Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value
When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.Rosewood Hotels & Resorts, a small luxury private hotel management firm running a collection of 12 individually branded hotels and resorts in multiple countries, was wondering how to foster customer retention and loyalty and capture the maximum value from its 115,000 guests. Rosewood had always allowed each hotel to stand as its own individual brand, with the Rosewood name presented as a muted sub-brand, if at all. Now Rosewood's new leadership was contemplating whether the firm should significantly increase the prominence of the corporate identity, making Rosewood a corporate brand. The main challenge that Rosewood's executives face is to assess whether the potential economic benefits from increased guest retention can outweigh the $1,000,000 marketing investment needed to implement the corporate branding strategy. The central focus is a quantitative assignment that asks students to calculate how customer lifetime value would be affected by a shift from individual branding to corporate branding.
Swot Analysis of "Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value" written by Chekitan S. Dev, Laure Mougeot Stroock includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rosewood Branding facing as an external strategic factors. Some of the topics covered in Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value case study are - Strategic Management Strategies, Branding, Customers and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, technology disruption, there is backlash against globalization, wage bills are increasing,
geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rosewood Branding, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rosewood Branding 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 Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value can be done for the following purposes –
1. Strategic planning using facts provided in Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value case study
2. Improving business portfolio management of Rosewood Branding
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 Rosewood Branding
Strengths Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rosewood Branding in Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value Harvard Business Review case study are -
Highly skilled collaborators
– Rosewood Branding 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 Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Rosewood Branding 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 Rosewood Branding is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Rosewood Branding in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Rosewood Branding is one of the leading recruiters in the industry. Managers in the Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Rosewood Branding is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Sales & Marketing industry
– Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value firm has clearly differentiated products in the market place. This has enabled Rosewood Branding to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Rosewood Branding to invest into research and development (R&D) and innovation.
Training and development
– Rosewood Branding has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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.
Innovation driven organization
– Rosewood Branding is one of the most innovative firm in sector. Manager in Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Rosewood Branding 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Rosewood Branding digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rosewood Branding 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.
High brand equity
– Rosewood Branding has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rosewood Branding to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Rosewood Branding
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rosewood Branding does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value are -
High operating costs
– Compare to the competitors, firm in the HBR case study Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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 Rosewood Branding 's lucrative customers.
Interest costs
– Compare to the competition, Rosewood Branding 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.
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 Rosewood Branding supply chain. Even after few cautionary changes mentioned in the HBR case study - Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rosewood Branding vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value, is just above the industry average. Rosewood Branding 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.
Capital Spending Reduction
– Even during the low interest decade, Rosewood Branding 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.
Need for greater diversity
– Rosewood Branding 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.
Lack of clear differentiation of Rosewood Branding products
– To increase the profitability and margins on the products, Rosewood Branding needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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 Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value can leverage the sales team experience to cultivate customer relationships as Rosewood Branding is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Chekitan S. Dev, Laure Mougeot Stroock suggests that, Rosewood Branding 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.
Products dominated business model
– Even though Rosewood Branding 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 - Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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 Rosewood Branding has relatively successful track record of launching new products.
Opportunities Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value | 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 Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value are -
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 Rosewood Branding in the consumer business. Now Rosewood Branding can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Rosewood Branding 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 Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rosewood Branding to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rosewood Branding can use these opportunities to build new business models that can help the communities that Rosewood Branding operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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 Rosewood Branding 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.
Leveraging digital technologies
– Rosewood Branding 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rosewood Branding 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 Rosewood Branding to hire the very best people irrespective of their geographical location.
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. Rosewood Branding can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rosewood Branding 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.
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. Rosewood Branding can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Rosewood Branding can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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.
Loyalty marketing
– Rosewood Branding 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rosewood Branding is facing challenges because of the dominance of functional experts in the organization. Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rosewood Branding can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value are -
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 Rosewood Branding in the Sales & Marketing sector and impact the bottomline of the organization.
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. Rosewood Branding 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Rosewood Branding needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rosewood Branding with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Rosewood Branding 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.
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.
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 Rosewood Branding business can come under increasing regulations regarding data privacy, data security, etc.
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. Rosewood Branding can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value, Rosewood Branding may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
High dependence on third party suppliers
– Rosewood Branding 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.
Stagnating economy with rate increase
– Rosewood Branding 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rosewood Branding 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.
Increasing wage structure of Rosewood Branding
– 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 Rosewood Branding.
Weighted SWOT Analysis of Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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 Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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 Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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 Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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 Rosewood Hotels and Resorts: Branding to Increase Customer Profitability and Lifetime Value 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 Rosewood Branding needs to make to build a sustainable competitive advantage.
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