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, increasing energy prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, technology disruption, increasing commodity prices, 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, 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 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.
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.
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.
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.
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.
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.
Learning organization
- Ashh Kandalama 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 Ashh Kandalama is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Ashh Kandalama has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ashh Kandalama 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.
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.
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.
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 bargaining power of channel partners
– Because of the regulatory requirements, Beng Geok Wee, Ivy Buche suggests that, Ashh Kandalama is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
No frontier risks strategy
– After analyzing the HBR case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ashh Kandalama is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ashh Kandalama 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism, is just above the industry average. Ashh Kandalama 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.
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 -
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.
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.
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.
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.
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.
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.
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.
Loyalty marketing
– Ashh Kandalama 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.
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.
Building a culture of innovation
– managers at Ashh Kandalama can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Learning at scale
– Online learning technologies has now opened space for Ashh Kandalama 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.
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.
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.
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 -
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 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.
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.
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.
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.
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.
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.
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.
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 Ashh Kandalama business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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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