture retailers,” Abdullah
said.62 “When customers walk into our store, there is a high
probability they will make a
purchase. We have also found that customers are consistently
(and pleasantly) surprised by our
price point. They read about us in outlets like Elle—and may
even be exposed to some of our Au
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AURA 5-115-002
furniture and other products at weddings and other functions—
and come into the store expecting
our prices to be much higher than they are. When they find the
price tag [. . .] they are sometimes
actually quite shocked.” Abdullah believed that Aura’s low
price point was a major driver of the
store’s high conversion rate, but she also noted that the
customers coming through the door were

typically those who could afford to pay more. “We seem to be
drawing a segment of customers
that is above our target segment,” she said.63
Abdullah had seen that once mid-market customers came into
the store and saw Aura’s
attractive price point, they invariably made a purchase. The
question was how to get more of
them into the store.
Expansion
From the start, Abdullah envisioned expanding Aura beyond its
first store. Indeed, she saw
the Riyadh store as setting the standard for a phased opening of
six stores within five years in
Saudi Arabia, with eventual expansion to the rest of the MENA
region.64 Abdullah opened Aura’s
second store in August 2013 in a prime location in the Mall of
Dhahran in the Eastern Province of
Saudi Arabia.
In addition to increasing the number of stores, Abdullah pushed
Aura’s B2B activity beyond
selling to wedding planners, now that Aura had more resources
to expand. She targeted selling to
hotels, complexes, and other event-driven businesses. The
decision to expand the B2B side was
supported by the construction boom that Saudi Arabia was
experiencing in 2014. Saudi Arabia
had US$784 billion worth of construction projects underway,
creating an area of opportunity for
international interior and design companies.
Aura continued its cool-factor social media strategy and hosted
its first blogger dinner in

conjunction with the launch of its Jeddah store. “We spent about
5,000 riyals [US$1,500], and we
increased our followers on Instagram from 41,000 to 49,000
within the span of two days,”
Abdullah said.65 For the launch, Aura partnered with Lace
Events and Design magazine. All
furnishings and tableware used at the dinner were Aura-branded
products. Aura approached two
of the leading Instagrammers in the region to attend the dinner,
which was hosted at the Park
Hyatt Hotel. Other guests were suggested by Aura’s event
partners and approved by Aura based
on their number of social media followers and their fit with the
brand. Guests were encouraged to
take photos and post about the dinner as it was happening. They
were also given vouchers for
store purchases and were asked to post photos of the items they
bought the day of the launch.
Aura partnered with Uber for transportation to and from the
event. The partners and guests of the
event had a total of 1.25 million people following them, giving
the brand significant exposure.
Whom to Target?
While Abdullah wondered how to effectively attract the mid-
market, she worried whether
doing so would alienate her new high-end customers. Would it
be possible to target two market
segments at once? On some level, Abdullah felt that Aura could
attract both high-end and middle-
market customers.66 But as a small company, Aura was
resource-constrained. “For the future, we
need scale: to cover head office costs to get the benefits of
discounts, logistics, and supply chain,”
she said.67 Au

o
la
tio
n
.
5-115-002 AURA
The company’s “good problem” of high-end clientele nagged at
Abdullah. On the one hand,
the high-status perception could be scaring away Aura’s
intended customers. On the other hand,
by abandoning the higher-end customer, Aura would lose sales.
Pursuing both markets would
take significant resources and might cause confusion in the
market. Trying to go mid-market
could lose Aura its high-end allure and media appeal. But if the
company stayed high-end, would
it be able to expand? What about expansion outside Saudi
Arabia?
A
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AURA 5-115-002
Exhibit 1: Saudi Arabia’s Young Population Profile
Source: Al Rajhi Capital, “Saudi Retail Sector,” January 5,
2013, p. 3, http://content.argaam.com/2a7e6433-a546-4a88-
9c74-
930ed924b84c.pdf.
Exhibit 2: Rising Disposable Incomes in Saudi Arabia Lead to
Higher
Consumption

Source: Al Rajhi Capital, “Saudi Retail Sector,” January 5,
2013, p. 3, http://content.argaam.com/2a7e6433-a546-4a88-
9c74-
930ed924b84c.pdf.
A
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Population (in millions)
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5-115-002 AURA
Exhibit 3: Aura’s Storefront and Price Tags with Both English
and Arabic
Lettering

Source: Aura.
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AURA 5-115-002
Exhibit 4: Aura’s Iconic Designs Featured in Flair, June 2013
Source: Aura Complete Press Book, February 2012–August
2014.
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5-115-002 AURA
Exhibit 5: Ethan Allen’s Facebook Pages for the Corporate
Brand (top) and for
the Saudi Arabian Market (bottom)
Source: Ethan Allen’s Facebook page,
https://www.facebook.com/ethanallendesign (accessed
November 3, 2014).

Source: Ethan Allen Saudi Arabia’s Facebook page,
https://www.facebook.com/EthanAllenKSA (accessed November
3, 2014).
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.
AURA 5-115-002
Exhibit 6: Harper’s Bazaar Interiors Features Aura in July 2012
and July 2014

Source: Aura Complete Press Book, February 2012–August
2014. Au
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5-115-002 AURA
Endnotes
1 “Global—Home Furnishing Retail,” MarketLine, May 3, 2012,
http://store.marketline.com/Product/global_home_furnishing_ret
ail?

productid=MLIP0482-0001.
2 Ibid.
3 Ibid.
4 “Saudi Arabia Retail Prospects and Outlook for 2012,” Sacha
Orloff Group, January 2012, p. 3.
5 “Saudi Arabia: 2014/2015 Discovering Business,” UK Trade
& Investment, Committee for International Trade, and
Allurentis Ltd.,
2014, p. 11, http://the-
mea.co.uk/sites/default/files/Saudi%20Arabia%20Discovering%
20Business%202014-15.pdf.
6 “Saudi Arabia Retail Prospects and Outlook for 2012,” p. 2.
7 “Saudi Arabia: 2014/2015 Discovering Business,” p. 11.
8 Ibid., p. 11.
9 “Saudi Arabia Retail Report,” Business Monitor International,
September 3, 2014, http://store.businessmonitor.com/saudi-
arabia-
retail-report.html#sthash.S2gexanA.dpuf.
10 “Saudi Arabia Furniture Market Forecast to 2017,” RNCOS
Business Consultancy Services, July 2013,
http://www.rncos.com/Market-Analysis-Reports/Saudi-Arabia-
Furniture-Market-Forecast-to-2017-IM610.htm.
11 U.S. dollar to Saudi Arabian riyal,
http://coinmill.com/SAR_USD.html#SAR=500.
12 “Booming Construction Activities in Saudi Arabia Fuel
Demand for Furniture Imports,” DecoFair 2014, press release,
May 26,
2014, http://decofair.com/en/press-releases.
13 Sumita Katira, “Saudi on a Retail High,” Arabian Gazette,
July 30, 2011, http://www.arabiangazette.com/saudi-retail-high.
14 Ibid.
15 “GCC Retail Sector,” Alpen Capital, December 9, 2012, p.
43.
17 “GCC Retail Sector,” p. 11.

21 “Saudi Arabia Retail Report.”
23 Ibid., p. 86.
24 Ibid., p. 83.
25 Cindy W. Hodnett, “Sofas’ Appeal Cuts Across
Demographics,” Furniture Today, September 21, 2013,
http://www.furnituretoday.com/article/349332-sofas-appeal-
cuts-across-demographics.
26 Ibid.
27 Ibid.
28 Ibid.
29 “GCC Retail Sector,” p. 19.
30 Ibid., p. 19.
31 Ibid., p. 4.
32 Ibid., p. 4.
33 Noura Abdullah, in interview with the authors, September 5,
2014.
34 Ibid.
35 Mark Faithfull, “A Room with a Hue,” design:retail, October
14, 2011,
http://www.designretailonline.com/displayanddesignideas/
magazine/A-room-with-a-hue-5351.shtml.
36 “Aura Celebrates Janadriyah at Panorama Mall,” Arab News,
February 15, 2012, http://www.arabnews.com/node/406570.
37 Fred Schmalz, “Too Much Good Press?” Kellogg Insight,
September 2, 2014,
http://insight.kellogg.northwestern.edu/article/too-
much-good-press.
2014.
39 Mariam Nihal, “Aura Launches Nationwide Design
Competition,” Saudi Gazette, May 12, 2014,
http://www.saudigazette.com.sa/
index.cfm?method=home.regcon&contentid=20140512204804.

40 “Aura Announces the Winner of the 2014 Design
Competition in Partnership with Saudi Design Week,” press
release, August 12,
2014.
41 Schmalz, “Too Much Good Press?”
42 Noura Abdullah, in communication with the authors,
December 24, 2014. A
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d
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ly
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U
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ity
C
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AURA 5-115-002
43 “Inditex: Global Growth Opportunities,”
http://www.inditex.com/documents/10279/144578/Group+Profil
e+October+2014.pdf/
42f158f8-a236-49f4-8da4-1eafc4fd513f (accessed October 14,
2014).
44 Zara Home,
http://www.fawazalhokairfashion.com/portfolio/zara-home
(accessed October 13, 2014).
45 “Pottery Barn Arrives in the Kingdom of Saudi Arabia,”
April 30, 2011, http://ameinfo.com/blog/company-
news/a/alshaya-
group/pottery-barn-arrives-in-the-kingdom-of-saudi-arabia.
46 Ibid.

47 Pottery Barn . . . Now in Jeddah,” Destination Jeddah,
December 4, 2011,
http://www.destinationjeddah.com/portal/index.php?
option=com_content&view=article&id=1443:pottery-barn-now-
in-jeddah&Itemid=496.
48 “Pottery Barn, Pottery Barn Kids Stores Open Across the
Kingdom,” Arab News, July 4, 2012,
http://www.arabnews.com/pottery-
barn-pottery-barn-kids-stores-open-across-kingdom.
49 “American Born, Globally Bound: Ethan Allen Opens in
Saudi Arabia and Romania,” press release, December 17, 2013,
http://www.marketwatch.com/story/american-born-globally-
boundethan-allen-opens-in-saudi-arabia-and-romania-2013-12-
17.
50 Farooq Kathwari, presentation at TAG 5th Annual Fall
Consumer Conference, September 30, 2014.
51 Ethan Allen Saudi Arabia’s Facebook page,
https://www.facebook.com/EthanAllenKSA (accessed November
3, 2014).
52 Ethan Allen’s Twitter feed, https://twitter.com/Ethan_Allen
(accessed November 3, 2014).
53 “Becara at Alshaya Home in Riyadh and Alkhobar, Saudi
Arabia,” Mueble de España, July 17, 2012,
http://www.muebledeespana.com/becara-at-alshaya-home-in-
riyadh-and-alkhobar-saudi-arabia.
54 Ibid.
55 Aura’s Instagram page, http://instagram.com/auraliving
56 Aura’s Twitter feed, https://twitter.com/auralivingksa
57 Aura’s Facebook page, https://www.facebook.com/auraliving
2014.
60 Ibid.

62 Ibid.
63 Ibid.
64 “Aura: A Modern Home Fashion Brand Opens in Riyadh,
KSA,” Weddings,
http://weddingsmagazine.info/index.php?option=
com_content&view=article&id=156:aura-a-modern-home-
fashion-brand-opens-in-riyadh-ksa&catid=48:bed-a-
linens&Itemid=64
(accessed February 4, 2015).
2014.
67 Ibid.
A
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Strategic Management Assignment 02- Case Analysis Inst.docx

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Strategic Management Assignment 02- Case Analysis Inst.docx