Mandarin Oriental International Ltd (MOIL) SWOT Analysis / TOWS Matrix / MBA Resources
Hotels & Motels
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Mandarin Oriental International Ltd (Singapore)
Based on various researches at Oak Spring University , Mandarin Oriental International Ltd is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , increasing commodity prices, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, technology disruption, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Mandarin Oriental International Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Mandarin Oriental International Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mandarin Oriental International Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd can be done for the following purposes –
1. Strategic planning of Mandarin Oriental International Ltd
2. Improving business portfolio management of Mandarin Oriental International Ltd
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 Mandarin Oriental International Ltd
Strengths of Mandarin Oriental International Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mandarin Oriental International Ltd are -
Highly skilled collaborators
– Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Mandarin Oriental International Ltd emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Mandarin Oriental International Ltd in Hotels & Motels industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Mandarin Oriental International Ltd 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 brand equity
– Mandarin Oriental International Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mandarin Oriental International Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Mandarin Oriental International Ltd in the Services sector have low bargaining power. Mandarin Oriental International Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mandarin Oriental International Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Mandarin Oriental International Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mandarin Oriental International Ltd 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.
Analytics focus
– Mandarin Oriental International Ltd 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.
Strong track record of project management in the Hotels & Motels industry
– Mandarin Oriental International Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Mandarin Oriental International Ltd is one of the most innovative firm in Hotels & Motels sector.
Effective Research and Development (R&D)
– Mandarin Oriental International Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd 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.
Weaknesses of Mandarin Oriental International Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mandarin Oriental International Ltd are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mandarin Oriental International Ltd is slow explore the new channels of communication. These new channels of communication can help Mandarin Oriental International Ltd to provide better information regarding Hotels & Motels products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Mandarin Oriental International Ltd has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the Hotels & Motels industry, Mandarin Oriental International Ltd 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 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 Mandarin Oriental International Ltd supply chain. Even after few cautionary changes, Mandarin Oriental International Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mandarin Oriental International Ltd vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd can leverage the sales team experience to cultivate customer relationships as Mandarin Oriental International Ltd is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of Mandarin Oriental International Ltd, 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.
Skills based hiring in Hotels & Motels industry
– The stress on hiring functional specialists at Mandarin Oriental International Ltd 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.
Capital Spending Reduction
– Even during the low interest decade, Mandarin Oriental International Ltd 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.
Interest costs
– Compare to the competition, Mandarin Oriental International Ltd 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.
Ability to respond to the competition
– As the decision making is very deliberative at Mandarin Oriental International Ltd, in the dynamic environment of Hotels & Motels industry it has struggled to respond to the nimble upstart competition. Mandarin Oriental International Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Hotels & Motels industry
– because of the regulatory requirements in Singapore, Mandarin Oriental International Ltd 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.
Mandarin Oriental International Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Mandarin Oriental International Ltd are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mandarin Oriental International Ltd can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Mandarin Oriental International Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Mandarin Oriental International Ltd has opened avenues for new revenue streams for the organization in Hotels & Motels industry. This can help Mandarin Oriental International Ltd to build a more holistic ecosystem for Mandarin Oriental International Ltd products in the Hotels & Motels industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Mandarin Oriental International Ltd 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.
Leveraging digital technologies
– Mandarin Oriental International Ltd 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.
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. Mandarin Oriental International Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Mandarin Oriental International Ltd 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.
Better consumer reach
– The expansion of the 5G network will help Mandarin Oriental International Ltd to increase its market reach. Mandarin Oriental International Ltd 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.
Buying journey improvements
– Mandarin Oriental International Ltd 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.
Learning at scale
– Online learning technologies has now opened space for Mandarin Oriental International Ltd 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.
Using analytics as competitive advantage
– Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mandarin Oriental International Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Mandarin Oriental International Ltd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mandarin Oriental International Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Mandarin Oriental International Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Mandarin Oriental International Ltd are -
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 Mandarin Oriental International Ltd in the Hotels & Motels sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd prominent markets.
Regulatory challenges
– Mandarin Oriental International Ltd 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.
Increasing wage structure of Mandarin Oriental International Ltd
– 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 Mandarin Oriental International Ltd.
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. Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd 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.
Shortening product life cycle
– it is one of the major threat that Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Hotels & Motels sector.
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. Mandarin Oriental International Ltd 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.
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 Mandarin Oriental International Ltd.
High dependence on third party suppliers
– Mandarin Oriental International Ltd 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mandarin Oriental International Ltd 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.
Technology acceleration in Forth Industrial Revolution
– Mandarin Oriental International Ltd has witnessed rapid integration of technology during Covid-19 in the Hotels & Motels industry. As one of the leading players in the industry, Mandarin Oriental International Ltd 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.
Weighted SWOT Analysis of Mandarin Oriental International Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd 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 Mandarin Oriental International Ltd needs to make to build a sustainable competitive advantage.
