Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry
Two soon-to-be MBA graduates are considering a business opportunity in the boutique hotel industry. Having found a seemingly attractive property in Savannah, Georgia, Yvonne D'Arcy and Elisabeth Whiting face questions about career issues, planning, financing, and the possibility of unequal power dynamics. Students assess the merits of the proposed project, as well as the overall attractiveness of the boutique hotel industry and the career opportunity it presents. Exhibits include a Letter of Agreement between D'Arcy and Whiting, the hotel's historical performance data, lodging statistics for the Savannah market, and the project budget. An associated case, "Hotel Vertu: Financing the Venture in the Boutique Hotel Industry" (#917505), overlaps with this case, but delves into the issues around financial forecasts, financial returns, deal structure, equity splits, and the power dynamic between investors and entrepreneurs. Although each case can be taught on its own (i.e., students do not require data or knowledge from one case in order to benefit fully from the other), the two can be paired in order to give students a more complete sense of the challenges that aspiring entrepreneurs may face. If both cases are taught, it is recommended that instructors begin with "Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry."
Authors :: Howard H. Stevenson, Michael J. Roberts
Swot Analysis of "Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry" written by Howard H. Stevenson, Michael J. Roberts includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hotel Boutique facing as an external strategic factors. Some of the topics covered in Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry case study are - Strategic Management Strategies, Entrepreneurship, Joint ventures, Negotiations, Strategic planning and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry casestudy better are - – wage bills are increasing, geopolitical disruptions, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing energy prices, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hotel Boutique, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hotel Boutique 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 Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry can be done for the following purposes –
1. Strategic planning using facts provided in Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry case study
2. Improving business portfolio management of Hotel Boutique
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 Hotel Boutique
Strengths Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hotel Boutique in Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Hotel Boutique in the sector have low bargaining power. Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hotel Boutique to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Hotel Boutique is one of the most innovative firm in sector. Manager in Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Hotel Boutique 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
– Hotel Boutique has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hotel Boutique to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Hotel Boutique are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry firm has clearly differentiated products in the market place. This has enabled Hotel Boutique to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Hotel Boutique to invest into research and development (R&D) and innovation.
Analytics focus
– Hotel Boutique 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 Howard H. Stevenson, Michael J. Roberts 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Hotel Boutique digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hotel Boutique 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.
Ability to lead change in Innovation & Entrepreneurship field
– Hotel Boutique 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 Hotel Boutique in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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.
Successful track record of launching new products
– Hotel Boutique has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hotel Boutique 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.
Diverse revenue streams
– Hotel Boutique is present in almost all the verticals within the industry. This has provided firm in Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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.
Weaknesses Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry are -
Low market penetration in new markets
– Outside its home market of Hotel Boutique, firm in the HBR case study Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry, it seems that the employees of Hotel Boutique 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hotel Boutique is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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 Hotel Boutique has relatively successful track record of launching new products.
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 Hotel Boutique supply chain. Even after few cautionary changes mentioned in the HBR case study - Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hotel Boutique vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Hotel Boutique 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hotel Boutique 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.
Aligning sales with marketing
– It come across in the case study Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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 Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry can leverage the sales team experience to cultivate customer relationships as Hotel Boutique is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry, in the dynamic environment Hotel Boutique has struggled to respond to the nimble upstart competition. Hotel Boutique has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry, is just above the industry average. Hotel Boutique 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 Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry | 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 Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry are -
Learning at scale
– Online learning technologies has now opened space for Hotel Boutique 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.
Manufacturing automation
– Hotel Boutique can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
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. Hotel Boutique can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Hotel Boutique 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.
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 Hotel Boutique 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.
Loyalty marketing
– Hotel Boutique 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.
Developing new processes and practices
– Hotel Boutique can develop new processes and procedures in Innovation & Entrepreneurship 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.
Better consumer reach
– The expansion of the 5G network will help Hotel Boutique to increase its market reach. Hotel Boutique 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.
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. Hotel Boutique can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hotel Boutique 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 Hotel Boutique in the consumer business. Now Hotel Boutique can target international markets with far fewer capital restrictions requirements than the existing system.
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. Hotel Boutique 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. Hotel Boutique 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hotel Boutique is facing challenges because of the dominance of functional experts in the organization. Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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.
Threats Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry are -
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. Hotel Boutique 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.
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. Hotel Boutique needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Hotel Boutique business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hotel Boutique 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.
Increasing wage structure of Hotel Boutique
– 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 Hotel Boutique.
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.
Stagnating economy with rate increase
– Hotel Boutique 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hotel Boutique 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 Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry .
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. Hotel Boutique will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hotel Boutique with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Hotel Boutique in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Environmental challenges
– Hotel Boutique 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. Hotel Boutique can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Weighted SWOT Analysis of Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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 Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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 Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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 Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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 Hotel Vertu: Analyzing the Opportunity in the Boutique Hotel Industry 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 Hotel Boutique needs to make to build a sustainable competitive advantage.
