Bali Hai Cruises: Creating Business Success in Indonesia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bali Hai Cruises: Creating Business Success in Indonesia
Bali Hai Cruises had grown from a start-up company in 1990 to become a thriving multimillion-dollar business in 2017 that employed 460 people on the Indonesian islands of Bali and Lembongan. This solid and consistent business development took place despite a business environment and government that had not always been friendly and positive toward foreign investors. What critical factors brought success to this tourism-based company in such a challenging market? What behaviours and strategies had Bali Hai Cruises followed to build trust, deliver on performance, and resolve challenges in developing this vertically integrated company? The company now faced new challenges in terms of an aging leadership and workforce, the continuing need to manage and maintain its working relationships with the Indonesian government and the harbour authorities, the rapidly developing information technology capacity of the marine tourism industry, and the potential of growing competition. What strategies could Bali Hai Cruises implement to continue its success and growth in 2018 and beyond? Stephen Grainger is affiliated with Yunnan University of Finance and Economics.
Swot Analysis of "Bali Hai Cruises: Creating Business Success in Indonesia" written by Stephen Grainger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bali Hai facing as an external strategic factors. Some of the topics covered in Bali Hai Cruises: Creating Business Success in Indonesia case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Bali Hai Cruises: Creating Business Success in Indonesia casestudy better are - – there is backlash against globalization, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China,
central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Bali Hai Cruises: Creating Business Success in Indonesia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bali Hai Cruises: Creating Business Success in Indonesia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bali Hai, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bali Hai 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 Bali Hai Cruises: Creating Business Success in Indonesia can be done for the following purposes –
1. Strategic planning using facts provided in Bali Hai Cruises: Creating Business Success in Indonesia case study
2. Improving business portfolio management of Bali Hai
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bali Hai
Strengths Bali Hai Cruises: Creating Business Success in Indonesia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bali Hai in Bali Hai Cruises: Creating Business Success in Indonesia Harvard Business Review case study are -
Highly skilled collaborators
– Bali Hai 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 Bali Hai Cruises: Creating Business Success in Indonesia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Bali Hai 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 Stephen Grainger 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.
Effective Research and Development (R&D)
– Bali Hai 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 Bali Hai Cruises: Creating Business Success in Indonesia - 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 Bali Hai Cruises: Creating Business Success in Indonesia 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.
Learning organization
- Bali Hai 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 Bali Hai is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bali Hai Cruises: Creating Business Success in Indonesia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Bali Hai is present in almost all the verticals within the industry. This has provided firm in Bali Hai Cruises: Creating Business Success in Indonesia 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.
Superior customer experience
– The customer experience strategy of Bali Hai 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
– Bali Hai has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bali Hai 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.
High brand equity
– Bali Hai has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bali Hai to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Bali Hai in the sector have low bargaining power. Bali Hai Cruises: Creating Business Success in Indonesia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bali Hai to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Bali Hai
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bali Hai does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Bali Hai digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bali Hai 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 Bali Hai Cruises: Creating Business Success in Indonesia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bali Hai Cruises: Creating Business Success in Indonesia are -
Low market penetration in new markets
– Outside its home market of Bali Hai, firm in the HBR case study Bali Hai Cruises: Creating Business Success in Indonesia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bali Hai is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bali Hai Cruises: Creating Business Success in Indonesia can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Bali Hai products
– To increase the profitability and margins on the products, Bali Hai needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Bali Hai 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Bali Hai Cruises: Creating Business Success in Indonesia 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 Bali Hai has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Bali Hai 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.
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 Bali Hai supply chain. Even after few cautionary changes mentioned in the HBR case study - Bali Hai Cruises: Creating Business Success in Indonesia, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bali Hai vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Bali Hai 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 - Bali Hai Cruises: Creating Business Success in Indonesia should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bali Hai Cruises: Creating Business Success in Indonesia, it seems that the employees of Bali Hai 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Bali Hai Cruises: Creating Business Success in Indonesia, is just above the industry average. Bali Hai 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Bali Hai Cruises: Creating Business Success in Indonesia, in the dynamic environment Bali Hai has struggled to respond to the nimble upstart competition. Bali Hai has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Bali Hai Cruises: Creating Business Success in Indonesia | 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 Bali Hai Cruises: Creating Business Success in Indonesia are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bali Hai 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, Bali Hai Cruises: Creating Business Success in Indonesia, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Bali Hai can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bali Hai Cruises: Creating Business Success in Indonesia 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bali Hai is facing challenges because of the dominance of functional experts in the organization. Bali Hai Cruises: Creating Business Success in Indonesia 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bali Hai 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. Bali Hai 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.
Using analytics as competitive advantage
– Bali Hai 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 Bali Hai Cruises: Creating Business Success in Indonesia - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bali Hai to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Bali Hai 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bali Hai can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bali Hai in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Bali Hai 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 Bali Hai can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bali Hai can use these opportunities to build new business models that can help the communities that Bali Hai operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Building a culture of innovation
– managers at Bali Hai 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 Innovation & Entrepreneurship segment.
Better consumer reach
– The expansion of the 5G network will help Bali Hai to increase its market reach. Bali Hai 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.
Threats Bali Hai Cruises: Creating Business Success in Indonesia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bali Hai Cruises: Creating Business Success in Indonesia are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bali Hai 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 Bali Hai Cruises: Creating Business Success in Indonesia .
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.
Technology acceleration in Forth Industrial Revolution
– Bali Hai has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Bali Hai needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Bali Hai 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bali Hai in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Bali Hai.
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.
Regulatory challenges
– Bali Hai 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 Innovation & Entrepreneurship industry regulations.
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. Bali Hai needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Bali Hai 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.
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 Bali Hai business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bali Hai can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bali Hai Cruises: Creating Business Success in Indonesia, Bali Hai may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Weighted SWOT Analysis of Bali Hai Cruises: Creating Business Success in Indonesia 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 Bali Hai Cruises: Creating Business Success in Indonesia 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 Bali Hai Cruises: Creating Business Success in Indonesia 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 Bali Hai Cruises: Creating Business Success in Indonesia 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 Bali Hai Cruises: Creating Business Success in Indonesia 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 Bali Hai needs to make to build a sustainable competitive advantage.
