Case Study Description of Marriott's Rancho Las Palmas Resort
Management of a resort hotel near Palm Springs is reviewing the hotel's performance nine months after opening and planning a marketing strategy for 1980. Of particular concern is the strategy to adopt during the shoulder and off-seasons when demand for the product is lower. Should the hotel even remain open in the summer when other major hotels in the area are closed? Will attempts to stimulate summer demand negate the hotel's efforts to win a five-star rating? Twelve pages of exhibits include data on hotel usage in the area, and operating costs and revenues for Rancho Las Palmas.
Swot Analysis of "Marriott's Rancho Las Palmas Resort" written by Christopher H. Lovelock includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Palmas Rancho facing as an external strategic factors. Some of the topics covered in Marriott's Rancho Las Palmas Resort case study are - Strategic Management Strategies, Communication, Economics, Marketing, Pricing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Marriott's Rancho Las Palmas Resort casestudy better are - – there is increasing trade war between United States & China, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs,
increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Marriott's Rancho Las Palmas Resort
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Marriott's Rancho Las Palmas Resort case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Palmas Rancho, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Palmas Rancho 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 Marriott's Rancho Las Palmas Resort can be done for the following purposes –
1. Strategic planning using facts provided in Marriott's Rancho Las Palmas Resort case study
2. Improving business portfolio management of Palmas Rancho
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 Palmas Rancho
Strengths Marriott's Rancho Las Palmas Resort | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Palmas Rancho in Marriott's Rancho Las Palmas Resort Harvard Business Review case study are -
Successful track record of launching new products
– Palmas Rancho has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Palmas Rancho 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
– Palmas Rancho 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 Marriott's Rancho Las Palmas Resort HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– Marriott's Rancho Las Palmas Resort firm has clearly differentiated products in the market place. This has enabled Palmas Rancho to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Palmas Rancho to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Palmas Rancho 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
– Palmas Rancho has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Marriott's Rancho Las Palmas Resort 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.
Analytics focus
– Palmas Rancho 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 Christopher H. Lovelock 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.
Diverse revenue streams
– Palmas Rancho is present in almost all the verticals within the industry. This has provided firm in Marriott's Rancho Las Palmas Resort 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.
High switching costs
– The high switching costs that Palmas Rancho 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.
Learning organization
- Palmas Rancho 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 Palmas Rancho is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Marriott's Rancho Las Palmas Resort Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Palmas Rancho 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
– Palmas Rancho is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Palmas Rancho is one of the leading recruiters in the industry. Managers in the Marriott's Rancho Las Palmas Resort are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Marriott's Rancho Las Palmas Resort | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Marriott's Rancho Las Palmas Resort are -
High operating costs
– Compare to the competitors, firm in the HBR case study Marriott's Rancho Las Palmas Resort 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 Palmas Rancho 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Marriott's Rancho Las Palmas Resort, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Palmas Rancho is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Marriott's Rancho Las Palmas Resort can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Marriott's Rancho Las Palmas Resort, in the dynamic environment Palmas Rancho has struggled to respond to the nimble upstart competition. Palmas Rancho has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Palmas Rancho 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 - Marriott's Rancho Las Palmas Resort should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Palmas Rancho is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Palmas Rancho needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Palmas Rancho to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Palmas Rancho has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Christopher H. Lovelock suggests that, Palmas Rancho 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.
Aligning sales with marketing
– It come across in the case study Marriott's Rancho Las Palmas Resort 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 Marriott's Rancho Las Palmas Resort can leverage the sales team experience to cultivate customer relationships as Palmas Rancho is planning to shift buying processes online.
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 Palmas Rancho supply chain. Even after few cautionary changes mentioned in the HBR case study - Marriott's Rancho Las Palmas Resort, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Palmas Rancho vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Palmas Rancho 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. Palmas Rancho 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.
Opportunities Marriott's Rancho Las Palmas Resort | 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 Marriott's Rancho Las Palmas Resort are -
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. Palmas Rancho can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Palmas Rancho can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Palmas Rancho 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.
Leveraging digital technologies
– Palmas Rancho 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.
Loyalty marketing
– Palmas Rancho 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.
Building a culture of innovation
– managers at Palmas Rancho 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Palmas Rancho is facing challenges because of the dominance of functional experts in the organization. Marriott's Rancho Las Palmas Resort 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, Palmas Rancho can use these opportunities to build new business models that can help the communities that Palmas Rancho operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Creating value in data economy
– The success of analytics program of Palmas Rancho has opened avenues for new revenue streams for the organization in the industry. This can help Palmas Rancho to build a more holistic ecosystem as suggested in the Marriott's Rancho Las Palmas Resort case study. Palmas Rancho 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 Palmas Rancho in the consumer business. Now Palmas Rancho can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Palmas Rancho 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 Palmas Rancho to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Palmas Rancho 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.
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. Palmas Rancho can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Marriott's Rancho Las Palmas Resort External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Marriott's Rancho Las Palmas Resort are -
Technology acceleration in Forth Industrial Revolution
– Palmas Rancho has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Palmas Rancho 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.
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. Palmas Rancho 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Palmas Rancho with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Palmas Rancho 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Marriott's Rancho Las Palmas Resort, Palmas Rancho 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Palmas Rancho 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 Marriott's Rancho Las Palmas Resort .
Environmental challenges
– Palmas Rancho 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. Palmas Rancho can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Consumer confidence and its impact on Palmas Rancho demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
Shortening product life cycle
– it is one of the major threat that Palmas Rancho is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Palmas Rancho business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Palmas Rancho 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.
Increasing wage structure of Palmas Rancho
– 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 Palmas Rancho.
Weighted SWOT Analysis of Marriott's Rancho Las Palmas Resort 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 Marriott's Rancho Las Palmas Resort 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 Marriott's Rancho Las Palmas Resort 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 Marriott's Rancho Las Palmas Resort 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 Marriott's Rancho Las Palmas Resort 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 Palmas Rancho needs to make to build a sustainable competitive advantage.