To maximize their effectiveness, color cases should be printed in color.Alan Parker has developed an effective organization using organizational fitness profiling and other change methodologies. Parker knows that as Whitbread continues to grow, both internally and through acquisitions, the company will have to change its organization structure and management practices. The case describes how Parker managed the change process and involved a large number of employees in discovering the barriers holding the company back from achieving its strategic vision and in devising ways to overcome them. Includes color exhibits.
Swot Analysis of "Whitbread Hotel Co. (A)" written by Michael Beer, James Weber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Parker Whitbread facing as an external strategic factors. Some of the topics covered in Whitbread Hotel Co. (A) case study are - Strategic Management Strategies, Knowledge management, Mergers & acquisitions, Organizational culture, Strategy execution and Organizational Development.
Some of the macro environment factors that can be used to understand the Whitbread Hotel Co. (A) casestudy better are - – challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, geopolitical disruptions, technology disruption, there is increasing trade war between United States & China,
digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Whitbread Hotel Co. (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Whitbread Hotel Co. (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Parker Whitbread, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Parker Whitbread 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 Whitbread Hotel Co. (A) can be done for the following purposes –
1. Strategic planning using facts provided in Whitbread Hotel Co. (A) case study
2. Improving business portfolio management of Parker Whitbread
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 Parker Whitbread
Strengths Whitbread Hotel Co. (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Parker Whitbread in Whitbread Hotel Co. (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Parker Whitbread 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 Whitbread Hotel Co. (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Parker Whitbread is present in almost all the verticals within the industry. This has provided firm in Whitbread Hotel Co. (A) 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.
Analytics focus
– Parker Whitbread 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 Michael Beer, James Weber 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.
Successful track record of launching new products
– Parker Whitbread has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Parker Whitbread 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.
Cross disciplinary teams
– Horizontal connected teams at the Parker Whitbread 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.
Sustainable margins compare to other players in Organizational Development industry
– Whitbread Hotel Co. (A) firm has clearly differentiated products in the market place. This has enabled Parker Whitbread to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Parker Whitbread to invest into research and development (R&D) and innovation.
High brand equity
– Parker Whitbread has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Parker Whitbread to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Whitbread Hotel Co. (A) 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.
High switching costs
– The high switching costs that Parker Whitbread 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
– Parker Whitbread 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 Parker Whitbread in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Parker Whitbread in the sector have low bargaining power. Whitbread Hotel Co. (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Parker Whitbread to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Parker Whitbread in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Whitbread Hotel Co. (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Whitbread Hotel Co. (A) are -
High operating costs
– Compare to the competitors, firm in the HBR case study Whitbread Hotel Co. (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Parker Whitbread 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Parker Whitbread 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. Parker Whitbread 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 Whitbread Hotel Co. (A) HBR case study mentions - Parker Whitbread 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 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 Parker Whitbread supply chain. Even after few cautionary changes mentioned in the HBR case study - Whitbread Hotel Co. (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Parker Whitbread vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Parker Whitbread products
– To increase the profitability and margins on the products, Parker Whitbread needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Whitbread Hotel Co. (A), is just above the industry average. Parker Whitbread 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.
No frontier risks strategy
– After analyzing the HBR case study Whitbread Hotel Co. (A), 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.
Low market penetration in new markets
– Outside its home market of Parker Whitbread, firm in the HBR case study Whitbread Hotel Co. (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Whitbread Hotel Co. (A) 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 Parker Whitbread has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Whitbread Hotel Co. (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Whitbread Hotel Co. (A) can leverage the sales team experience to cultivate customer relationships as Parker Whitbread is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Parker Whitbread is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Parker Whitbread needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Parker Whitbread to focus more on services rather than just following the product oriented approach.
Opportunities Whitbread Hotel Co. (A) | 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 Whitbread Hotel Co. (A) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Parker Whitbread is facing challenges because of the dominance of functional experts in the organization. Whitbread Hotel Co. (A) 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.
Loyalty marketing
– Parker Whitbread 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.
Building a culture of innovation
– managers at Parker Whitbread 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 Parker Whitbread 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 Parker Whitbread to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Parker Whitbread 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 Whitbread Hotel Co. (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Parker Whitbread to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Parker Whitbread 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.
Developing new processes and practices
– Parker Whitbread 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.
Manufacturing automation
– Parker Whitbread 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.
Creating value in data economy
– The success of analytics program of Parker Whitbread has opened avenues for new revenue streams for the organization in the industry. This can help Parker Whitbread to build a more holistic ecosystem as suggested in the Whitbread Hotel Co. (A) case study. Parker Whitbread can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Parker Whitbread can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Whitbread Hotel Co. (A) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Parker Whitbread can use these opportunities to build new business models that can help the communities that Parker Whitbread operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Parker Whitbread can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Parker Whitbread 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.
Threats Whitbread Hotel Co. (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Whitbread Hotel Co. (A) are -
Stagnating economy with rate increase
– Parker Whitbread 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.
Shortening product life cycle
– it is one of the major threat that Parker Whitbread 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. Parker Whitbread 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Parker Whitbread 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.
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. Parker Whitbread can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Parker Whitbread 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.
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 Parker Whitbread 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 Whitbread Hotel Co. (A), Parker Whitbread 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 Parker Whitbread 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 Parker Whitbread.
Regulatory challenges
– Parker Whitbread 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.
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.
Consumer confidence and its impact on Parker Whitbread 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.
Weighted SWOT Analysis of Whitbread Hotel Co. (A) 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 Whitbread Hotel Co. (A) 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 Whitbread Hotel Co. (A) 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 Whitbread Hotel Co. (A) 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 Whitbread Hotel Co. (A) 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 Parker Whitbread needs to make to build a sustainable competitive advantage.