Cold Opportunity (B): The ICEHOTEL Story SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cold Opportunity (B): The ICEHOTEL Story
Suitable for MBA and executive learners, this case series presents an engaging narrative that prompts students to discuss entrepreneurial thinking. An entrepreneur who loves his native Swedish Lapland uses his natural gift for effectuation to ask What? What next? And What now? As his ventures evolve, students begin to ask themselves how they would master similar challenges to their own entrepreneurial plans and expectations. The case can be taught in either one or two sessions of a 90-minute MBA course or a four-hour executive education class. An effective complement is the technical note entitled, "What Makes Entrepreneurs Entrepreneurial" (UV1356).
Swot Analysis of "Cold Opportunity (B): The ICEHOTEL Story" written by Saras Sarasvathy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Entrepreneurial Icehotel facing as an external strategic factors. Some of the topics covered in Cold Opportunity (B): The ICEHOTEL Story case study are - Strategic Management Strategies, Innovation and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Cold Opportunity (B): The ICEHOTEL Story casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, wage bills are increasing, cloud computing is disrupting traditional business models,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc
Introduction to SWOT Analysis of Cold Opportunity (B): The ICEHOTEL Story
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cold Opportunity (B): The ICEHOTEL Story case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Entrepreneurial Icehotel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Entrepreneurial Icehotel 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 Cold Opportunity (B): The ICEHOTEL Story can be done for the following purposes –
1. Strategic planning using facts provided in Cold Opportunity (B): The ICEHOTEL Story case study
2. Improving business portfolio management of Entrepreneurial Icehotel
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 Entrepreneurial Icehotel
Strengths Cold Opportunity (B): The ICEHOTEL Story | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Entrepreneurial Icehotel in Cold Opportunity (B): The ICEHOTEL Story Harvard Business Review case study are -
High switching costs
– The high switching costs that Entrepreneurial Icehotel 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.
High brand equity
– Entrepreneurial Icehotel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Entrepreneurial Icehotel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Entrepreneurial Icehotel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Entrepreneurial Icehotel is one of the most innovative firm in sector. Manager in Cold Opportunity (B): The ICEHOTEL Story Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Entrepreneurial Icehotel 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 Cold Opportunity (B): The ICEHOTEL Story - 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 Cold Opportunity (B): The ICEHOTEL Story 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.
Low bargaining power of suppliers
– Suppliers of Entrepreneurial Icehotel in the sector have low bargaining power. Cold Opportunity (B): The ICEHOTEL Story has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Entrepreneurial Icehotel to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Entrepreneurial Icehotel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Entrepreneurial Icehotel 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.
Highly skilled collaborators
– Entrepreneurial Icehotel 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 Cold Opportunity (B): The ICEHOTEL Story 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 Innovation & Entrepreneurship industry
– Cold Opportunity (B): The ICEHOTEL Story firm has clearly differentiated products in the market place. This has enabled Entrepreneurial Icehotel to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Entrepreneurial Icehotel to invest into research and development (R&D) and innovation.
Strong track record of project management
– Entrepreneurial Icehotel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Entrepreneurial Icehotel 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 Saras Sarasvathy 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.
Weaknesses Cold Opportunity (B): The ICEHOTEL Story | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cold Opportunity (B): The ICEHOTEL Story are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cold Opportunity (B): The ICEHOTEL Story, it seems that the employees of Entrepreneurial Icehotel 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.
Capital Spending Reduction
– Even during the low interest decade, Entrepreneurial Icehotel 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.
Increasing silos among functional specialists
– The organizational structure of Entrepreneurial Icehotel is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Entrepreneurial Icehotel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Entrepreneurial Icehotel to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Cold Opportunity (B): The ICEHOTEL Story HBR case study mentions - Entrepreneurial Icehotel takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Entrepreneurial Icehotel 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.
Interest costs
– Compare to the competition, Entrepreneurial Icehotel 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 Entrepreneurial Icehotel products
– To increase the profitability and margins on the products, Entrepreneurial Icehotel needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Entrepreneurial Icehotel, firm in the HBR case study Cold Opportunity (B): The ICEHOTEL Story needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Entrepreneurial Icehotel 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.
Products dominated business model
– Even though Entrepreneurial Icehotel 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 - Cold Opportunity (B): The ICEHOTEL Story should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cold Opportunity (B): The ICEHOTEL Story, is just above the industry average. Entrepreneurial Icehotel 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.
Opportunities Cold Opportunity (B): The ICEHOTEL Story | 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 Cold Opportunity (B): The ICEHOTEL Story are -
Better consumer reach
– The expansion of the 5G network will help Entrepreneurial Icehotel to increase its market reach. Entrepreneurial Icehotel 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.
Learning at scale
– Online learning technologies has now opened space for Entrepreneurial Icehotel 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Entrepreneurial Icehotel 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.
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 Entrepreneurial Icehotel in the consumer business. Now Entrepreneurial Icehotel can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Entrepreneurial Icehotel 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, Cold Opportunity (B): The ICEHOTEL Story, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Entrepreneurial Icehotel 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.
Buying journey improvements
– Entrepreneurial Icehotel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cold Opportunity (B): The ICEHOTEL Story 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, Entrepreneurial Icehotel is facing challenges because of the dominance of functional experts in the organization. Cold Opportunity (B): The ICEHOTEL Story 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, Entrepreneurial Icehotel can use these opportunities to build new business models that can help the communities that Entrepreneurial Icehotel operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Building a culture of innovation
– managers at Entrepreneurial Icehotel 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.
Creating value in data economy
– The success of analytics program of Entrepreneurial Icehotel has opened avenues for new revenue streams for the organization in the industry. This can help Entrepreneurial Icehotel to build a more holistic ecosystem as suggested in the Cold Opportunity (B): The ICEHOTEL Story case study. Entrepreneurial Icehotel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Entrepreneurial Icehotel 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Entrepreneurial Icehotel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Cold Opportunity (B): The ICEHOTEL Story External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cold Opportunity (B): The ICEHOTEL Story are -
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.
Technology acceleration in Forth Industrial Revolution
– Entrepreneurial Icehotel has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Entrepreneurial Icehotel 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Entrepreneurial Icehotel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Entrepreneurial Icehotel 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.
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. Entrepreneurial Icehotel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Entrepreneurial Icehotel
– 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 Entrepreneurial Icehotel.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cold Opportunity (B): The ICEHOTEL Story, Entrepreneurial Icehotel 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 .
Consumer confidence and its impact on Entrepreneurial Icehotel 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.
Environmental challenges
– Entrepreneurial Icehotel 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. Entrepreneurial Icehotel can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Entrepreneurial Icehotel business can come under increasing regulations regarding data privacy, data security, etc.
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 Entrepreneurial Icehotel.
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 Entrepreneurial Icehotel in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of Cold Opportunity (B): The ICEHOTEL Story 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 Cold Opportunity (B): The ICEHOTEL Story 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 Cold Opportunity (B): The ICEHOTEL Story 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 Cold Opportunity (B): The ICEHOTEL Story 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 Cold Opportunity (B): The ICEHOTEL Story 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 Entrepreneurial Icehotel needs to make to build a sustainable competitive advantage.