Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka
In 1992, when Aitken Spence Hotel Holdings PLC (ASHH) of Sri Lanka announced its intentions to build a tourist resort in a region with several ancient archeological sites and rich in natural biodiversity, the local communities as well as environmentalists were apprehensive about the negative impacts of the development on the region. In response, the resort developers embarked on sustained and ongoing environmental, social and community development programmes to preserve the physical environment, benefiting the surrounding communities and involving local residents in the operations of the resort. The resort, Heritance Kandalama, went on to receive many international awards for environment management and social and community development. It was the first Asian hotel to receive Green Globe 21 certification in 1999. The resort also raised the profile of its parent company, ASHH, as one of the pioneers of sustainable tourism in Asia. This case examines (a) the environment management and social and community development strategies/programmes at Heritance Kandalama, (b) the emergence of an organisational culture anchored on sustainable development, and (c) HR practices that supported the implementation of sustainable tourism practices.
Swot Analysis of "Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka" written by Beng Geok Wee, Ivy Buche includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Resort Heritance facing as an external strategic factors. Some of the topics covered in Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka case study are - Strategic Management Strategies, Organizational culture, Supply chain, Sustainability and Organizational Development.
Some of the macro environment factors that can be used to understand the Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka casestudy better are - – cloud computing is disrupting traditional business models, increasing energy prices, increasing government debt because of Covid-19 spendings, there is backlash against globalization, geopolitical disruptions, central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
increasing transportation and logistics costs, wage bills are increasing, etc
Introduction to SWOT Analysis of Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Resort Heritance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Resort Heritance 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 Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka can be done for the following purposes –
1. Strategic planning using facts provided in Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka case study
2. Improving business portfolio management of Resort Heritance
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 Resort Heritance
Strengths Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Resort Heritance in Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka Harvard Business Review case study are -
Sustainable margins compare to other players in Organizational Development industry
– Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka firm has clearly differentiated products in the market place. This has enabled Resort Heritance to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Resort Heritance to invest into research and development (R&D) and innovation.
Analytics focus
– Resort Heritance 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 Beng Geok Wee, Ivy Buche 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.
Cross disciplinary teams
– Horizontal connected teams at the Resort Heritance 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.
Ability to lead change in Organizational Development field
– Resort Heritance 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 Resort Heritance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Resort Heritance is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Resort Heritance digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Resort Heritance has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Resort Heritance in the sector have low bargaining power. Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Resort Heritance to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Resort Heritance 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 Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Resort Heritance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Resort Heritance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Resort Heritance 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 Resort Heritance is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Resort Heritance in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Resort Heritance has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Resort Heritance 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.
Weaknesses Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka are -
Capital Spending Reduction
– Even during the low interest decade, Resort Heritance has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Products dominated business model
– Even though Resort Heritance 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 - Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka, it seems that the employees of Resort Heritance 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.
Low market penetration in new markets
– Outside its home market of Resort Heritance, firm in the HBR case study Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Resort Heritance has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka, is just above the industry average. Resort Heritance needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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 Resort Heritance supply chain. Even after few cautionary changes mentioned in the HBR case study - Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Resort Heritance vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Resort Heritance 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.
Slow decision making process
– As mentioned earlier in the report, Resort Heritance 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. Resort Heritance 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.
Lack of clear differentiation of Resort Heritance products
– To increase the profitability and margins on the products, Resort Heritance needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka | 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 Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka are -
Developing new processes and practices
– Resort Heritance 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.
Better consumer reach
– The expansion of the 5G network will help Resort Heritance to increase its market reach. Resort Heritance 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Resort Heritance is facing challenges because of the dominance of functional experts in the organization. Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka 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.
Buying journey improvements
– Resort Heritance can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka 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.
Building a culture of innovation
– managers at Resort Heritance 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Resort Heritance can use these opportunities to build new business models that can help the communities that Resort Heritance operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Creating value in data economy
– The success of analytics program of Resort Heritance has opened avenues for new revenue streams for the organization in the industry. This can help Resort Heritance to build a more holistic ecosystem as suggested in the Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka case study. Resort Heritance can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Resort Heritance 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.
Loyalty marketing
– Resort Heritance 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Resort Heritance can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Resort Heritance can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Resort Heritance 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, Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Resort Heritance has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Resort Heritance to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka are -
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.
Regulatory challenges
– Resort Heritance 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 Resort Heritance 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. Resort Heritance 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Resort Heritance 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 Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Resort Heritance with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Resort Heritance.
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. Resort Heritance can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Resort Heritance in the Organizational Development sector and impact the bottomline of the organization.
Consumer confidence and its impact on Resort Heritance 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.
Technology acceleration in Forth Industrial Revolution
– Resort Heritance has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Resort Heritance 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.
High dependence on third party suppliers
– Resort Heritance 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 Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka, Resort Heritance 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 .
Weighted SWOT Analysis of Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka 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 Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka 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 Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka 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 Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka 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 Sustainable Tourism: Heritance Kandalama Resort of Sri Lanka 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 Resort Heritance needs to make to build a sustainable competitive advantage.
