Taj Hotels, Resorts and Palaces SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Taj Hotels, Resorts and Palaces
To maximize their effectiveness, color cases should be printed in color.The Taj Hotels, Palaces, and Resorts introduced a new brand architecture to counter lack of differentiation and confused positioning of its mixed bag of brands. After launching an economy and an upscale brand, it dithered over the launch of its upper upscale and luxury brands. The case illustrates the marketing and organizational challenges of a hybrid brand extension strategy that lies in between a 'house of brands' and a 'branded house'.
Swot Analysis of "Taj Hotels, Resorts and Palaces" written by Rohit Deshpande, Mona Sinha includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Palaces Taj facing as an external strategic factors. Some of the topics covered in Taj Hotels, Resorts and Palaces case study are - Strategic Management Strategies, Market research and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Taj Hotels, Resorts and Palaces casestudy better are - – increasing commodity prices, wage bills are increasing, challanges to central banks by blockchain based private currencies, there is backlash against globalization, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Taj Hotels, Resorts and Palaces
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Taj Hotels, Resorts and Palaces case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Palaces Taj, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Palaces Taj 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 Taj Hotels, Resorts and Palaces can be done for the following purposes –
1. Strategic planning using facts provided in Taj Hotels, Resorts and Palaces case study
2. Improving business portfolio management of Palaces Taj
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 Palaces Taj
Strengths Taj Hotels, Resorts and Palaces | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Palaces Taj in Taj Hotels, Resorts and Palaces Harvard Business Review case study are -
Successful track record of launching new products
– Palaces Taj has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Palaces Taj 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.
Operational resilience
– The operational resilience strategy in the Taj Hotels, Resorts and Palaces 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 Palaces Taj 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.
Superior customer experience
– The customer experience strategy of Palaces Taj in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Sales & Marketing field
– Palaces Taj 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 Palaces Taj in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Palaces Taj has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Palaces Taj to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Palaces Taj has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Taj Hotels, Resorts and Palaces Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Palaces Taj 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 Palaces Taj is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Taj Hotels, Resorts and Palaces Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Palaces Taj is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Palaces Taj 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Palaces Taj digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Palaces Taj 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 Palaces Taj in the sector have low bargaining power. Taj Hotels, Resorts and Palaces has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Palaces Taj to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Taj Hotels, Resorts and Palaces | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Taj Hotels, Resorts and Palaces are -
Workers concerns about automation
– As automation is fast increasing in the segment, Palaces Taj 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.
Skills based hiring
– The stress on hiring functional specialists at Palaces Taj 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Taj Hotels, Resorts and Palaces 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 Palaces Taj 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Palaces Taj supply chain. Even after few cautionary changes mentioned in the HBR case study - Taj Hotels, Resorts and Palaces, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Palaces Taj vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Palaces Taj has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Taj Hotels, Resorts and Palaces, in the dynamic environment Palaces Taj has struggled to respond to the nimble upstart competition. Palaces Taj has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Taj Hotels, Resorts and Palaces, it seems that the employees of Palaces Taj 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Taj Hotels, Resorts and Palaces 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 Palaces Taj has relatively successful track record of launching new products.
Lack of clear differentiation of Palaces Taj products
– To increase the profitability and margins on the products, Palaces Taj needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Palaces Taj 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 - Taj Hotels, Resorts and Palaces should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Palaces Taj 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. Palaces Taj 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.
Opportunities Taj Hotels, Resorts and Palaces | 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 Taj Hotels, Resorts and Palaces are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Palaces Taj 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, Palaces Taj 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, Taj Hotels, Resorts and Palaces, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Palaces Taj in the consumer business. Now Palaces Taj can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Palaces Taj 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 Palaces Taj to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Palaces Taj can use these opportunities to build new business models that can help the communities that Palaces Taj operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Developing new processes and practices
– Palaces Taj 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.
Creating value in data economy
– The success of analytics program of Palaces Taj has opened avenues for new revenue streams for the organization in the industry. This can help Palaces Taj to build a more holistic ecosystem as suggested in the Taj Hotels, Resorts and Palaces case study. Palaces Taj can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Palaces Taj 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, Palaces Taj is facing challenges because of the dominance of functional experts in the organization. Taj Hotels, Resorts and Palaces 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Palaces Taj 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. Palaces Taj 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.
Building a culture of innovation
– managers at Palaces Taj 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 Sales & Marketing segment.
Using analytics as competitive advantage
– Palaces Taj 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 Taj Hotels, Resorts and Palaces - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Palaces Taj to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Palaces Taj can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Taj Hotels, Resorts and Palaces 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.
Threats Taj Hotels, Resorts and Palaces External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Taj Hotels, Resorts and Palaces are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Palaces Taj 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 Taj Hotels, Resorts and Palaces .
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 Palaces Taj business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Palaces Taj 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. Palaces Taj can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Palaces Taj 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
– Palaces Taj 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.
Regulatory challenges
– Palaces Taj 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.
Stagnating economy with rate increase
– Palaces Taj 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.
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 Palaces Taj.
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.
Technology acceleration in Forth Industrial Revolution
– Palaces Taj has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Palaces Taj 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.
Shortening product life cycle
– it is one of the major threat that Palaces Taj is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Palaces Taj in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology 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 Taj Hotels, Resorts and Palaces 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 Taj Hotels, Resorts and Palaces 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 Taj Hotels, Resorts and Palaces 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 Taj Hotels, Resorts and Palaces 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 Taj Hotels, Resorts and Palaces 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 Palaces Taj needs to make to build a sustainable competitive advantage.
