SWOT Analysis / TOWS Matrix for NH Hoteles (United Kingdom)
Based on various researches at Oak Spring University , NH Hoteles is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, wage bills are increasing, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices,
digital marketing is dominated by two big players Facebook and Google, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NH Hoteles can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NH Hoteles, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NH Hoteles 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 NH Hoteles can be done for the following purposes –
1. Strategic planning of NH Hoteles
2. Improving business portfolio management of NH Hoteles
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Hotels & Motels sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of NH Hoteles
Strengths of NH Hoteles | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of NH Hoteles are -
Low bargaining power of suppliers
– Suppliers of NH Hoteles in the Services sector have low bargaining power. NH Hoteles has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NH Hoteles to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of NH Hoteles
– The covid-19 pandemic has put organizational resilience at the centre of everthing NH Hoteles does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the NH Hoteles 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.
Innovation driven organization
– NH Hoteles is one of the most innovative firm in Hotels & Motels sector.
Strong track record of project management in the Hotels & Motels industry
– NH Hoteles is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– NH Hoteles has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Hotels & Motels industry. Secondly the value chain collaborators of NH Hoteles have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Hotels & Motels
– NH Hoteles is one of the leading players in the Hotels & Motels industry in United Kingdom. Over the years it has not only transformed the business landscape in the Hotels & Motels industry in United Kingdom but also across the existing markets. The ability to lead change has enabled NH Hoteles in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- NH Hoteles 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 NH Hoteles is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at NH Hoteles emphasize – knowledge, initiative, and innovation.
Digital Transformation in Hotels & Motels industry
- digital transformation varies from industry to industry. For NH Hoteles digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. NH Hoteles 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 recruit top talent
– NH Hoteles is one of the leading players in the Hotels & Motels industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– NH Hoteles has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. NH Hoteles 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
– NH Hoteles has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled NH Hoteles to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of NH Hoteles | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NH Hoteles are -
Low market penetration in new markets
– Outside its home market of United Kingdom, NH Hoteles needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that NH Hoteles needs to have more collaboration between its sales team and marketing team. Sales professionals in the Hotels & Motels industry have deep experience in developing customer relationships. Marketing department at NH Hoteles can leverage the sales team experience to cultivate customer relationships as NH Hoteles is planning to shift buying processes online.
Employees’ less understanding of NH Hoteles strategy
– From the outside it seems that the employees of NH Hoteles 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 of NH Hoteles 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.
Slow decision making process
– As mentioned earlier in the report, NH Hoteles has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Hotels & Motels industry over the last five years. NH Hoteles even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
NH Hoteles has a high cash cycle compare to other players in the Hotels & Motels industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of NH Hoteles is dominated by functional specialists. It is not different from other players in the Hotels & Motels industry, but NH Hoteles needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help NH Hoteles to focus more on services in the Hotels & Motels industry rather than just following the product oriented approach.
Lack of clear differentiation of NH Hoteles products
– To increase the profitability and margins on the products, NH Hoteles needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on NH Hoteles ‘s star products
– The top 2 products and services of NH Hoteles 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 NH Hoteles has relatively successful track record of launching new products.
High bargaining power of channel partners in Hotels & Motels industry
– because of the regulatory requirements in United Kingdom, NH Hoteles is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Hotels & Motels industry.
Need for greater diversity
– NH Hoteles 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.
NH Hoteles Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of NH Hoteles are -
Manufacturing automation
– NH Hoteles can use the latest technology developments to improve its manufacturing and designing process in Hotels & Motels sector. 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.
Creating value in data economy
– The success of analytics program of NH Hoteles has opened avenues for new revenue streams for the organization in Hotels & Motels industry. This can help NH Hoteles to build a more holistic ecosystem for NH Hoteles products in the Hotels & Motels industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at NH Hoteles 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 Hotels & Motels industry.
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. NH Hoteles can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. NH Hoteles 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. NH Hoteles 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
– NH Hoteles 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.
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 NH Hoteles in the Hotels & Motels industry. Now NH Hoteles can target international markets with far fewer capital restrictions requirements than the existing system.
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. NH Hoteles can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– NH Hoteles 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for NH Hoteles in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Hotels & Motels industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– NH Hoteles can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for NH Hoteles 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 NH Hoteles to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, NH Hoteles can use these opportunities to build new business models that can help the communities that NH Hoteles operates in. Secondly it can use opportunities from government spending in Hotels & Motels sector.
Threats NH Hoteles External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of NH Hoteles are -
Shortening product life cycle
– it is one of the major threat that NH Hoteles is facing in Hotels & Motels sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, NH Hoteles 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 NH Hoteles prominent markets.
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 NH Hoteles in the Hotels & Motels sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– NH Hoteles 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.
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. NH Hoteles 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.
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.
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 NH Hoteles.
Consumer confidence and its impact on NH Hoteles 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.
High dependence on third party suppliers
– NH Hoteles 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.
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 NH Hoteles business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Hotels & Motels industry are lowering. It can presents NH Hoteles with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Hotels & Motels sector.
Regulatory challenges
– NH Hoteles 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 Hotels & Motels 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. NH Hoteles needs to understand the core reasons impacting the Hotels & Motels industry. This will help it in building a better workplace.
Weighted SWOT Analysis of NH Hoteles Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NH Hoteles 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 NH Hoteles 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 NH Hoteles 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 NH Hoteles 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 NH Hoteles needs to make to build a sustainable competitive advantage.