Shangri-La Asia (SHNG) SWOT Analysis / TOWS Matrix / MBA Resources
Hotels & Motels
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shangri-La Asia (Singapore)
Based on various researches at Oak Spring University , Shangri-La Asia is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, increasing commodity prices, there is backlash against globalization, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shangri-La Asia can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shangri-La Asia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shangri-La Asia 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 Asia can be done for the following purposes –
1. Strategic planning of Shangri-La Asia
2. Improving business portfolio management of Shangri-La Asia
3. Assessing feasibility of the new initiative in Singapore
4. Making a Hotels & Motels sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shangri-La Asia
Strengths of Shangri-La Asia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shangri-La Asia are -
Superior customer experience
– The customer experience strategy of Shangri-La Asia in Hotels & Motels industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Shangri-La Asia
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shangri-La Asia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Shangri-La Asia 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 Asia have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Shangri-La Asia is one of the most innovative firm in Hotels & Motels sector.
Diverse revenue streams
– Shangri-La Asia is present in almost all the verticals within the Hotels & Motels industry. This has provided Shangri-La Asia 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.
Successful track record of launching new products
– Shangri-La Asia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shangri-La Asia 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.
Effective Research and Development (R&D)
– Shangri-La Asia has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shangri-La Asia 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.
High switching costs
– The high switching costs that Shangri-La Asia 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.
Low bargaining power of suppliers
– Suppliers of Shangri-La Asia in the Services sector have low bargaining power. Shangri-La Asia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shangri-La Asia to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Shangri-La Asia is one of the leading players in the Hotels & Motels industry in Singapore. It is in a position to attract the best talent available in Singapore. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Shangri-La Asia 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 Hotels & Motels industry. The technology infrastructure of Singapore is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Hotels & Motels
– Shangri-La Asia is one of the leading players in the Hotels & Motels industry in Singapore. Over the years it has not only transformed the business landscape in the Hotels & Motels industry in Singapore but also across the existing markets. The ability to lead change has enabled Shangri-La Asia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Shangri-La Asia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shangri-La Asia are -
Lack of clear differentiation of Shangri-La Asia products
– To increase the profitability and margins on the products, Shangri-La Asia needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of Shangri-La Asia, it seems that company is thinking out the frontier risks that can impact Hotels & Motels industry. 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.
Capital Spending Reduction
– Even during the low interest decade, Shangri-La Asia 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.
Need for greater diversity
– Shangri-La Asia 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.
Skills based hiring in Hotels & Motels industry
– The stress on hiring functional specialists at Shangri-La Asia 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shangri-La Asia is slow explore the new channels of communication. These new channels of communication can help Shangri-La Asia to provide better information regarding Hotels & Motels products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of Shangri-La Asia 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, Shangri-La Asia 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 Asia 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.
Aligning sales with marketing
– From the outside it seems that Shangri-La Asia 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 Asia can leverage the sales team experience to cultivate customer relationships as Shangri-La Asia is planning to shift buying processes online.
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 Asia supply chain. Even after few cautionary changes, Shangri-La Asia is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shangri-La Asia vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Shangri-La Asia 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 Shangri-La Asia lucrative customers.
Shangri-La Asia Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shangri-La Asia are -
Learning at scale
– Online learning technologies has now opened space for Shangri-La Asia to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shangri-La Asia 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shangri-La Asia is facing challenges because of the dominance of functional experts in the organization. Shangri-La Asia 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.
Developing new processes and practices
– Shangri-La Asia 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shangri-La Asia can use these opportunities to build new business models that can help the communities that Shangri-La Asia operates in. Secondly it can use opportunities from government spending in Hotels & Motels sector.
Buying journey improvements
– Shangri-La Asia 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.
Better consumer reach
– The expansion of the 5G network will help Shangri-La Asia to increase its market reach. Shangri-La Asia 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.
Creating value in data economy
– The success of analytics program of Shangri-La Asia has opened avenues for new revenue streams for the organization in Hotels & Motels industry. This can help Shangri-La Asia to build a more holistic ecosystem for Shangri-La Asia products in the Hotels & Motels industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. Shangri-La Asia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shangri-La Asia 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 Asia to hire the very best people irrespective of their geographical location.
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 Asia in the Hotels & Motels industry. Now Shangri-La Asia can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Shangri-La Asia 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.
Leveraging digital technologies
– Shangri-La Asia 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.
Threats Shangri-La Asia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shangri-La Asia are -
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 Asia 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.
High dependence on third party suppliers
– Shangri-La Asia 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.
Technology acceleration in Forth Industrial Revolution
– Shangri-La Asia 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 Asia 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Hotels & Motels industry are lowering. It can presents Shangri-La Asia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Hotels & Motels sector.
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. Shangri-La Asia needs to understand the core reasons impacting the Hotels & Motels industry. This will help it in building a better workplace.
Consumer confidence and its impact on Shangri-La Asia 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.
Increasing wage structure of Shangri-La Asia
– 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 Asia.
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.
Stagnating economy with rate increase
– Shangri-La Asia 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shangri-La Asia 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 Asia prominent markets.
Regulatory challenges
– Shangri-La Asia 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shangri-La Asia 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
– Shangri-La Asia 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. Shangri-La Asia can take advantage of this fund but it will also bring new competitors in the Hotels & Motels industry.
Weighted SWOT Analysis of Shangri-La Asia Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shangri-La Asia 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 Asia 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 Asia 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 Asia 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 Asia needs to make to build a sustainable competitive advantage.