Sunday River is a ski area in Bethel, ME which has been run by entrepreneur Les Otten since 1980. The year before Otten purchased the area, it posted a loss of $235,000 on revenues of $541,000. Under Otten's leadership, however, Sunday River posted year after year of growth and profit to become one of the leading Eastern ski areas. Its strategy focused on providing the best snow surface possible. Sunday River's success is particularly impressive in the overall context of the ski resort industry which has been plagued by losses and bankruptcy.
Swot Analysis of "Sunday River Ski Resort" written by Leonard A. Schlesinger, Martha Epstein includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sunday Ski facing as an external strategic factors. Some of the topics covered in Sunday River Ski Resort case study are - Strategic Management Strategies, Competitive strategy, Entrepreneurship, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Sunday River Ski Resort casestudy better are - – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, challanges to central banks by blockchain based private currencies,
technology disruption, increasing commodity prices, etc
Introduction to SWOT Analysis of Sunday River Ski Resort
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sunday River Ski Resort case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sunday Ski, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sunday Ski 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 Sunday River Ski Resort can be done for the following purposes –
1. Strategic planning using facts provided in Sunday River Ski Resort case study
2. Improving business portfolio management of Sunday Ski
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 Sunday Ski
Strengths Sunday River Ski Resort | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sunday Ski in Sunday River Ski Resort Harvard Business Review case study are -
High switching costs
– The high switching costs that Sunday Ski 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.
Operational resilience
– The operational resilience strategy in the Sunday River Ski 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.
Training and development
– Sunday Ski has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sunday River Ski 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.
Organizational Resilience of Sunday Ski
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sunday Ski does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Technology & Operations field
– Sunday Ski is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Sunday Ski in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Sunday Ski has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sunday Ski to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Technology & Operations industry
– Sunday River Ski Resort firm has clearly differentiated products in the market place. This has enabled Sunday Ski to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Sunday Ski to invest into research and development (R&D) and innovation.
Innovation driven organization
– Sunday Ski is one of the most innovative firm in sector. Manager in Sunday River Ski Resort Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Sunday Ski in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Sunday Ski has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sunday Ski 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Sunday Ski digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sunday Ski 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.
Learning organization
- Sunday Ski 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 Sunday Ski is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sunday River Ski Resort Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Sunday River Ski Resort | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sunday River Ski Resort are -
High bargaining power of channel partners
– Because of the regulatory requirements, Leonard A. Schlesinger, Martha Epstein suggests that, Sunday Ski 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.
Interest costs
– Compare to the competition, Sunday Ski 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.
Lack of clear differentiation of Sunday Ski products
– To increase the profitability and margins on the products, Sunday Ski needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sunday Ski is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sunday River Ski 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sunday River Ski 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 Sunday Ski 's lucrative customers.
Need for greater diversity
– Sunday Ski has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Sunday Ski 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.
Capital Spending Reduction
– Even during the low interest decade, Sunday Ski 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.
Skills based hiring
– The stress on hiring functional specialists at Sunday Ski 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.
Aligning sales with marketing
– It come across in the case study Sunday River Ski 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 Sunday River Ski Resort can leverage the sales team experience to cultivate customer relationships as Sunday Ski is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sunday River Ski 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 Sunday Ski has relatively successful track record of launching new products.
Opportunities Sunday River Ski 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 Sunday River Ski Resort are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sunday Ski is facing challenges because of the dominance of functional experts in the organization. Sunday River Ski 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.
Learning at scale
– Online learning technologies has now opened space for Sunday Ski 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.
Loyalty marketing
– Sunday Ski 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.
Better consumer reach
– The expansion of the 5G network will help Sunday Ski to increase its market reach. Sunday Ski 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.
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. Sunday Ski can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Sunday Ski 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. Sunday Ski 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.
Creating value in data economy
– The success of analytics program of Sunday Ski has opened avenues for new revenue streams for the organization in the industry. This can help Sunday Ski to build a more holistic ecosystem as suggested in the Sunday River Ski Resort case study. Sunday Ski 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
– Sunday Ski 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 Sunday Ski 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sunday Ski can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Sunday River Ski Resort, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Sunday Ski can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Sunday Ski 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sunday Ski 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 Sunday Ski to hire the very best people irrespective of their geographical location.
Threats Sunday River Ski Resort External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sunday River Ski Resort are -
Regulatory challenges
– Sunday Ski 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.
High dependence on third party suppliers
– Sunday Ski 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, Sunday Ski 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 Sunday River Ski Resort .
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 Sunday Ski business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Sunday Ski 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.
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. Sunday Ski can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Sunday Ski.
Shortening product life cycle
– it is one of the major threat that Sunday Ski is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Sunday Ski 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.
Environmental challenges
– Sunday Ski 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. Sunday Ski can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Sunday Ski
– 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 Sunday Ski.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sunday Ski with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Sunday Ski 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.
Weighted SWOT Analysis of Sunday River Ski 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 Sunday River Ski 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 Sunday River Ski 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 Sunday River Ski 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 Sunday River Ski 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 Sunday Ski needs to make to build a sustainable competitive advantage.