Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base
This case describes Banyan Tree Resorts & Hotel's rapid growth starting from a single resort converted from a disused tin mine in Phuket, Thailand, to become an international resort operator and one of Asia's top 20 brands. It explores the realisation of an innovative lifestyle concept, the subsequent challenges involved in replicating its original success in different parts of the world, the company's marketing strategy, and the development of service operations capabilities to back the brand, as well as the challenges faced in extending the brand into new businesses including branded goods and a travel portal.
Authors :: Peter J. Williamson, Arnoud De Meyer, Hwee Chua Chei
Swot Analysis of "Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base" written by Peter J. Williamson, Arnoud De Meyer, Hwee Chua Chei includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Banyan Tree facing as an external strategic factors. Some of the topics covered in Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base case study are - Strategic Management Strategies, Project management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base casestudy better are - – geopolitical disruptions, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, wage bills are increasing, technology disruption,
competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Banyan Tree, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Banyan Tree 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 Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base can be done for the following purposes –
1. Strategic planning using facts provided in Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base case study
2. Improving business portfolio management of Banyan Tree
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Banyan Tree
Strengths Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Banyan Tree in Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base Harvard Business Review case study are -
Highly skilled collaborators
– Banyan Tree 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 Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Banyan Tree in the sector have low bargaining power. Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Banyan Tree to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Banyan Tree 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 Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Banyan Tree in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Banyan Tree digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Banyan Tree 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.
Training and development
– Banyan Tree has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base firm has clearly differentiated products in the market place. This has enabled Banyan Tree to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Banyan Tree to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Banyan Tree is one of the leading recruiters in the industry. Managers in the Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Banyan Tree 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 Banyan Tree is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Banyan Tree has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Banyan Tree to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base 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.
Strong track record of project management
– Banyan Tree is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base are -
Capital Spending Reduction
– Even during the low interest decade, Banyan Tree 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 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 Banyan Tree supply chain. Even after few cautionary changes mentioned in the HBR case study - Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Banyan Tree vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Banyan Tree 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Banyan Tree 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 Banyan Tree 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.
Aligning sales with marketing
– It come across in the case study Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base 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 Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base can leverage the sales team experience to cultivate customer relationships as Banyan Tree is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Banyan Tree, firm in the HBR case study Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Banyan Tree 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.
Slow to strategic competitive environment developments
– As Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base HBR case study mentions - Banyan Tree takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base, is just above the industry average. Banyan Tree 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base, in the dynamic environment Banyan Tree has struggled to respond to the nimble upstart competition. Banyan Tree has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base | 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 Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base are -
Buying journey improvements
– Banyan Tree can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Banyan Tree 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, Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Banyan Tree can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Banyan Tree has opened avenues for new revenue streams for the organization in the industry. This can help Banyan Tree to build a more holistic ecosystem as suggested in the Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base case study. Banyan Tree can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Banyan Tree 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.
Manufacturing automation
– Banyan Tree can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Learning at scale
– Online learning technologies has now opened space for Banyan Tree to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Better consumer reach
– The expansion of the 5G network will help Banyan Tree to increase its market reach. Banyan Tree 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Banyan Tree 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 Banyan Tree to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Banyan Tree can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Banyan Tree 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Banyan Tree 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. Banyan Tree 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.
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 Banyan Tree in the consumer business. Now Banyan Tree can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base are -
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. Banyan Tree 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.
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 Banyan Tree in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Banyan Tree has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Banyan Tree needs to keep up with the evolution of technology in the Strategy & Execution 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 wage structure of Banyan Tree
– 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 Banyan Tree.
Shortening product life cycle
– it is one of the major threat that Banyan Tree is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Banyan Tree can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Banyan Tree.
Stagnating economy with rate increase
– Banyan Tree 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.
Regulatory challenges
– Banyan Tree 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 Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base, Banyan Tree may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
High dependence on third party suppliers
– Banyan Tree 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Banyan Tree with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Banyan Tree demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base 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 Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base 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 Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base 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 Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base 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 Banyan Tree Resorts & Hotels: Building an International Brand From an Asian Base 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 Banyan Tree needs to make to build a sustainable competitive advantage.