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 - – challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, there is backlash against globalization,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
Innovation driven organization
– Palmas Rancho is one of the most innovative firm in sector. Manager in Marriott's Rancho Las Palmas Resort Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Effective Research and Development (R&D)
– Palmas Rancho 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 Marriott's Rancho Las Palmas Resort - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Marriott's Rancho Las Palmas Resort 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.
Organizational Resilience of Palmas Rancho
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Palmas Rancho does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Palmas Rancho has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Palmas Rancho to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Low bargaining power of suppliers
– Suppliers of Palmas Rancho in the sector have low bargaining power. Marriott's Rancho Las Palmas Resort has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Palmas Rancho to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Palmas Rancho digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Palmas Rancho 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.
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 -
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Palmas Rancho 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.
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.
Skills based hiring
– The stress on hiring functional specialists at Palmas Rancho 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Marriott's Rancho Las Palmas Resort, it seems that the employees of Palmas Rancho don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Marriott's Rancho Las Palmas Resort HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Palmas Rancho has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Palmas Rancho 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.
High cash cycle compare to competitors
Palmas Rancho 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.
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.
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 -
Buying journey improvements
– Palmas Rancho can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Marriott's Rancho Las Palmas Resort 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Palmas Rancho in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Palmas Rancho 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 Marriott's Rancho Las Palmas Resort - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Palmas Rancho to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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 Palmas Rancho 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.
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. Palmas Rancho 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. Palmas Rancho 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.
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.
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.
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.
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.
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.
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.
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 -
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. Palmas Rancho 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.
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 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 .
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.
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.
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 Palmas Rancho in the Technology & Operations sector and impact the bottomline of the organization.
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.
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.
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.
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 .
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.
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. Palmas Rancho needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.