SWOT Analysis / TOWS Matrix for Event Hospitality (Australia)
Based on various researches at Oak Spring University , Event Hospitality is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, wage bills are increasing, increasing energy prices, geopolitical disruptions,
talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Event Hospitality
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Event Hospitality can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Event Hospitality, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Event Hospitality 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 Event Hospitality can be done for the following purposes –
1. Strategic planning of Event Hospitality
2. Improving business portfolio management of Event Hospitality
3. Assessing feasibility of the new initiative in Australia
4. Making a Hotels & Motels sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Event Hospitality
Strengths of Event Hospitality | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Event Hospitality are -
Sustainable margins compare to other players in Hotels & Motels industry
– Event Hospitality has clearly differentiated products in the market place. This has enabled Event Hospitality to fetch slight price premium compare to the competitors in the Hotels & Motels industry. The sustainable margins have also helped Event Hospitality to invest into research and development (R&D) and innovation.
Innovation driven organization
– Event Hospitality is one of the most innovative firm in Hotels & Motels sector.
Ability to recruit top talent
– Event Hospitality is one of the leading players in the Hotels & Motels industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Event Hospitality in the Services sector have low bargaining power. Event Hospitality has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Event Hospitality to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Event Hospitality
– The covid-19 pandemic has put organizational resilience at the centre of everthing Event Hospitality does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Hotels & Motels industry
- digital transformation varies from industry to industry. For Event Hospitality digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Event Hospitality 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
- Event Hospitality 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 Event Hospitality is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Event Hospitality emphasize – knowledge, initiative, and innovation.
Training and development
– Event Hospitality has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Event Hospitality 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
– Event Hospitality has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Event Hospitality to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Hotels & Motels
– Event Hospitality is one of the leading players in the Hotels & Motels industry in Australia. Over the years it has not only transformed the business landscape in the Hotels & Motels industry in Australia but also across the existing markets. The ability to lead change has enabled Event Hospitality in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Event Hospitality has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Event Hospitality 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.
Weaknesses of Event Hospitality | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Event Hospitality are -
Compensation and incentives
– The revenue per employee of Event Hospitality is just above the Hotels & Motels industry average. It 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 at Event Hospitality, in the dynamic environment of Hotels & Motels industry it has struggled to respond to the nimble upstart competition. Event Hospitality has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Australia, Event Hospitality needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Event Hospitality ‘s star products
– The top 2 products and services of Event Hospitality still accounts for major business revenue. This dependence on star products in Hotels & Motels industry has resulted into insufficient focus on developing new products, even though Event Hospitality has relatively successful track record of launching new products.
Employees’ less understanding of Event Hospitality strategy
– From the outside it seems that the employees of Event Hospitality 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.
Interest costs
– Compare to the competition, Event Hospitality 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.
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 Event Hospitality supply chain. Even after few cautionary changes, Event Hospitality is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Event Hospitality vulnerable to further global disruptions in South East Asia.
Skills based hiring in Hotels & Motels industry
– The stress on hiring functional specialists at Event Hospitality 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.
Workers concerns about automation
– As automation is fast increasing in the Hotels & Motels industry, Event Hospitality 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.
High operating costs
– Compare to the competitors, Event Hospitality has high operating costs in the Hotels & Motels industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Event Hospitality lucrative customers.
Lack of clear differentiation of Event Hospitality products
– To increase the profitability and margins on the products, Event Hospitality needs to provide more differentiated products than what it is currently offering in the marketplace.
Event Hospitality Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Event Hospitality are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Event Hospitality can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Hotels & Motels industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Event Hospitality 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. Event Hospitality 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.
Buying journey improvements
– Event Hospitality can improve the customer journey of consumers in the Hotels & Motels industry by using analytics and artificial intelligence. It 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Event Hospitality 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 Event Hospitality to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Hotels & Motels industry, but it has also influenced the consumer preferences. Event Hospitality can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Event Hospitality 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Event Hospitality can use these opportunities to build new business models that can help the communities that Event Hospitality operates in. Secondly it can use opportunities from government spending in Hotels & Motels sector.
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. Event Hospitality can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Event Hospitality can develop new processes and procedures in Hotels & Motels 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.
Use of Bitcoin and other crypto currencies for transactions in Hotels & Motels industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Event Hospitality in the Hotels & Motels industry. Now Event Hospitality can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Event Hospitality to increase its market reach. Event Hospitality 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.
Leveraging digital technologies
– Event Hospitality 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.
Creating value in data economy
– The success of analytics program of Event Hospitality has opened avenues for new revenue streams for the organization in Hotels & Motels industry. This can help Event Hospitality to build a more holistic ecosystem for Event Hospitality products in the Hotels & Motels industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Event Hospitality External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Event Hospitality are -
Consumer confidence and its impact on Event Hospitality 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 Hotels & Motels industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Hotels & Motels industry are lowering. It can presents Event Hospitality with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Hotels & Motels sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Event Hospitality in Hotels & Motels industry. The Hotels & Motels 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.
Environmental challenges
– Event Hospitality 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. Event Hospitality can take advantage of this fund but it will also bring new competitors in the Hotels & Motels industry.
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 Event Hospitality in the Hotels & Motels sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Event Hospitality is facing in Hotels & Motels sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Event Hospitality.
Stagnating economy with rate increase
– Event Hospitality 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 Hotels & Motels industry.
Technology acceleration in Forth Industrial Revolution
– Event Hospitality has witnessed rapid integration of technology during Covid-19 in the Hotels & Motels industry. As one of the leading players in the industry, Event Hospitality needs to keep up with the evolution of technology in the Hotels & Motels 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.
Increasing wage structure of Event Hospitality
– 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 Event Hospitality.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Event Hospitality 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, Event Hospitality 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 Event Hospitality prominent markets.
Weighted SWOT Analysis of Event Hospitality Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Event Hospitality 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 Event Hospitality 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 Event Hospitality 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 Event Hospitality 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 Event Hospitality needs to make to build a sustainable competitive advantage.