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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, 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 -
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.
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.
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.
High brand equity
– Hotel Latvia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hotel Latvia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Successful track record of launching new products
– Hotel Latvia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hotel Latvia 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.
Diverse revenue streams
– Hotel Latvia is present in almost all the verticals within the industry. This has provided firm in Hotel Latvia: Sell Out, Hang Out or Partner? 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.
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.
Effective Research and Development (R&D)
– Hotel Latvia 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 Hotel Latvia: Sell Out, Hang Out or Partner? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Operational resilience
– The operational resilience strategy in the Hotel Latvia: Sell Out, Hang Out or Partner? 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.
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 -
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.
Products dominated business model
– Even though Hotel Latvia 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 - Hotel Latvia: Sell Out, Hang Out or Partner? should strive to include more intangible value offerings along with its core products and services.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hotel Latvia: Sell Out, Hang Out or Partner?, it seems that the employees of Hotel Latvia 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 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.
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.
Increasing silos among functional specialists
– The organizational structure of Hotel Latvia is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Hotel Latvia needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hotel Latvia to focus more on services rather than just following the product oriented approach.
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.
Slow decision making process
– As mentioned earlier in the report, Hotel Latvia has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Hotel Latvia even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Low market penetration in new markets
– Outside its home market of Hotel Latvia, firm in the HBR case study Hotel Latvia: Sell Out, Hang Out or Partner? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Hotel Latvia 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.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hotel Latvia 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.
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. Hotel Latvia 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. Hotel Latvia 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.
Using analytics as competitive advantage
– Hotel Latvia 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 Hotel Latvia: Sell Out, Hang Out or Partner? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hotel Latvia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hotel Latvia is facing challenges because of the dominance of functional experts in the organization. Hotel Latvia: Sell Out, Hang Out or Partner? 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hotel Latvia 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, Hotel Latvia: Sell Out, Hang Out or Partner?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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. Hotel Latvia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Hotel Latvia to increase its market reach. Hotel Latvia 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.
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.
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 -
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.
High dependence on third party suppliers
– Hotel Latvia 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.
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.
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. Hotel Latvia 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.
Consumer confidence and its impact on Hotel Latvia 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.
Technology acceleration in Forth Industrial Revolution
– Hotel Latvia has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Hotel Latvia 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.
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.
Increasing wage structure of Hotel Latvia
– 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 Hotel Latvia.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hotel Latvia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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? .
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.
