Globalization of Hyatt Place SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Globalization of Hyatt Place
Multinational, multi-brand hotel corporations serve almost all segments of the market. They own hotels and work with other hotel owners through leases, management contracts and franchise agreements. In the hotel business it is widespread to receive contracts for management, but many well-known players use franchising agreements during their global expansion. In 2011, Hyatt Hotels Corporation has announced that its select-service brands are expanding internationally. Among other issues, the leadership of the corporation now needs to find answers for several questions: What modes of entry should be used in brand internationalization? How should new internationalization opportunities be pursued for the lower-category Hyatt Place while maintaining the company's premium brand? Gevork Papiryan is affiliated with Academy of National Economy and Public Policy.
Swot Analysis of "Globalization of Hyatt Place" written by Gevork Papiryan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hyatt Hotel facing as an external strategic factors. Some of the topics covered in Globalization of Hyatt Place case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Globalization of Hyatt Place casestudy better are - – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
geopolitical disruptions, technology disruption, etc
Introduction to SWOT Analysis of Globalization of Hyatt Place
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Globalization of Hyatt Place case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hyatt Hotel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hyatt Hotel 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 Globalization of Hyatt Place can be done for the following purposes –
1. Strategic planning using facts provided in Globalization of Hyatt Place case study
2. Improving business portfolio management of Hyatt Hotel
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 Hyatt Hotel
Strengths Globalization of Hyatt Place | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hyatt Hotel in Globalization of Hyatt Place Harvard Business Review case study are -
Learning organization
- Hyatt Hotel 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 Hyatt Hotel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Globalization of Hyatt Place Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hyatt Hotel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hyatt Hotel 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.
Ability to recruit top talent
– Hyatt Hotel is one of the leading recruiters in the industry. Managers in the Globalization of Hyatt Place are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Hyatt Hotel 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
– Hyatt Hotel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hyatt Hotel 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.
Low bargaining power of suppliers
– Suppliers of Hyatt Hotel in the sector have low bargaining power. Globalization of Hyatt Place has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hyatt Hotel to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Hyatt Hotel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Hyatt Hotel is present in almost all the verticals within the industry. This has provided firm in Globalization of Hyatt Place 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Globalization of Hyatt Place firm has clearly differentiated products in the market place. This has enabled Hyatt Hotel to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Hyatt Hotel to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Hyatt Hotel 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 Globalization of Hyatt Place HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Hyatt Hotel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Globalization of Hyatt Place Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Hyatt Hotel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hyatt Hotel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Globalization of Hyatt Place | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Globalization of Hyatt Place are -
Lack of clear differentiation of Hyatt Hotel products
– To increase the profitability and margins on the products, Hyatt Hotel needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Hyatt Hotel 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.
Need for greater diversity
– Hyatt Hotel 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 existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Hyatt Hotel supply chain. Even after few cautionary changes mentioned in the HBR case study - Globalization of Hyatt Place, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hyatt Hotel vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Globalization of Hyatt Place, it seems that the employees of Hyatt Hotel don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High operating costs
– Compare to the competitors, firm in the HBR case study Globalization of Hyatt Place 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 Hyatt Hotel 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Hyatt Hotel is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Hyatt Hotel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hyatt Hotel to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Hyatt Hotel has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Globalization of Hyatt Place HBR case study mentions - Hyatt Hotel 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Globalization of Hyatt Place 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 Hyatt Hotel has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Globalization of Hyatt Place 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 Globalization of Hyatt Place can leverage the sales team experience to cultivate customer relationships as Hyatt Hotel is planning to shift buying processes online.
Opportunities Globalization of Hyatt Place | 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 Globalization of Hyatt Place are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hyatt Hotel 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 Hyatt Hotel in the consumer business. Now Hyatt Hotel can target international markets with far fewer capital restrictions requirements than the existing system.
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. Hyatt Hotel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Hyatt Hotel can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hyatt Hotel 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, Globalization of Hyatt Place, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Hyatt Hotel 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hyatt Hotel can use these opportunities to build new business models that can help the communities that Hyatt Hotel 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 Hyatt Hotel 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.
Buying journey improvements
– Hyatt Hotel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Globalization of Hyatt Place 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.
Learning at scale
– Online learning technologies has now opened space for Hyatt Hotel 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hyatt Hotel is facing challenges because of the dominance of functional experts in the organization. Globalization of Hyatt Place 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hyatt Hotel 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 Hyatt Hotel has opened avenues for new revenue streams for the organization in the industry. This can help Hyatt Hotel to build a more holistic ecosystem as suggested in the Globalization of Hyatt Place case study. Hyatt Hotel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Globalization of Hyatt Place External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Globalization of Hyatt Place are -
Increasing wage structure of Hyatt Hotel
– 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 Hyatt Hotel.
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.
Environmental challenges
– Hyatt Hotel 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. Hyatt Hotel can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hyatt Hotel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Hyatt Hotel 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.
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. Hyatt Hotel needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Hyatt Hotel 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.
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.
Stagnating economy with rate increase
– Hyatt Hotel 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.
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 Hyatt Hotel.
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 Hyatt Hotel in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hyatt Hotel 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Globalization of Hyatt Place, Hyatt Hotel 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 .
Weighted SWOT Analysis of Globalization of Hyatt Place 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 Globalization of Hyatt Place 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 Globalization of Hyatt Place 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 Globalization of Hyatt Place 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 Globalization of Hyatt Place 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 Hyatt Hotel needs to make to build a sustainable competitive advantage.
