Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version

Explores the interface of an information system that keeps track of guests and their preferences, and the people systems that deliver multiple services at Ritz-Carlton hotels. The luxury hotel chain's unique service credo and commitment to quality principles are discussed as well as the attention to hiring and training. At the heart of the case is the Ritz-Carlton commitment to serving the customer.

Authors :: W. Earl Sasser Jr., Thomas O. Jones, Norman Klein

Topics :: Technology & Operations

Tags :: Developing employees, IT, Motivating people, Organizational culture, Product development, Supply chain, Talent management, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version" written by W. Earl Sasser Jr., Thomas O. Jones, Norman Klein includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Carlton Ritz facing as an external strategic factors. Some of the topics covered in Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version case study are - Strategic Management Strategies, Developing employees, IT, Motivating people, Organizational culture, Product development, Supply chain, Talent management and Technology & Operations.

Some of the macro environment factors that can be used to understand the Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version casestudy better are - – digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing commodity prices, challanges to central banks by blockchain based private currencies, wage bills are increasing, there is backlash against globalization, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc

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Introduction to SWOT Analysis of Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Carlton Ritz, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Carlton Ritz 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version case study
2. Improving business portfolio management of Carlton Ritz
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 Carlton Ritz

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Strengths Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Carlton Ritz in Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version Harvard Business Review case study are -

Successful track record of launching new products

– Carlton Ritz has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Carlton Ritz 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

– Carlton Ritz 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: Using Information Systems to Better Serve the Customer, Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Superior customer experience

– The customer experience strategy of Carlton Ritz in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Strong track record of project management

– Carlton Ritz is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Effective Research and Development (R&D)

– Carlton Ritz 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 Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Innovation driven organization

– Carlton Ritz is one of the most innovative firm in sector. Manager in Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Analytics focus

– Carlton Ritz 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 W. Earl Sasser Jr., Thomas O. Jones, Norman Klein 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.

Ability to lead change in Technology & Operations field

– Carlton Ritz 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 Carlton Ritz in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Diverse revenue streams

– Carlton Ritz is present in almost all the verticals within the industry. This has provided firm in Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version 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 Technology & Operations industry

– Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version firm has clearly differentiated products in the market place. This has enabled Carlton Ritz to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Carlton Ritz to invest into research and development (R&D) and innovation.

Cross disciplinary teams

– Horizontal connected teams at the Carlton Ritz 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.

High switching costs

– The high switching costs that Carlton Ritz 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.

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Weaknesses Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version are -

Aligning sales with marketing

– It come across in the case study Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version 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: Using Information Systems to Better Serve the Customer, Spanish Version can leverage the sales team experience to cultivate customer relationships as Carlton Ritz is planning to shift buying processes online.

Lack of clear differentiation of Carlton Ritz products

– To increase the profitability and margins on the products, Carlton Ritz 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, Carlton Ritz 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.

Skills based hiring

– The stress on hiring functional specialists at Carlton Ritz 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.

High operating costs

– Compare to the competitors, firm in the HBR case study Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version 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 Carlton Ritz 's lucrative customers.

Products dominated business model

– Even though Carlton Ritz 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: Using Information Systems to Better Serve the Customer, Spanish Version should strive to include more intangible value offerings along with its core products and services.

Slow decision making process

– As mentioned earlier in the report, Carlton Ritz 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. Carlton Ritz 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.

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 Carlton Ritz supply chain. Even after few cautionary changes mentioned in the HBR case study - Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Carlton Ritz vulnerable to further global disruptions in South East Asia.

Need for greater diversity

– Carlton Ritz 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 cash cycle compare to competitors

Carlton Ritz 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.

Low market penetration in new markets

– Outside its home market of Carlton Ritz, firm in the HBR case study Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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Opportunities Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version | 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: Using Information Systems to Better Serve the Customer, Spanish Version are -

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Carlton Ritz 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, Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Carlton Ritz can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Learning at scale

– Online learning technologies has now opened space for Carlton Ritz 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 Carlton Ritz 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 Carlton Ritz to hire the very best people irrespective of their geographical location.

Using analytics as competitive advantage

– Carlton Ritz 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 Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Carlton Ritz to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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. Carlton Ritz 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. Carlton Ritz 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Carlton Ritz is facing challenges because of the dominance of functional experts in the organization. Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version 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.

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. Carlton Ritz can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Building a culture of innovation

– managers at Carlton Ritz 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.

Buying journey improvements

– Carlton Ritz can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version 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.

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. Carlton Ritz can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Low interest rates

– Even though inflation is raising its head in most developed economies, Carlton Ritz 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Carlton Ritz can use these opportunities to build new business models that can help the communities that Carlton Ritz operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.

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Threats Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version 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: Using Information Systems to Better Serve the Customer, Spanish Version are -

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. Carlton Ritz 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Carlton Ritz 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 Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version .

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 Carlton Ritz.

Stagnating economy with rate increase

– Carlton Ritz 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.

High dependence on third party suppliers

– Carlton Ritz 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.

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.

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. Carlton Ritz can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Increasing wage structure of Carlton Ritz

– 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 Carlton Ritz.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Carlton Ritz 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.

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 Carlton Ritz in the Technology & Operations sector and impact the bottomline of the organization.

Shortening product life cycle

– it is one of the major threat that Carlton Ritz is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Technology acceleration in Forth Industrial Revolution

– Carlton Ritz has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Carlton Ritz needs to keep up with the evolution of technology in the Technology & Operations 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.

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 Carlton Ritz business can come under increasing regulations regarding data privacy, data security, etc.

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Weighted SWOT Analysis of Ritz-Carlton: Using Information Systems to Better Serve the Customer, Spanish Version 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: Using Information Systems to Better Serve the Customer, Spanish Version 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: Using Information Systems to Better Serve the Customer, Spanish Version 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: Using Information Systems to Better Serve the Customer, Spanish Version 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: Using Information Systems to Better Serve the Customer, Spanish Version 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 Carlton Ritz needs to make to build a sustainable competitive advantage.

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