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 backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, wage bills are increasing, geopolitical disruptions, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
increasing energy prices, technology disruption, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
High cash cycle compare to competitors
Ashh Kandalama has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ashh Kandalama has relatively successful track record of launching new products.
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.
Aligning sales with marketing
– It come across in the case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism 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 Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism can leverage the sales team experience to cultivate customer relationships as Ashh Kandalama is planning to shift buying processes online.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
Developing new processes and practices
– Ashh Kandalama can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
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 Ashh Kandalama 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.
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.
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.
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.
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.
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 -
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.
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.
Consumer confidence and its impact on Ashh Kandalama demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sri Lanka's Aitken Spence Hotel Holdings: Competitive Strategy and Sustainable Tourism, Ashh Kandalama may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Technology acceleration in Forth Industrial Revolution
– Ashh Kandalama has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ashh Kandalama needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 .
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.
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.
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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