Hersha Hospitality Pref E (HT_pe) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / 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 – cloud computing is disrupting traditional business models, wage bills are increasing, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, geopolitical disruptions, there is increasing trade war between United States & China,
talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, etc
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.
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
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.
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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Hersha Hospitality Pref E digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hersha Hospitality Pref E 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.
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.
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.
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.
Effective Research and Development (R&D)
– Hersha Hospitality Pref E has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hersha Hospitality Pref E staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Hersha Hospitality Pref E 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 industry. The technology infrastructure of United States 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.
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.
Training and development
– Hersha Hospitality Pref E has one of the best training and development program in 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.
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.
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.
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.
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 Hersha Hospitality Pref E supply chain. Even after few cautionary changes, Hersha Hospitality Pref E is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hersha Hospitality Pref E vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Hersha Hospitality Pref E is just above the 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.
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.
Products dominated business model
– Even though Hersha Hospitality Pref E has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Hersha Hospitality Pref E should strive to include more intangible value offerings along with its core products and services.
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.
Employees’ less understanding of Hersha Hospitality Pref E strategy
– From the outside it seems that the employees of Hersha Hospitality Pref E don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Ability to respond to the competition
– As the decision making is very deliberative at Hersha Hospitality Pref E, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Hersha Hospitality Pref E has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Hersha Hospitality Pref E has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 -
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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Hersha Hospitality Pref E 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.
Creating value in data economy
– The success of analytics program of Hersha Hospitality Pref E has opened avenues for new revenue streams for the organization in industry. This can help Hersha Hospitality Pref E to build a more holistic ecosystem for Hersha Hospitality Pref E products in the industry by providing – data insight services, data privacy related products, data based consulting services, 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.
Loyalty marketing
– Hersha Hospitality Pref E 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hersha Hospitality Pref E is facing challenges because of the dominance of functional experts in the organization. Hersha Hospitality Pref E can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hersha Hospitality Pref E can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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 -
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.
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.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hersha Hospitality Pref E can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hersha Hospitality Pref E 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 Hersha Hospitality Pref E prominent markets.
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.
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.
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.
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.
Consumer confidence and its impact on Hersha Hospitality Pref E 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 industry and other sectors.
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 Hersha Hospitality Pref E.
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.
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.
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.
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.