Hotel Wuxi International: Expansion into China SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hotel Wuxi International: Expansion into China
In December 2006, Sinchong Property Investment Pte Ltd (SPIPL), a Singapore-based property investment firm, signed a letter of intent to take over a partially completed hotel project from the Wuxi City Authority for consideration of a sum of RMB45 million. The original property development called for a 22-storey three-star hotel building with 220 rooms and a four-storey staff building. The concrete structure had already been built, but due to financial difficulties, the Chinese owner had to relinquish the project. Within 60 days prior to the signing of the final agreement to take over the project, SPIPL was keen to ensure that the project was feasible and that the new hotel, its first such project in China, would succeed. During this period, Liang Chee-Sian, the Chief Executive Officer of SPIPL must assess the business challenges of developing and operating the new Hotel Wuxi International.
Swot Analysis of "Hotel Wuxi International: Expansion into China" written by Choon Chiang Leong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Spipl Wuxi facing as an external strategic factors. Some of the topics covered in Hotel Wuxi International: Expansion into China case study are - Strategic Management Strategies, Financial analysis, International business, Market research, Operations management and Organizational Development.
Some of the macro environment factors that can be used to understand the Hotel Wuxi International: Expansion into China casestudy better are - – challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, wage bills are increasing, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of Hotel Wuxi International: Expansion into China
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hotel Wuxi International: Expansion into China case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Spipl Wuxi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Spipl Wuxi 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 Hotel Wuxi International: Expansion into China can be done for the following purposes –
1. Strategic planning using facts provided in Hotel Wuxi International: Expansion into China case study
2. Improving business portfolio management of Spipl Wuxi
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Spipl Wuxi
Strengths Hotel Wuxi International: Expansion into China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Spipl Wuxi in Hotel Wuxi International: Expansion into China Harvard Business Review case study are -
Strong track record of project management
– Spipl Wuxi is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Spipl Wuxi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Spipl Wuxi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Spipl Wuxi is present in almost all the verticals within the industry. This has provided firm in Hotel Wuxi International: Expansion into China 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 Spipl Wuxi 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.
Learning organization
- Spipl Wuxi 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 Spipl Wuxi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hotel Wuxi International: Expansion into China Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Spipl Wuxi is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Choon Chiang Leong can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Spipl Wuxi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Spipl Wuxi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Spipl Wuxi has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Organizational Development field
– Spipl Wuxi 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 Spipl Wuxi in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Organizational Development industry
– Hotel Wuxi International: Expansion into China firm has clearly differentiated products in the market place. This has enabled Spipl Wuxi to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Spipl Wuxi to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Spipl Wuxi is one of the leading recruiters in the industry. Managers in the Hotel Wuxi International: Expansion into China 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
– Spipl Wuxi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hotel Wuxi International: Expansion into China 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 Hotel Wuxi International: Expansion into China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hotel Wuxi International: Expansion into China are -
Products dominated business model
– Even though Spipl Wuxi has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Hotel Wuxi International: Expansion into China should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Spipl Wuxi needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Spipl Wuxi is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Spipl Wuxi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Spipl Wuxi to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Hotel Wuxi International: Expansion into China HBR case study mentions - Spipl Wuxi takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Spipl Wuxi 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.
Lack of clear differentiation of Spipl Wuxi products
– To increase the profitability and margins on the products, Spipl Wuxi needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Spipl Wuxi is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hotel Wuxi International: Expansion into China can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Spipl Wuxi supply chain. Even after few cautionary changes mentioned in the HBR case study - Hotel Wuxi International: Expansion into China, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Spipl Wuxi vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hotel Wuxi International: Expansion into China, it seems that the employees of Spipl Wuxi don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring
– The stress on hiring functional specialists at Spipl Wuxi 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hotel Wuxi International: Expansion into China, in the dynamic environment Spipl Wuxi has struggled to respond to the nimble upstart competition. Spipl Wuxi has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Hotel Wuxi International: Expansion into China | 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 Hotel Wuxi International: Expansion into China 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, Spipl Wuxi can use these opportunities to build new business models that can help the communities that Spipl Wuxi operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Better consumer reach
– The expansion of the 5G network will help Spipl Wuxi to increase its market reach. Spipl Wuxi 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Spipl Wuxi 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, as suggested in case study, Hotel Wuxi International: Expansion into China, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Spipl Wuxi is facing challenges because of the dominance of functional experts in the organization. Hotel Wuxi International: Expansion into China 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Spipl Wuxi can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Spipl Wuxi can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hotel Wuxi International: Expansion into China suggest that firm 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.
Creating value in data economy
– The success of analytics program of Spipl Wuxi has opened avenues for new revenue streams for the organization in the industry. This can help Spipl Wuxi to build a more holistic ecosystem as suggested in the Hotel Wuxi International: Expansion into China case study. Spipl Wuxi can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Spipl Wuxi 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 Organizational Development segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Spipl Wuxi 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. Spipl Wuxi 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Spipl Wuxi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Spipl Wuxi in the consumer business. Now Spipl Wuxi can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Spipl Wuxi can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. 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 Spipl Wuxi 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.
Threats Hotel Wuxi International: Expansion into China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hotel Wuxi International: Expansion into China are -
High dependence on third party suppliers
– Spipl Wuxi high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hotel Wuxi International: Expansion into China, Spipl Wuxi may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Spipl Wuxi with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Spipl Wuxi 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Spipl Wuxi in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Spipl Wuxi has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Spipl Wuxi needs to keep up with the evolution of technology in the Organizational Development 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.
Stagnating economy with rate increase
– Spipl Wuxi 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 field.
Regulatory challenges
– Spipl Wuxi 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 Organizational Development industry regulations.
Shortening product life cycle
– it is one of the major threat that Spipl Wuxi is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Spipl Wuxi 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.
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. Spipl Wuxi needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Spipl Wuxi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Spipl Wuxi business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Hotel Wuxi International: Expansion into China 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 Hotel Wuxi International: Expansion into China 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 Hotel Wuxi International: Expansion into China 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 Hotel Wuxi International: Expansion into China 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 Hotel Wuxi International: Expansion into China 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 Spipl Wuxi needs to make to build a sustainable competitive advantage.