Hotel Latvia: Sell Out, Hang Out or Partner? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hotel Latvia: Sell Out, Hang Out or Partner?
Three friends have followed their entrepreneurial dream to build a five-star hotel in Liepaja, a seaside city in Latvia. After a few early profitable years, the hotel is struggling, due to the massive downturn in the Latvian economy as a result of the European Union financial crisis and slow recovery. The hotel has declined from generating an annual profit to now making a loss or barely breaking even. On several occasions, the co-owners have considered selling up while they can still break even. With the European Union showing signs of recovery, business confidence is returning and the future is starting to look up. The co-owners must decide whether to put all their struggles behind them, retain the ownership of the hotel and look forward to the potential days of profit that lie ahead. Alternatively, they can move in an almost opposite direction, by selling up and moving on. What strategic direction will produce a successful outcome? Stephen Grainger is affiliated with Edith Cowan University.
Swot Analysis of "Hotel Latvia: Sell Out, Hang Out or Partner?" written by Stephen Grainger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hotel Latvia facing as an external strategic factors. Some of the topics covered in Hotel Latvia: Sell Out, Hang Out or Partner? case study are - Strategic Management Strategies, Operations management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Hotel Latvia: Sell Out, Hang Out or Partner? casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google,
customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, etc
Introduction to SWOT Analysis of Hotel Latvia: Sell Out, Hang Out or Partner?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hotel Latvia: Sell Out, Hang Out or Partner? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hotel Latvia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hotel Latvia 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 Hotel Latvia: Sell Out, Hang Out or Partner? can be done for the following purposes –
1. Strategic planning using facts provided in Hotel Latvia: Sell Out, Hang Out or Partner? case study
2. Improving business portfolio management of Hotel Latvia
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 Hotel Latvia
Strengths Hotel Latvia: Sell Out, Hang Out or Partner? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hotel Latvia in Hotel Latvia: Sell Out, Hang Out or Partner? Harvard Business Review case study are -
High switching costs
– The high switching costs that Hotel Latvia 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
– Hotel Latvia 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 Hotel Latvia: Sell Out, Hang Out or Partner? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Hotel Latvia 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 Stephen Grainger 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.
Cross disciplinary teams
– Horizontal connected teams at the Hotel Latvia 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 Hotel Latvia
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hotel Latvia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Hotel Latvia 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 Hotel Latvia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hotel Latvia: Sell Out, Hang Out or Partner? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Hotel Latvia in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Hotel Latvia is one of the leading recruiters in the industry. Managers in the Hotel Latvia: Sell Out, Hang Out or Partner? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– Hotel Latvia: Sell Out, Hang Out or Partner? firm has clearly differentiated products in the market place. This has enabled Hotel Latvia to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Hotel Latvia to invest into research and development (R&D) and innovation.
Strong track record of project management
– Hotel Latvia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Hotel Latvia has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hotel Latvia: Sell Out, Hang Out or Partner? 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hotel Latvia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hotel Latvia 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.
Weaknesses Hotel Latvia: Sell Out, Hang Out or Partner? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hotel Latvia: Sell Out, Hang Out or Partner? are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hotel Latvia: Sell Out, Hang Out or Partner?, in the dynamic environment Hotel Latvia has struggled to respond to the nimble upstart competition. Hotel Latvia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Hotel Latvia: Sell Out, Hang Out or Partner? 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 Hotel Latvia: Sell Out, Hang Out or Partner? can leverage the sales team experience to cultivate customer relationships as Hotel Latvia is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Hotel Latvia: Sell Out, Hang Out or Partner?, 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.
Need for greater diversity
– Hotel Latvia 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hotel Latvia: Sell Out, Hang Out or Partner? 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 Hotel Latvia has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hotel Latvia is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hotel Latvia: Sell Out, Hang Out or Partner? 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 Hotel Latvia: Sell Out, Hang Out or Partner? HBR case study mentions - Hotel Latvia 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
Hotel Latvia 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Hotel Latvia: Sell Out, Hang Out or Partner? 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 Hotel Latvia 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Hotel Latvia 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.
Lack of clear differentiation of Hotel Latvia products
– To increase the profitability and margins on the products, Hotel Latvia needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Hotel Latvia: Sell Out, Hang Out or Partner? | 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 Hotel Latvia: Sell Out, Hang Out or Partner? are -
Manufacturing automation
– Hotel Latvia 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hotel Latvia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Hotel Latvia in the consumer business. Now Hotel Latvia can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hotel Latvia can use these opportunities to build new business models that can help the communities that Hotel Latvia operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hotel Latvia 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Hotel Latvia to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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. Hotel Latvia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Hotel Latvia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hotel Latvia: Sell Out, Hang Out or Partner? 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.
Developing new processes and practices
– Hotel Latvia 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hotel Latvia 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 Hotel Latvia to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Hotel Latvia 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.
Learning at scale
– Online learning technologies has now opened space for Hotel Latvia 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.
Creating value in data economy
– The success of analytics program of Hotel Latvia has opened avenues for new revenue streams for the organization in the industry. This can help Hotel Latvia to build a more holistic ecosystem as suggested in the Hotel Latvia: Sell Out, Hang Out or Partner? case study. Hotel Latvia can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Hotel Latvia: Sell Out, Hang Out or Partner? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hotel Latvia: Sell Out, Hang Out or Partner? are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hotel Latvia 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.
Environmental challenges
– Hotel Latvia 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. Hotel Latvia can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hotel Latvia 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 Hotel Latvia: Sell Out, Hang Out or Partner? .
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. Hotel Latvia 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 Hotel Latvia business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hotel Latvia: Sell Out, Hang Out or Partner?, Hotel Latvia 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 .
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 Hotel Latvia in the Strategy & Execution sector and impact the bottomline of the organization.
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. Hotel Latvia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Shortening product life cycle
– it is one of the major threat that Hotel Latvia is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Hotel Latvia.
Regulatory challenges
– Hotel Latvia 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.
Stagnating economy with rate increase
– Hotel Latvia 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.
Weighted SWOT Analysis of Hotel Latvia: Sell Out, Hang Out or Partner? 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 Hotel Latvia: Sell Out, Hang Out or Partner? 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 Hotel Latvia: Sell Out, Hang Out or Partner? 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 Hotel Latvia: Sell Out, Hang Out or Partner? 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 Hotel Latvia: Sell Out, Hang Out or Partner? 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 Hotel Latvia needs to make to build a sustainable competitive advantage.