Shanghai Jin Jiang Hotels A (600754) SWOT Analysis / TOWS Matrix / MBA Resources
Hotels & Motels
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shanghai Jin Jiang Hotels A (China)
Based on various researches at Oak Spring University , Shanghai Jin Jiang Hotels A is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, there is increasing trade war between United States & China, increasing energy prices, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, there is backlash against globalization, etc
Introduction to SWOT Analysis of Shanghai Jin Jiang Hotels A
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Jin Jiang Hotels A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Jin Jiang Hotels A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A can be done for the following purposes –
1. Strategic planning of Shanghai Jin Jiang Hotels A
2. Improving business portfolio management of Shanghai Jin Jiang Hotels A
3. Assessing feasibility of the new initiative in China
4. Making a Hotels & Motels sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai Jin Jiang Hotels A
Strengths of Shanghai Jin Jiang Hotels A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Jin Jiang Hotels A are -
Effective Research and Development (R&D)
– Shanghai Jin Jiang Hotels A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai Jin Jiang Hotels A 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.
Low bargaining power of suppliers
– Suppliers of Shanghai Jin Jiang Hotels A in the Services sector have low bargaining power. Shanghai Jin Jiang Hotels A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai Jin Jiang Hotels A to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Shanghai Jin Jiang Hotels A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanghai Jin Jiang Hotels A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Hotels & Motels industry
– Shanghai Jin Jiang Hotels A has clearly differentiated products in the market place. This has enabled Shanghai Jin Jiang Hotels A to fetch slight price premium compare to the competitors in the Hotels & Motels industry. The sustainable margins have also helped Shanghai Jin Jiang Hotels A to invest into research and development (R&D) and innovation.
Training and development
– Shanghai Jin Jiang Hotels A 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.
Cross disciplinary teams
– Horizontal connected teams at the Shanghai Jin Jiang Hotels A 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.
Ability to lead change in Hotels & Motels
– Shanghai Jin Jiang Hotels A is one of the leading players in the Hotels & Motels industry in China. Over the years it has not only transformed the business landscape in the Hotels & Motels industry in China but also across the existing markets. The ability to lead change has enabled Shanghai Jin Jiang Hotels A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Shanghai Jin Jiang Hotels A is present in almost all the verticals within the Hotels & Motels industry. This has provided Shanghai Jin Jiang Hotels A 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.
Ability to recruit top talent
– Shanghai Jin Jiang Hotels A is one of the leading players in the Hotels & Motels industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Shanghai Jin Jiang Hotels A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai Jin Jiang Hotels A 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.
Digital Transformation in Hotels & Motels industry
- digital transformation varies from industry to industry. For Shanghai Jin Jiang Hotels A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai Jin Jiang Hotels A 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.
Weaknesses of Shanghai Jin Jiang Hotels A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Jin Jiang Hotels A are -
Skills based hiring in Hotels & Motels industry
– The stress on hiring functional specialists at Shanghai Jin Jiang Hotels A 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.
Need for greater diversity
– Shanghai Jin Jiang Hotels A 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.
Compensation and incentives
– The revenue per employee of Shanghai Jin Jiang Hotels A 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.
High bargaining power of channel partners in Hotels & Motels industry
– because of the regulatory requirements in China, Shanghai Jin Jiang Hotels A 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.
Increasing silos among functional specialists
– The organizational structure of Shanghai Jin Jiang Hotels A is dominated by functional specialists. It is not different from other players in the Hotels & Motels industry, but Shanghai Jin Jiang Hotels A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai Jin Jiang Hotels A to focus more on services in the Hotels & Motels industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Shanghai Jin Jiang Hotels A, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai Jin Jiang Hotels A is slow explore the new channels of communication. These new channels of communication can help Shanghai Jin Jiang Hotels A to provide better information regarding Hotels & Motels products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Shanghai Jin Jiang Hotels A strategy
– From the outside it seems that the employees of Shanghai Jin Jiang Hotels A 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.
Workers concerns about automation
– As automation is fast increasing in the Hotels & Motels industry, Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A ‘s star products
– The top 2 products and services of Shanghai Jin Jiang Hotels A still accounts for major business revenue. This dependence on star products in Hotels & Motels industry has resulted into insufficient focus on developing new products, even though Shanghai Jin Jiang Hotels A has relatively successful track record of launching new products.
High cash cycle compare to competitors
Shanghai Jin Jiang Hotels A has a high cash cycle compare to other players in the Hotels & Motels industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Shanghai Jin Jiang Hotels A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai Jin Jiang Hotels A are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shanghai Jin Jiang Hotels A can use these opportunities to build new business models that can help the communities that Shanghai Jin Jiang Hotels A operates in. Secondly it can use opportunities from government spending in Hotels & Motels sector.
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 Shanghai Jin Jiang Hotels A 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.
Using analytics as competitive advantage
– Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Jin Jiang Hotels A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Hotels & Motels industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanghai Jin Jiang Hotels A 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. Shanghai Jin Jiang Hotels A can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Leveraging digital technologies
– Shanghai Jin Jiang Hotels A 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai Jin Jiang Hotels A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Shanghai Jin Jiang Hotels A 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.
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. Shanghai Jin Jiang Hotels A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shanghai Jin Jiang Hotels A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Hotels & Motels industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Shanghai Jin Jiang Hotels A 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.
Creating value in data economy
– The success of analytics program of Shanghai Jin Jiang Hotels A has opened avenues for new revenue streams for the organization in Hotels & Motels industry. This can help Shanghai Jin Jiang Hotels A to build a more holistic ecosystem for Shanghai Jin Jiang Hotels A products in the Hotels & Motels industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Shanghai Jin Jiang Hotels A 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.
Threats Shanghai Jin Jiang Hotels A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai Jin Jiang Hotels A are -
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 Shanghai Jin Jiang Hotels A.
Consumer confidence and its impact on Shanghai Jin Jiang Hotels A 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.
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 Shanghai Jin Jiang Hotels A in the Hotels & Motels sector and impact the bottomline of the organization.
Environmental challenges
– Shanghai Jin Jiang Hotels A 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. Shanghai Jin Jiang Hotels A can take advantage of this fund but it will also bring new competitors in the Hotels & Motels industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A prominent markets.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Shanghai Jin Jiang Hotels A business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai Jin Jiang Hotels A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Hotels & Motels sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai Jin Jiang Hotels A 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.
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. Shanghai Jin Jiang Hotels A needs to understand the core reasons impacting the Hotels & Motels 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. Shanghai Jin Jiang Hotels A 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.
Technology acceleration in Forth Industrial Revolution
– Shanghai Jin Jiang Hotels A has witnessed rapid integration of technology during Covid-19 in the Hotels & Motels industry. As one of the leading players in the industry, Shanghai Jin Jiang Hotels A 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.
Regulatory challenges
– Shanghai Jin Jiang Hotels A 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.
Easy access to finance
– Easy access to finance in Hotels & Motels industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanghai Jin Jiang Hotels A can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Shanghai Jin Jiang Hotels A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A needs to make to build a sustainable competitive advantage.