In just seven days, the Ritz-Carlton transforms newly hired employees into "Ladies and Gentlemen Serving Ladies and Gentlemen." The case details a new hotel launch, focusing on the unique blend of leadership, quality processes, and values of self-respect and dignity, to create award-winning service.
Swot Analysis of "Ritz-Carlton Hotel Co." written by Sandra J. Sucher, Stacy McManus includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gentlemen Ladies facing as an external strategic factors. Some of the topics covered in Ritz-Carlton Hotel Co. case study are - Strategic Management Strategies, Change management, Human resource management, Innovation, Operations management, Organizational culture and Technology & Operations.
Some of the macro environment factors that can be used to understand the Ritz-Carlton Hotel Co. casestudy better are - – technology disruption, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Ritz-Carlton Hotel Co.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ritz-Carlton Hotel Co. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gentlemen Ladies, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gentlemen Ladies 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 Ritz-Carlton Hotel Co. can be done for the following purposes –
1. Strategic planning using facts provided in Ritz-Carlton Hotel Co. case study
2. Improving business portfolio management of Gentlemen Ladies
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gentlemen Ladies
Strengths Ritz-Carlton Hotel Co. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gentlemen Ladies in Ritz-Carlton Hotel Co. Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Gentlemen Ladies in the sector have low bargaining power. Ritz-Carlton Hotel Co. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gentlemen Ladies to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Gentlemen Ladies digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gentlemen Ladies 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.
Highly skilled collaborators
– Gentlemen Ladies 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 Ritz-Carlton Hotel Co. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Technology & Operations field
– Gentlemen Ladies is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Gentlemen Ladies in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Gentlemen Ladies is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Gentlemen Ladies 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.
Training and development
– Gentlemen Ladies has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ritz-Carlton Hotel Co. 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.
Innovation driven organization
– Gentlemen Ladies is one of the most innovative firm in sector. Manager in Ritz-Carlton Hotel Co. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Technology & Operations industry
– Ritz-Carlton Hotel Co. firm has clearly differentiated products in the market place. This has enabled Gentlemen Ladies to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Gentlemen Ladies to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Gentlemen Ladies is present in almost all the verticals within the industry. This has provided firm in Ritz-Carlton Hotel Co. 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.
Superior customer experience
– The customer experience strategy of Gentlemen Ladies in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Gentlemen Ladies 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 Gentlemen Ladies is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ritz-Carlton Hotel Co. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Ritz-Carlton Hotel Co. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ritz-Carlton Hotel Co. are -
High operating costs
– Compare to the competitors, firm in the HBR case study Ritz-Carlton Hotel Co. 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 Gentlemen Ladies 's lucrative customers.
Products dominated business model
– Even though Gentlemen Ladies 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 - Ritz-Carlton Hotel Co. should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Gentlemen Ladies is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Gentlemen Ladies needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gentlemen Ladies to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Gentlemen Ladies 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.
Slow to strategic competitive environment developments
– As Ritz-Carlton Hotel Co. HBR case study mentions - Gentlemen Ladies 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.
Aligning sales with marketing
– It come across in the case study Ritz-Carlton Hotel Co. 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 Ritz-Carlton Hotel Co. can leverage the sales team experience to cultivate customer relationships as Gentlemen Ladies is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ritz-Carlton Hotel Co., in the dynamic environment Gentlemen Ladies has struggled to respond to the nimble upstart competition. Gentlemen Ladies has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ritz-Carlton Hotel Co., is just above the industry average. Gentlemen Ladies needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Skills based hiring
– The stress on hiring functional specialists at Gentlemen Ladies has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Ritz-Carlton Hotel Co., it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Lack of clear differentiation of Gentlemen Ladies products
– To increase the profitability and margins on the products, Gentlemen Ladies needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Ritz-Carlton Hotel Co. | 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 Ritz-Carlton Hotel Co. are -
Leveraging digital technologies
– Gentlemen Ladies 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Gentlemen Ladies 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. Gentlemen Ladies 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gentlemen Ladies 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Gentlemen Ladies can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Gentlemen Ladies has opened avenues for new revenue streams for the organization in the industry. This can help Gentlemen Ladies to build a more holistic ecosystem as suggested in the Ritz-Carlton Hotel Co. case study. Gentlemen Ladies can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gentlemen Ladies is facing challenges because of the dominance of functional experts in the organization. Ritz-Carlton Hotel Co. 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gentlemen Ladies can use these opportunities to build new business models that can help the communities that Gentlemen Ladies operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Developing new processes and practices
– Gentlemen Ladies can develop new processes and procedures in Technology & Operations 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.
Buying journey improvements
– Gentlemen Ladies can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ritz-Carlton Hotel Co. 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 Gentlemen Ladies 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gentlemen Ladies 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 Gentlemen Ladies to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Gentlemen Ladies 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 Technology & Operations segment.
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. Gentlemen Ladies can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Ritz-Carlton Hotel Co. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ritz-Carlton Hotel Co. are -
High dependence on third party suppliers
– Gentlemen Ladies 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.
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. Gentlemen Ladies 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.
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. Gentlemen Ladies needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Regulatory challenges
– Gentlemen Ladies 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 Technology & Operations industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ritz-Carlton Hotel Co., Gentlemen Ladies may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gentlemen Ladies can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gentlemen Ladies in the Technology & Operations industry. The Technology & Operations 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
– Gentlemen Ladies 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. Gentlemen Ladies can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Gentlemen Ladies
– 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 Gentlemen Ladies.
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 Gentlemen Ladies business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gentlemen Ladies with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Gentlemen Ladies.
Weighted SWOT Analysis of Ritz-Carlton Hotel Co. 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 Ritz-Carlton Hotel Co. 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 Ritz-Carlton Hotel Co. 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 Ritz-Carlton Hotel Co. 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 Ritz-Carlton Hotel Co. 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 Gentlemen Ladies needs to make to build a sustainable competitive advantage.
