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 - – increasing energy prices, technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, 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 -
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.
Operational resilience
– The operational resilience strategy in the Hotel Wuxi International: Expansion into China Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Spipl Wuxi in the sector have low bargaining power. Hotel Wuxi International: Expansion into China has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Spipl Wuxi to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Spipl Wuxi has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Hotel Wuxi International: Expansion into China HBR case study have helped the firm to develop new products and bring them quickly to 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.
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.
Successful track record of launching new products
– Spipl Wuxi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Spipl Wuxi 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.
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.
Innovation driven organization
– Spipl Wuxi is one of the most innovative firm in sector. Manager in Hotel Wuxi International: Expansion into China Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
Effective Research and Development (R&D)
– Spipl Wuxi has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Hotel Wuxi International: Expansion into China - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 -
High bargaining power of channel partners
– Because of the regulatory requirements, Choon Chiang Leong suggests that, Spipl Wuxi is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Spipl Wuxi has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Spipl Wuxi even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
Low market penetration in new markets
– Outside its home market of Spipl Wuxi, firm in the HBR case study Hotel Wuxi International: Expansion into China needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hotel Wuxi International: Expansion into China HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Spipl Wuxi has relatively successful track record of launching new products.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Spipl Wuxi in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
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.
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.
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.
Leveraging digital technologies
– Spipl Wuxi can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Spipl Wuxi to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Spipl Wuxi to hire the very best people irrespective of their geographical location.
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.
Developing new processes and practices
– Spipl Wuxi can develop new processes and procedures in Organizational Development 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.
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.
Loyalty marketing
– Spipl Wuxi 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Spipl Wuxi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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 -
Increasing wage structure of Spipl Wuxi
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Spipl Wuxi.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
Environmental challenges
– Spipl Wuxi 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. Spipl Wuxi can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Spipl Wuxi can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Hotel Wuxi International: Expansion into China .
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.
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 Spipl Wuxi in the Organizational Development sector and impact the bottomline of the organization.
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 .
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.
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.