Case Study Description of Barcelo Hotels and Resorts (A)
Barcelo Hotels and Resorts must decide whether to allow its many hotels to continue to undertake separate promotional campaigns or to run, for the first time, a broad corporate-level promotion. Complicating the decision is the fact that the many hotels in its portfolio vary greatly in their character, clientele, positioning, and locations.
Swot Analysis of "Barcelo Hotels and Resorts (A)" written by John T. Gourville, Marco Bertini includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hotels Barcelo facing as an external strategic factors. Some of the topics covered in Barcelo Hotels and Resorts (A) case study are - Strategic Management Strategies, Pricing and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Barcelo Hotels and Resorts (A) casestudy better are - – technology disruption, central banks are concerned over increasing inflation, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices,
challanges to central banks by blockchain based private currencies, geopolitical disruptions, etc
Introduction to SWOT Analysis of Barcelo Hotels and Resorts (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Barcelo Hotels and Resorts (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hotels Barcelo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hotels Barcelo 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 Barcelo Hotels and Resorts (A) can be done for the following purposes –
1. Strategic planning using facts provided in Barcelo Hotels and Resorts (A) case study
2. Improving business portfolio management of Hotels Barcelo
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 Hotels Barcelo
Strengths Barcelo Hotels and Resorts (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hotels Barcelo in Barcelo Hotels and Resorts (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Hotels Barcelo 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 Barcelo Hotels and Resorts (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.
Successful track record of launching new products
– Hotels Barcelo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hotels Barcelo 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 Hotels Barcelo 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.
Strong track record of project management
– Hotels Barcelo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Hotels Barcelo 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 John T. Gourville, Marco Bertini 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.
Operational resilience
– The operational resilience strategy in the Barcelo Hotels and Resorts (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.
Training and development
– Hotels Barcelo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Barcelo Hotels and Resorts (A) 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.
High brand equity
– Hotels Barcelo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hotels Barcelo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Hotels Barcelo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hotels Barcelo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Hotels Barcelo 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 Hotels Barcelo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Barcelo Hotels and Resorts (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Hotels Barcelo 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 Barcelo Hotels and Resorts (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Sales & Marketing field
– Hotels Barcelo 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 Hotels Barcelo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Barcelo Hotels and Resorts (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Barcelo Hotels and Resorts (A) are -
Need for greater diversity
– Hotels Barcelo 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.
Low market penetration in new markets
– Outside its home market of Hotels Barcelo, firm in the HBR case study Barcelo Hotels and Resorts (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Hotels Barcelo is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Hotels Barcelo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hotels Barcelo to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Barcelo Hotels and Resorts (A), is just above the industry average. Hotels Barcelo 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, Hotels Barcelo 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.
High cash cycle compare to competitors
Hotels Barcelo has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow decision making process
– As mentioned earlier in the report, Hotels Barcelo 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. Hotels Barcelo 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.
Skills based hiring
– The stress on hiring functional specialists at Hotels Barcelo 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Barcelo Hotels and Resorts (A), in the dynamic environment Hotels Barcelo has struggled to respond to the nimble upstart competition. Hotels Barcelo 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 Barcelo Hotels and Resorts (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 Hotels Barcelo has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hotels Barcelo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Barcelo Hotels and Resorts (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Barcelo Hotels and Resorts (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 Barcelo Hotels and Resorts (A) are -
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. Hotels Barcelo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Hotels Barcelo has opened avenues for new revenue streams for the organization in the industry. This can help Hotels Barcelo to build a more holistic ecosystem as suggested in the Barcelo Hotels and Resorts (A) case study. Hotels Barcelo can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Hotels Barcelo to increase its market reach. Hotels Barcelo will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hotels Barcelo 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.
Manufacturing automation
– Hotels Barcelo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hotels Barcelo can use these opportunities to build new business models that can help the communities that Hotels Barcelo operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Leveraging digital technologies
– Hotels Barcelo 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.
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 Hotels Barcelo 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hotels Barcelo 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, Barcelo Hotels and Resorts (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Hotels Barcelo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Barcelo Hotels and Resorts (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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hotels Barcelo 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, Hotels Barcelo is facing challenges because of the dominance of functional experts in the organization. Barcelo Hotels and Resorts (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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hotels Barcelo 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 Hotels Barcelo to hire the very best people irrespective of their geographical location.
Threats Barcelo Hotels and Resorts (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Barcelo Hotels and Resorts (A) are -
High dependence on third party suppliers
– Hotels Barcelo 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.
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 Hotels Barcelo.
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 Hotels Barcelo business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Hotels Barcelo 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. Hotels Barcelo can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Shortening product life cycle
– it is one of the major threat that Hotels Barcelo 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
– Hotels Barcelo 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hotels Barcelo 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 Barcelo Hotels and Resorts (A) .
Regulatory challenges
– Hotels Barcelo 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.
Consumer confidence and its impact on Hotels Barcelo 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Barcelo Hotels and Resorts (A), Hotels Barcelo 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 .
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. Hotels Barcelo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Hotels Barcelo
– 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 Hotels Barcelo.
Weighted SWOT Analysis of Barcelo Hotels and Resorts (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 Barcelo Hotels and Resorts (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 Barcelo Hotels and Resorts (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 Barcelo Hotels and Resorts (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 Barcelo Hotels and Resorts (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 Hotels Barcelo needs to make to build a sustainable competitive advantage.
