Shangri La Hotels Malaysia (SHGM) SWOT Analysis / TOWS Matrix / MBA Resources
Hotels & Motels
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shangri La Hotels Malaysia (Malaysia)
Based on various researches at Oak Spring University , Shangri La Hotels Malaysia is operating in a macro-environment that has been destablized by – increasing commodity prices, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion,
increasing government debt because of Covid-19 spendings, technology disruption, etc
Introduction to SWOT Analysis of Shangri La Hotels Malaysia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shangri La Hotels Malaysia can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shangri La Hotels Malaysia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia can be done for the following purposes –
1. Strategic planning of Shangri La Hotels Malaysia
2. Improving business portfolio management of Shangri La Hotels Malaysia
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Hotels & Motels sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shangri La Hotels Malaysia
Strengths of Shangri La Hotels Malaysia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shangri La Hotels Malaysia are -
Highly skilled collaborators
– Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Hotels & Motels industry
- digital transformation varies from industry to industry. For Shangri La Hotels Malaysia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shangri La Hotels Malaysia 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
- Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shangri La Hotels Malaysia emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Shangri La Hotels Malaysia is one of the leading players in the Hotels & Motels industry in Malaysia. It is in a position to attract the best talent available in Malaysia. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Hotels & Motels
– Shangri La Hotels Malaysia is one of the leading players in the Hotels & Motels industry in Malaysia. Over the years it has not only transformed the business landscape in the Hotels & Motels industry in Malaysia but also across the existing markets. The ability to lead change has enabled Shangri La Hotels Malaysia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Hotels & Motels industry
– Shangri La Hotels Malaysia has clearly differentiated products in the market place. This has enabled Shangri La Hotels Malaysia to fetch slight price premium compare to the competitors in the Hotels & Motels industry. The sustainable margins have also helped Shangri La Hotels Malaysia to invest into research and development (R&D) and innovation.
Organizational Resilience of Shangri La Hotels Malaysia
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shangri La Hotels Malaysia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Shangri La Hotels Malaysia comprises – understanding the underlying the factors in the Hotels & Motels 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.
Effective Research and Development (R&D)
– Shangri La Hotels Malaysia has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shangri La Hotels Malaysia staying ahead in the Hotels & Motels industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Shangri La Hotels Malaysia 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.
Innovation driven organization
– Shangri La Hotels Malaysia is one of the most innovative firm in Hotels & Motels sector.
High brand equity
– Shangri La Hotels Malaysia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shangri La Hotels Malaysia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Shangri La Hotels Malaysia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shangri La Hotels Malaysia are -
Ability to respond to the competition
– As the decision making is very deliberative at Shangri La Hotels Malaysia, in the dynamic environment of Hotels & Motels industry it has struggled to respond to the nimble upstart competition. Shangri La Hotels Malaysia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Shangri La Hotels Malaysia 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 Hotels & Motels industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia can leverage the sales team experience to cultivate customer relationships as Shangri La Hotels Malaysia is planning to shift buying processes online.
Products dominated business model
– Even though Shangri La Hotels Malaysia has some of the most successful models in the Hotels & Motels industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shangri La Hotels Malaysia should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Shangri La Hotels Malaysia is dominated by functional specialists. It is not different from other players in the Hotels & Motels industry, but Shangri La Hotels Malaysia needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shangri La Hotels Malaysia to focus more on services in the Hotels & Motels industry rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Shangri La Hotels Malaysia supply chain. Even after few cautionary changes, Shangri La Hotels Malaysia is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shangri La Hotels Malaysia vulnerable to further global disruptions in South East Asia.
High dependence on Shangri La Hotels Malaysia ‘s star products
– The top 2 products and services of Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia 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 Malaysia, Shangri La Hotels Malaysia 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.
Slow decision making process
– As mentioned earlier in the report, Shangri La Hotels Malaysia 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. Shangri La Hotels Malaysia 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.
Need for greater diversity
– Shangri La Hotels Malaysia 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shangri La Hotels Malaysia is slow explore the new channels of communication. These new channels of communication can help Shangri La Hotels Malaysia to provide better information regarding Hotels & Motels products and services. It can also build an online community to further reach out to potential customers.
Shangri La Hotels Malaysia Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shangri La Hotels Malaysia are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Shangri La Hotels Malaysia 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.
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. Shangri La Hotels Malaysia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Shangri La Hotels Malaysia has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Hotels & Motels sector. This continuous investment in analytics has enabled Shangri La Hotels Malaysia to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shangri La Hotels Malaysia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Shangri La Hotels Malaysia in the Hotels & Motels industry. Now Shangri La Hotels Malaysia can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shangri La Hotels Malaysia is facing challenges because of the dominance of functional experts in the organization. Shangri La Hotels Malaysia can utilize new technology in the field of Hotels & Motels industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Shangri La Hotels Malaysia 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.
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 Shangri La Hotels Malaysia 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Shangri La Hotels Malaysia has opened avenues for new revenue streams for the organization in Hotels & Motels industry. This can help Shangri La Hotels Malaysia to build a more holistic ecosystem for Shangri La Hotels Malaysia products in the Hotels & Motels industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Shangri La Hotels Malaysia to increase its market reach. Shangri La Hotels Malaysia 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.
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. Shangri La Hotels Malaysia 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. Shangri La Hotels Malaysia 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.
Leveraging digital technologies
– Shangri La Hotels Malaysia 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.
Loyalty marketing
– Shangri La Hotels Malaysia 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.
Threats Shangri La Hotels Malaysia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shangri La Hotels Malaysia are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shangri La Hotels Malaysia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Hotels & Motels sector.
Stagnating economy with rate increase
– Shangri La Hotels Malaysia 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. Shangri La Hotels Malaysia 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.
Increasing wage structure of Shangri La Hotels Malaysia
– 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 Shangri La Hotels Malaysia.
Shortening product life cycle
– it is one of the major threat that Shangri La Hotels Malaysia is facing in Hotels & Motels sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Hotels & Motels industry are lowering. It can presents Shangri La Hotels Malaysia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Hotels & Motels sector.
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 Shangri La Hotels Malaysia business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Hotels & Motels industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shangri La Hotels Malaysia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Shangri La Hotels Malaysia 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.
Technology acceleration in Forth Industrial Revolution
– Shangri La Hotels Malaysia has witnessed rapid integration of technology during Covid-19 in the Hotels & Motels industry. As one of the leading players in the industry, Shangri La Hotels Malaysia 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.
High dependence on third party suppliers
– Shangri La Hotels Malaysia 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia prominent markets.
Weighted SWOT Analysis of Shangri La Hotels Malaysia Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia 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 Shangri La Hotels Malaysia needs to make to build a sustainable competitive advantage.