Shanghai Jin Jiang Hotels A (600754) SWOT Analysis / TOWS Matrix / 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 – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, technology disruption, etc

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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.

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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

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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 -

Innovation driven organization

– Shanghai Jin Jiang Hotels A is one of the most innovative firm in Hotels & Motels sector.

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.

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.

High switching costs

– The high switching costs that Shanghai Jin Jiang Hotels A 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.

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.

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.

Analytics focus

– Shanghai Jin Jiang Hotels A 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 China is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Ability to 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.

Strong track record of project management in the Hotels & Motels industry

– Shanghai Jin Jiang Hotels A is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Operational resilience

– The operational resilience strategy of Shanghai Jin Jiang Hotels A comprises – understanding the underlying the factors in the Hotels & Motels 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.

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.

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.

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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 -

Capital Spending Reduction

– Even during the low interest decade, Shanghai Jin Jiang Hotels A 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.

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.

Aligning sales with marketing

– From the outside it seems that Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A can leverage the sales team experience to cultivate customer relationships as Shanghai Jin Jiang Hotels A is planning to shift buying processes online.

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.

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 Shanghai Jin Jiang Hotels A supply chain. Even after few cautionary changes, Shanghai Jin Jiang Hotels A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanghai Jin Jiang Hotels A vulnerable to further global disruptions in South East Asia.

Lack of clear differentiation of Shanghai Jin Jiang Hotels A products

– To increase the profitability and margins on the products, Shanghai Jin Jiang Hotels A needs to provide more differentiated products than what it is currently offering in the marketplace.

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.

Slow decision making process

– As mentioned earlier in the report, Shanghai Jin Jiang Hotels A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Hotels & Motels industry over the last five years. Shanghai Jin Jiang Hotels A even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

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.

High operating costs

– Compare to the competitors, Shanghai Jin Jiang Hotels A has high operating costs in the Hotels & Motels industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai Jin Jiang Hotels A lucrative customers.

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.

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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 -

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.

Better consumer reach

– The expansion of the 5G network will help Shanghai Jin Jiang Hotels A to increase its market reach. Shanghai Jin Jiang Hotels A 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.

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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai Jin Jiang Hotels A 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 Shanghai Jin Jiang Hotels A to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Shanghai Jin Jiang Hotels A is facing challenges because of the dominance of functional experts in the organization. Shanghai Jin Jiang Hotels A can utilize new technology in the field of Hotels & Motels industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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.

Learning at scale

– Online learning technologies has now opened space for Shanghai Jin Jiang Hotels A 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.

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.

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.

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.

Loyalty marketing

– Shanghai Jin Jiang Hotels A 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.

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.

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.

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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 -

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.

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.

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 wage structure of Shanghai Jin Jiang Hotels A

– 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 Shanghai Jin Jiang Hotels A.

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.

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.

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.

Stagnating economy with rate increase

– Shanghai Jin Jiang Hotels A can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Hotels & Motels industry.

Shortening product life cycle

– it is one of the major threat that Shanghai Jin Jiang Hotels A is facing in Hotels & Motels sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

High dependence on third party suppliers

– Shanghai Jin Jiang Hotels A 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.

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.

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.

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.

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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.

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