Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism
By 2008,Aitken Spence Hotel Holdings PLC (ASHH), a leading Sri Lanka hotel group had established a reputation for operating iconic resorts, in particular, its resort at Kandalama in the central highlands region of the country. Heritance Kandalama, the resort, had evolved after a troubled beginning to gain international recognition for its social, ecological and environmental best practices. In large measure, this was due to the emergence of a set of people management practices that had evolved an organizational culture with values that supported these best practices and enabled the resort to survive, notwithstanding ongoing civil conflict in Sri Lanka. In 2007, ASHH launched a strategic drive into hotel management services in India. A major element of the group's brand equity was its core competency in sustainable and community-sensitive development, much of which it had acquired through the Heritance Kandalama resort experience. A key challenge for ASHH: Can the group's philosophy of sustainable development be successfully implemented in India's hospitality industry? How could ASHH use the Kandalama experience to manage hotels in the culturally and socially diverse towns and cities of India?
Swot Analysis of "Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism" written by Beng Geok Wee, Ivy Buche includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ashh Kandalama facing as an external strategic factors. Some of the topics covered in Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism case study are - Strategic Management Strategies, Growth strategy, International business, Risk management, Supply chain, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism casestudy better are - – wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ashh Kandalama, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ashh Kandalama 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism can be done for the following purposes –
1. Strategic planning using facts provided in Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism case study
2. Improving business portfolio management of Ashh Kandalama
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 Ashh Kandalama
Strengths Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ashh Kandalama in Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism Harvard Business Review case study are -
High brand equity
– Ashh Kandalama has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ashh Kandalama to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Ashh Kandalama 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 Beng Geok Wee, Ivy Buche 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.
Ability to lead change in Strategy & Execution field
– Ashh Kandalama 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 Ashh Kandalama in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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.
Superior customer experience
– The customer experience strategy of Ashh Kandalama in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Ashh Kandalama
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ashh Kandalama does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Ashh Kandalama 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Ashh Kandalama 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.
Highly skilled collaborators
– Ashh Kandalama 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Ashh Kandalama is present in almost all the verticals within the industry. This has provided firm in Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Strategy & Execution industry
– Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism firm has clearly differentiated products in the market place. This has enabled Ashh Kandalama to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ashh Kandalama to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Ashh Kandalama is one of the leading recruiters in the industry. Managers in the Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism are -
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 Ashh Kandalama supply chain. Even after few cautionary changes mentioned in the HBR case study - Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ashh Kandalama vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Ashh Kandalama 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.
Increasing silos among functional specialists
– The organizational structure of Ashh Kandalama is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ashh Kandalama needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ashh Kandalama to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Ashh Kandalama products
– To increase the profitability and margins on the products, Ashh Kandalama needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Ashh Kandalama 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.
Low market penetration in new markets
– Outside its home market of Ashh Kandalama, firm in the HBR case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism HBR case study mentions - Ashh Kandalama 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.
High cash cycle compare to competitors
Ashh Kandalama 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism, it seems that the employees of Ashh Kandalama 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism, in the dynamic environment Ashh Kandalama has struggled to respond to the nimble upstart competition. Ashh Kandalama 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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 Ashh Kandalama has relatively successful track record of launching new products.
Opportunities Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism | 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Ashh Kandalama can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Ashh Kandalama 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.
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. Ashh Kandalama 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. Ashh Kandalama 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.
Buying journey improvements
– Ashh Kandalama can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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.
Creating value in data economy
– The success of analytics program of Ashh Kandalama has opened avenues for new revenue streams for the organization in the industry. This can help Ashh Kandalama to build a more holistic ecosystem as suggested in the Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism case study. Ashh Kandalama can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Ashh Kandalama can develop new processes and procedures in Strategy & Execution 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ashh Kandalama is facing challenges because of the dominance of functional experts in the organization. Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ashh Kandalama 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ashh Kandalama 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, Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism, 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 Ashh Kandalama in the consumer business. Now Ashh Kandalama can target international markets with far fewer capital restrictions requirements than the existing system.
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. Ashh Kandalama can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Ashh Kandalama to increase its market reach. Ashh Kandalama 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.
Manufacturing automation
– Ashh Kandalama 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.
Threats Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism are -
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. Ashh Kandalama needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Ashh Kandalama
– 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 Ashh Kandalama.
Consumer confidence and its impact on Ashh Kandalama 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.
Environmental challenges
– Ashh Kandalama 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. Ashh Kandalama can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Ashh Kandalama 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ashh Kandalama with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Ashh Kandalama is facing in Strategy & Execution 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 Ashh Kandalama in the Strategy & Execution industry. The Strategy & Execution 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.
Stagnating economy with rate increase
– Ashh Kandalama 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.
High dependence on third party suppliers
– Ashh Kandalama 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism, Ashh Kandalama 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 .
Technology acceleration in Forth Industrial Revolution
– Ashh Kandalama has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ashh Kandalama 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.
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 Ashh Kandalama in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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 Ashh Kandalama needs to make to build a sustainable competitive advantage.
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