Shangri-La Hotels and Resorts: Achieving Service Leadership SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Shangri-La Hotels and Resorts: Achieving Service Leadership
Shangri-La Hotels and Resorts (SLA) owns and manages the largest deluxe chain in Asia. In 1993, the managing director recognized that there was a need to create a common goal and a set of common values to bind all Shangri-La Hotels and to instill among them the feeling that they were all part of the same organization. The "Shangri-La 2000" strategic plan was developed to achieve these objectives. This case provides a detailed account of the formulation process of "Shangri-La 2000" and how it was communicated to every employee at Kowloon Shangri-La (KSL)--one of the 38 Shangri-La Hotels. A major challenge faced by the general manager of KSL was how to interpret the performance measurements taken before and after the implementation of the strategic plan to assess its effectiveness. He also wondered what he could do to maintain the momentum of "Shangri-La 2000" at KSL amid the adverse operating environment brought about by the Asian economic crisis.
Swot Analysis of "Shangri-La Hotels and Resorts: Achieving Service Leadership" written by Gerard Tocquer, Eva Y.H. Kwan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shangri La facing as an external strategic factors. Some of the topics covered in Shangri-La Hotels and Resorts: Achieving Service Leadership case study are - Strategic Management Strategies, Organizational culture, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Shangri-La Hotels and Resorts: Achieving Service Leadership casestudy better are - – challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing household debt because of falling income levels, technology disruption, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings,
wage bills are increasing, increasing energy prices, etc
Introduction to SWOT Analysis of Shangri-La Hotels and Resorts: Achieving Service Leadership
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shangri-La Hotels and Resorts: Achieving Service Leadership case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shangri La, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shangri La 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 Shangri-La Hotels and Resorts: Achieving Service Leadership can be done for the following purposes –
1. Strategic planning using facts provided in Shangri-La Hotels and Resorts: Achieving Service Leadership case study
2. Improving business portfolio management of Shangri La
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 Shangri La
Strengths Shangri-La Hotels and Resorts: Achieving Service Leadership | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shangri La in Shangri-La Hotels and Resorts: Achieving Service Leadership Harvard Business Review case study are -
Analytics focus
– Shangri La 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 Gerard Tocquer, Eva Y.H. Kwan 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 recruit top talent
– Shangri La is one of the leading recruiters in the industry. Managers in the Shangri-La Hotels and Resorts: Achieving Service Leadership are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Shangri La has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shangri La to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Shangri La is present in almost all the verticals within the industry. This has provided firm in Shangri-La Hotels and Resorts: Achieving Service Leadership 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.
Strong track record of project management
– Shangri La is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Shangri La
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shangri La does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Shangri La 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 Shangri La is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Shangri-La Hotels and Resorts: Achieving Service Leadership Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Shangri La 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 Shangri-La Hotels and Resorts: Achieving Service Leadership - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Shangri La in the sector have low bargaining power. Shangri-La Hotels and Resorts: Achieving Service Leadership has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shangri La to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Shangri La in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Shangri La is one of the most innovative firm in sector. Manager in Shangri-La Hotels and Resorts: Achieving Service Leadership Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Shangri La has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shangri La 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.
Weaknesses Shangri-La Hotels and Resorts: Achieving Service Leadership | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shangri-La Hotels and Resorts: Achieving Service Leadership are -
Low market penetration in new markets
– Outside its home market of Shangri La, firm in the HBR case study Shangri-La Hotels and Resorts: Achieving Service Leadership needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Shangri-La Hotels and Resorts: Achieving Service Leadership HBR case study mentions - Shangri La 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.
No frontier risks strategy
– After analyzing the HBR case study Shangri-La Hotels and Resorts: Achieving Service Leadership, 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.
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 Shangri La supply chain. Even after few cautionary changes mentioned in the HBR case study - Shangri-La Hotels and Resorts: Achieving Service Leadership, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shangri La vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Shangri La 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 - Shangri-La Hotels and Resorts: Achieving Service Leadership should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Shangri-La Hotels and Resorts: Achieving Service Leadership 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 Shangri La 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Shangri-La Hotels and Resorts: Achieving Service Leadership, is just above the industry average. Shangri La 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.
Capital Spending Reduction
– Even during the low interest decade, Shangri La 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.
Slow decision making process
– As mentioned earlier in the report, Shangri La 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. Shangri La 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Shangri-La Hotels and Resorts: Achieving Service Leadership, in the dynamic environment Shangri La has struggled to respond to the nimble upstart competition. Shangri La has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Shangri-La Hotels and Resorts: Achieving Service Leadership 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 Shangri-La Hotels and Resorts: Achieving Service Leadership can leverage the sales team experience to cultivate customer relationships as Shangri La is planning to shift buying processes online.
Opportunities Shangri-La Hotels and Resorts: Achieving Service Leadership | 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 Shangri-La Hotels and Resorts: Achieving Service Leadership are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shangri La can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shangri La is facing challenges because of the dominance of functional experts in the organization. Shangri-La Hotels and Resorts: Achieving Service Leadership 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 Shangri La has opened avenues for new revenue streams for the organization in the industry. This can help Shangri La to build a more holistic ecosystem as suggested in the Shangri-La Hotels and Resorts: Achieving Service Leadership case study. Shangri La can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Shangri La 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.
Building a culture of innovation
– managers at Shangri La 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shangri La can use these opportunities to build new business models that can help the communities that Shangri La operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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. Shangri La can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Shangri La can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shangri-La Hotels and Resorts: Achieving Service Leadership 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shangri La 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 Shangri La to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Shangri La 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 Shangri-La Hotels and Resorts: Achieving Service Leadership - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shangri La to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Shangri La 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.
Leveraging digital technologies
– Shangri La 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. Shangri La 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. Shangri La 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.
Threats Shangri-La Hotels and Resorts: Achieving Service Leadership External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shangri-La Hotels and Resorts: Achieving Service Leadership are -
High dependence on third party suppliers
– Shangri La 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 wage structure of Shangri La
– 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 Shangri La.
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. Shangri La needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Shangri La has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Shangri La 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.
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
– Shangri La 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.
Shortening product life cycle
– it is one of the major threat that Shangri La is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Shangri La can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shangri La 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Shangri-La Hotels and Resorts: Achieving Service Leadership, Shangri La 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 .
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 Shangri La.
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 Shangri La business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Shangri-La Hotels and Resorts: Achieving Service Leadership 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 Shangri-La Hotels and Resorts: Achieving Service Leadership 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 Shangri-La Hotels and Resorts: Achieving Service Leadership 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 Shangri-La Hotels and Resorts: Achieving Service Leadership 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 Shangri-La Hotels and Resorts: Achieving Service Leadership 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 Shangri La needs to make to build a sustainable competitive advantage.
