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 - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing household debt because of falling income levels,
geopolitical disruptions, challanges to central banks by blockchain based private currencies, 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 -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ashh Kandalama digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ashh Kandalama has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Ashh Kandalama in the sector have low bargaining power. Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ashh Kandalama to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Ashh Kandalama 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
– 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.
Training and development
– Ashh Kandalama has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Ashh Kandalama 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.
Innovation driven organization
– Ashh Kandalama is one of the most innovative firm in sector. Manager in Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
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 -
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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 Ashh Kandalama 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Ashh Kandalama 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
– 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.
Interest costs
– Compare to the competition, Ashh Kandalama 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 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.
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.
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.
Products dominated business model
– Even though Ashh Kandalama 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 - Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism should strive to include more intangible value offerings along with its core products and services.
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.
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.
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 -
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.
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.
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.
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.
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.
Using analytics as competitive advantage
– Ashh Kandalama 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ashh Kandalama to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ashh Kandalama can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ashh Kandalama 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 Ashh Kandalama to hire the very best people irrespective of their geographical location.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ashh Kandalama in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ashh Kandalama can use these opportunities to build new business models that can help the communities that Ashh Kandalama operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
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 -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Ashh Kandalama.
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.
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.
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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ashh Kandalama 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism .
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. Ashh Kandalama can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Ashh Kandalama 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.
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.
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.
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.
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.
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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