Case Study Description of Morgan's Rock Hacienda & Ecolodge
An upscale ecolodge in southern Nicaragua hopes to achieve a 53% occupancy rate within three years of opening and has hired a management company to prepare a marketing strategy. Despite its proximity to Costa Rica and its focus on providing a unique luxury vacation retreat for one of the fastest growing segments in the travel industry--the ecotourist--the hotel faces numerous hurdles. The greatest challenge is to overcome Nicaragua's negative reputation, based on its recent history of political and social unrest, still fresh in the minds of tourists. The hotel must also operate within the country's rural infrastructure, characterized by interruptions in the power supply, poorly maintained roads, and below-standard sanitation. Additionally, Nicaragua does not have a pool of skilled employees to work in the high-end service industry. Preparation of the marketing strategy addresses the effects of these factors on the hotel's market positioning and market penetration rate.
Authors :: Shuo Wang, Judith A. Siguaw, Penny Simpson
Swot Analysis of "Morgan's Rock Hacienda & Ecolodge" written by Shuo Wang, Judith A. Siguaw, Penny Simpson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ecolodge Nicaragua facing as an external strategic factors. Some of the topics covered in Morgan's Rock Hacienda & Ecolodge case study are - Strategic Management Strategies, Market research, Public relations and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Morgan's Rock Hacienda & Ecolodge casestudy better are - – increasing transportation and logistics costs, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies,
wage bills are increasing, technology disruption, etc
Introduction to SWOT Analysis of Morgan's Rock Hacienda & Ecolodge
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Morgan's Rock Hacienda & Ecolodge case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ecolodge Nicaragua, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ecolodge Nicaragua 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 Morgan's Rock Hacienda & Ecolodge can be done for the following purposes –
1. Strategic planning using facts provided in Morgan's Rock Hacienda & Ecolodge case study
2. Improving business portfolio management of Ecolodge Nicaragua
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ecolodge Nicaragua
Strengths Morgan's Rock Hacienda & Ecolodge | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ecolodge Nicaragua in Morgan's Rock Hacienda & Ecolodge Harvard Business Review case study are -
Successful track record of launching new products
– Ecolodge Nicaragua has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ecolodge Nicaragua 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Morgan's Rock Hacienda & Ecolodge firm has clearly differentiated products in the market place. This has enabled Ecolodge Nicaragua to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Ecolodge Nicaragua to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Morgan's Rock Hacienda & Ecolodge 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 brand equity
– Ecolodge Nicaragua has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ecolodge Nicaragua to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Ecolodge Nicaragua digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ecolodge Nicaragua 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.
Analytics focus
– Ecolodge Nicaragua 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 Shuo Wang, Judith A. Siguaw, Penny Simpson 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.
Strong track record of project management
– Ecolodge Nicaragua is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Ecolodge Nicaragua is present in almost all the verticals within the industry. This has provided firm in Morgan's Rock Hacienda & Ecolodge 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.
Learning organization
- Ecolodge Nicaragua 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 Ecolodge Nicaragua is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Morgan's Rock Hacienda & Ecolodge Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Ecolodge Nicaragua 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 Morgan's Rock Hacienda & Ecolodge - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Ecolodge Nicaragua 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.
High switching costs
– The high switching costs that Ecolodge Nicaragua 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.
Weaknesses Morgan's Rock Hacienda & Ecolodge | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Morgan's Rock Hacienda & Ecolodge are -
High bargaining power of channel partners
– Because of the regulatory requirements, Shuo Wang, Judith A. Siguaw, Penny Simpson suggests that, Ecolodge Nicaragua 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Morgan's Rock Hacienda & Ecolodge, it seems that the employees of Ecolodge Nicaragua 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.
Increasing silos among functional specialists
– The organizational structure of Ecolodge Nicaragua is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Ecolodge Nicaragua needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ecolodge Nicaragua to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Morgan's Rock Hacienda & Ecolodge 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 Ecolodge Nicaragua 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Morgan's Rock Hacienda & Ecolodge, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Morgan's Rock Hacienda & Ecolodge, in the dynamic environment Ecolodge Nicaragua has struggled to respond to the nimble upstart competition. Ecolodge Nicaragua has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Morgan's Rock Hacienda & Ecolodge 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 Ecolodge Nicaragua has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Morgan's Rock Hacienda & Ecolodge 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 Morgan's Rock Hacienda & Ecolodge can leverage the sales team experience to cultivate customer relationships as Ecolodge Nicaragua is planning to shift buying processes online.
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 Ecolodge Nicaragua supply chain. Even after few cautionary changes mentioned in the HBR case study - Morgan's Rock Hacienda & Ecolodge, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ecolodge Nicaragua vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ecolodge Nicaragua is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Morgan's Rock Hacienda & Ecolodge can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Ecolodge Nicaragua 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.
Opportunities Morgan's Rock Hacienda & Ecolodge | 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 Morgan's Rock Hacienda & Ecolodge are -
Manufacturing automation
– Ecolodge Nicaragua can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Using analytics as competitive advantage
– Ecolodge Nicaragua 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 Morgan's Rock Hacienda & Ecolodge - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ecolodge Nicaragua 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, Ecolodge Nicaragua 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ecolodge Nicaragua is facing challenges because of the dominance of functional experts in the organization. Morgan's Rock Hacienda & Ecolodge 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ecolodge Nicaragua 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 Ecolodge Nicaragua to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Ecolodge Nicaragua can develop new processes and procedures in Sales & Marketing 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ecolodge Nicaragua in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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 Ecolodge Nicaragua in the consumer business. Now Ecolodge Nicaragua can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ecolodge Nicaragua 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, Morgan's Rock Hacienda & Ecolodge, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ecolodge Nicaragua can use these opportunities to build new business models that can help the communities that Ecolodge Nicaragua operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Loyalty marketing
– Ecolodge Nicaragua 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. Ecolodge Nicaragua can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ecolodge Nicaragua to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Morgan's Rock Hacienda & Ecolodge External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Morgan's Rock Hacienda & Ecolodge are -
Increasing wage structure of Ecolodge Nicaragua
– 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 Ecolodge Nicaragua.
Technology acceleration in Forth Industrial Revolution
– Ecolodge Nicaragua has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Ecolodge Nicaragua needs to keep up with the evolution of technology in the Sales & Marketing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ecolodge Nicaragua 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 Morgan's Rock Hacienda & Ecolodge .
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 Ecolodge Nicaragua business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Ecolodge Nicaragua is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Ecolodge Nicaragua 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ecolodge Nicaragua with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Ecolodge Nicaragua 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. Ecolodge Nicaragua can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Ecolodge Nicaragua 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 Sales & Marketing industry regulations.
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 Ecolodge Nicaragua.
High dependence on third party suppliers
– Ecolodge Nicaragua 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.
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.
Weighted SWOT Analysis of Morgan's Rock Hacienda & Ecolodge 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 Morgan's Rock Hacienda & Ecolodge 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 Morgan's Rock Hacienda & Ecolodge 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 Morgan's Rock Hacienda & Ecolodge 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 Morgan's Rock Hacienda & Ecolodge 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 Ecolodge Nicaragua needs to make to build a sustainable competitive advantage.
