Hersha Hospitality Pref E (HT_pe) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Hersha Hospitality Pref E (United States)

Based on various researches at Oak Spring University , Hersha Hospitality Pref E is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, wage bills are increasing, central banks are concerned over increasing inflation, there is backlash against globalization, challanges to central banks by blockchain based private currencies, technology disruption, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of Hersha Hospitality Pref E

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hersha Hospitality Pref E can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hersha Hospitality Pref E, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hersha Hospitality Pref E 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Hersha Hospitality Pref E can be done for the following purposes –
1. Strategic planning of Hersha Hospitality Pref E
2. Improving business portfolio management of Hersha Hospitality Pref E
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hersha Hospitality Pref E

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Strengths of Hersha Hospitality Pref E | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Hersha Hospitality Pref E are -

Strong track record of project management in the industry

– Hersha Hospitality Pref E is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Superior customer experience

– The customer experience strategy of Hersha Hospitality Pref E in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Successful track record of launching new products

– Hersha Hospitality Pref E has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hersha Hospitality Pref E 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.

Sustainable margins compare to other players in industry

– Hersha Hospitality Pref E has clearly differentiated products in the market place. This has enabled Hersha Hospitality Pref E to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Hersha Hospitality Pref E to invest into research and development (R&D) and innovation.

Low bargaining power of suppliers

– Suppliers of Hersha Hospitality Pref E in the sector have low bargaining power. Hersha Hospitality Pref E has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hersha Hospitality Pref E to manage not only supply disruptions but also source products at highly competitive prices.

Ability to lead change in

– Hersha Hospitality Pref E is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled Hersha Hospitality Pref E in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High switching costs

– The high switching costs that Hersha Hospitality Pref E 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.

Operational resilience

– The operational resilience strategy of Hersha Hospitality Pref E comprises – understanding the underlying the factors in the 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.

Cross disciplinary teams

– Horizontal connected teams at the Hersha Hospitality Pref E 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.

Learning organization

- Hersha Hospitality Pref E 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 Hersha Hospitality Pref E is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hersha Hospitality Pref E emphasize – knowledge, initiative, and innovation.

High brand equity

– Hersha Hospitality Pref E has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hersha Hospitality Pref E to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Diverse revenue streams

– Hersha Hospitality Pref E is present in almost all the verticals within the industry. This has provided Hersha Hospitality Pref E 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.

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Weaknesses of Hersha Hospitality Pref E | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Hersha Hospitality Pref E are -

Skills based hiring in industry

– The stress on hiring functional specialists at Hersha Hospitality Pref E 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.

Aligning sales with marketing

– From the outside it seems that Hersha Hospitality Pref E needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Hersha Hospitality Pref E can leverage the sales team experience to cultivate customer relationships as Hersha Hospitality Pref E is planning to shift buying processes online.

No frontier risks strategy

– From the 10K / annual statement of Hersha Hospitality Pref E, it seems that company is thinking out the frontier risks that can impact 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.

Interest costs

– Compare to the competition, Hersha Hospitality Pref E has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

High dependence on Hersha Hospitality Pref E ‘s star products

– The top 2 products and services of Hersha Hospitality Pref E still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Hersha Hospitality Pref E has relatively successful track record of launching new products.

Increasing silos among functional specialists

– The organizational structure of Hersha Hospitality Pref E is dominated by functional specialists. It is not different from other players in the industry, but Hersha Hospitality Pref E needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hersha Hospitality Pref E to focus more on services in the industry rather than just following the product oriented approach.

Low market penetration in new markets

– Outside its home market of United States, Hersha Hospitality Pref E needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Capital Spending Reduction

– Even during the low interest decade, Hersha Hospitality Pref E 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 industry using digital technology.

High bargaining power of channel partners in industry

– because of the regulatory requirements in United States, Hersha Hospitality Pref E 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 industry.

Workers concerns about automation

– As automation is fast increasing in the industry, Hersha Hospitality Pref E 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.

Slow to strategic competitive environment developments

– As Hersha Hospitality Pref E is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

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Hersha Hospitality Pref E Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Hersha Hospitality Pref E are -

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. Hersha Hospitality Pref E can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Better consumer reach

– The expansion of the 5G network will help Hersha Hospitality Pref E to increase its market reach. Hersha Hospitality Pref E 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.

Building a culture of innovation

– managers at Hersha Hospitality Pref E 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 industry.

Developing new processes and practices

– Hersha Hospitality Pref E can develop new processes and procedures in 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.

Buying journey improvements

– Hersha Hospitality Pref E can improve the customer journey of consumers in the 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.

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 Hersha Hospitality Pref E 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Hersha Hospitality Pref E 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.

Use of Bitcoin and other crypto currencies for transactions in industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hersha Hospitality Pref E in the industry. Now Hersha Hospitality Pref E can target international markets with far fewer capital restrictions requirements than the existing system.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Hersha Hospitality Pref E 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 Hersha Hospitality Pref E to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hersha Hospitality Pref E 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. Hersha Hospitality Pref E 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.

Manufacturing automation

– Hersha Hospitality Pref E can use the latest technology developments to improve its manufacturing and designing process in 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

– Hersha Hospitality Pref E 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hersha Hospitality Pref E can use these opportunities to build new business models that can help the communities that Hersha Hospitality Pref E operates in. Secondly it can use opportunities from government spending in sector.

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Threats Hersha Hospitality Pref E External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Hersha Hospitality Pref E are -

Increasing wage structure of Hersha Hospitality Pref E

– 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 Hersha Hospitality Pref E.

Environmental challenges

– Hersha Hospitality Pref E 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. Hersha Hospitality Pref E can take advantage of this fund but it will also bring new competitors in the industry.

High dependence on third party suppliers

– Hersha Hospitality Pref E 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.

Regulatory challenges

– Hersha Hospitality Pref E 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 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. Hersha Hospitality Pref E needs to understand the core reasons impacting the industry. This will help it in building a better workplace.

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. Hersha Hospitality Pref E 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.

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 Hersha Hospitality Pref E in the sector and impact the bottomline of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Hersha Hospitality Pref E in industry. The 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.

Stagnating economy with rate increase

– Hersha Hospitality Pref E 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 industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Hersha Hospitality Pref E may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Hersha Hospitality Pref E with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Technology acceleration in Forth Industrial Revolution

– Hersha Hospitality Pref E has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Hersha Hospitality Pref E needs to keep up with the evolution of technology in the 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.

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Weighted SWOT Analysis of Hersha Hospitality Pref E Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hersha Hospitality Pref E 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 Hersha Hospitality Pref E 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 Hersha Hospitality Pref E 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 Hersha Hospitality Pref E 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 Hersha Hospitality Pref E needs to make to build a sustainable competitive advantage.

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