Majestica Hotel in Shanghai? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Majestica Hotel in Shanghai?
Majestica Hotels Inc., a leading European operator of luxury hotels, was trying to reach an agreement with Commercial Properties of Shanghai regarding the management contract for a new hotel in Shanghai. A series of issues require resolution for the deal to proceed, including length of contract term, name, and staffing. Majestica was reluctant to make further concessions for fear that doing so might jeopardize its service culture, arguably the key success factor in this industry. At issue was whether Majestica should adopt a contingency approach and relax its operating philosophy or stick to its principles, even if it meant not entering a lucrative market.
Swot Analysis of "Majestica Hotel in Shanghai?" written by Paul W. Beamish, Jane Lu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Majestica Shanghai facing as an external strategic factors. Some of the topics covered in Majestica Hotel in Shanghai? case study are - Strategic Management Strategies, Organizational culture and Technology & Operations.
Some of the macro environment factors that can be used to understand the Majestica Hotel in Shanghai? casestudy better are - – central banks are concerned over increasing inflation, increasing household debt because of falling income levels, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, technology disruption, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Majestica Hotel in Shanghai?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Majestica Hotel in Shanghai? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Majestica Shanghai, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Majestica Shanghai 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 Majestica Hotel in Shanghai? can be done for the following purposes –
1. Strategic planning using facts provided in Majestica Hotel in Shanghai? case study
2. Improving business portfolio management of Majestica Shanghai
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 Majestica Shanghai
Strengths Majestica Hotel in Shanghai? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Majestica Shanghai in Majestica Hotel in Shanghai? Harvard Business Review case study are -
Analytics focus
– Majestica Shanghai 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 Paul W. Beamish, Jane Lu 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.
Highly skilled collaborators
– Majestica Shanghai 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 Majestica Hotel in Shanghai? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Majestica Hotel in Shanghai? 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.
Diverse revenue streams
– Majestica Shanghai is present in almost all the verticals within the industry. This has provided firm in Majestica Hotel in Shanghai? 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.
Learning organization
- Majestica Shanghai 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 Majestica Shanghai is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Majestica Hotel in Shanghai? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Majestica Shanghai 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
– Majestica Shanghai has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Majestica Shanghai 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.
Organizational Resilience of Majestica Shanghai
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Majestica Shanghai does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Majestica Shanghai is one of the leading recruiters in the industry. Managers in the Majestica Hotel in Shanghai? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Majestica Shanghai digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Majestica Shanghai 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.
High switching costs
– The high switching costs that Majestica Shanghai 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.
Superior customer experience
– The customer experience strategy of Majestica Shanghai in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Majestica Hotel in Shanghai? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Majestica Hotel in Shanghai? are -
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 Majestica Shanghai supply chain. Even after few cautionary changes mentioned in the HBR case study - Majestica Hotel in Shanghai?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Majestica Shanghai vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Majestica Shanghai 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.
Slow to strategic competitive environment developments
– As Majestica Hotel in Shanghai? HBR case study mentions - Majestica Shanghai 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.
Capital Spending Reduction
– Even during the low interest decade, Majestica Shanghai 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Majestica Hotel in Shanghai?, is just above the industry average. Majestica Shanghai 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.
No frontier risks strategy
– After analyzing the HBR case study Majestica Hotel in Shanghai?, 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 Majestica Shanghai products
– To increase the profitability and margins on the products, Majestica Shanghai needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Majestica Shanghai, firm in the HBR case study Majestica Hotel in Shanghai? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Paul W. Beamish, Jane Lu suggests that, Majestica Shanghai is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Increasing silos among functional specialists
– The organizational structure of Majestica Shanghai is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Majestica Shanghai needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Majestica Shanghai to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Majestica Shanghai 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.
Opportunities Majestica Hotel in Shanghai? | 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 Majestica Hotel in Shanghai? are -
Better consumer reach
– The expansion of the 5G network will help Majestica Shanghai to increase its market reach. Majestica Shanghai will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Majestica Shanghai 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Majestica Shanghai can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Majestica Shanghai can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Majestica Hotel in Shanghai? 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.
Using analytics as competitive advantage
– Majestica Shanghai 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 Majestica Hotel in Shanghai? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Majestica Shanghai to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Majestica Shanghai 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.
Manufacturing automation
– Majestica Shanghai can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Majestica Shanghai is facing challenges because of the dominance of functional experts in the organization. Majestica Hotel in Shanghai? 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.
Creating value in data economy
– The success of analytics program of Majestica Shanghai has opened avenues for new revenue streams for the organization in the industry. This can help Majestica Shanghai to build a more holistic ecosystem as suggested in the Majestica Hotel in Shanghai? case study. Majestica Shanghai can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Majestica Shanghai in the consumer business. Now Majestica Shanghai can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Majestica Shanghai 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.
Learning at scale
– Online learning technologies has now opened space for Majestica Shanghai 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 Majestica Shanghai 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 Majestica Shanghai to hire the very best people irrespective of their geographical location.
Threats Majestica Hotel in Shanghai? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Majestica Hotel in Shanghai? 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. Majestica Shanghai 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Majestica Shanghai 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.
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 Majestica Shanghai.
Increasing wage structure of Majestica Shanghai
– 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 Majestica Shanghai.
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. Majestica Shanghai can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Majestica Shanghai is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Majestica Shanghai 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Majestica Shanghai 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 Majestica Hotel in Shanghai? .
Technology acceleration in Forth Industrial Revolution
– Majestica Shanghai has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Majestica Shanghai 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.
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. Majestica Shanghai needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Regulatory challenges
– Majestica Shanghai 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 Majestica Hotel in Shanghai?, Majestica Shanghai 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 .
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 Majestica Shanghai business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Majestica Hotel in Shanghai? 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 Majestica Hotel in Shanghai? 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 Majestica Hotel in Shanghai? 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 Majestica Hotel in Shanghai? 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 Majestica Hotel in Shanghai? 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 Majestica Shanghai needs to make to build a sustainable competitive advantage.
