Shanghai Jin Jiang Hotels B (900934) SWOT Analysis / TOWS Matrix / MBA Resources
Hotels & Motels
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shanghai Jin Jiang Hotels B (China)
Based on various researches at Oak Spring University , Shanghai Jin Jiang Hotels B is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, geopolitical disruptions, there is backlash against globalization, technology disruption, increasing commodity prices, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Shanghai Jin Jiang Hotels B
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Jin Jiang Hotels B can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Jin Jiang Hotels B, 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 B 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 B can be done for the following purposes –
1. Strategic planning of Shanghai Jin Jiang Hotels B
2. Improving business portfolio management of Shanghai Jin Jiang Hotels B
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 B
Strengths of Shanghai Jin Jiang Hotels B | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Jin Jiang Hotels B are -
Ability to lead change in Hotels & Motels
– Shanghai Jin Jiang Hotels B 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 B in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Shanghai Jin Jiang Hotels B in the Services sector have low bargaining power. Shanghai Jin Jiang Hotels B has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai Jin Jiang Hotels B to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Shanghai Jin Jiang Hotels B 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.
Operational resilience
– The operational resilience strategy of Shanghai Jin Jiang Hotels B 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.
Learning organization
- Shanghai Jin Jiang Hotels B 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 Shanghai Jin Jiang Hotels B is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai Jin Jiang Hotels B emphasize – knowledge, initiative, and innovation.
Analytics focus
– Shanghai Jin Jiang Hotels B 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.
Digital Transformation in Hotels & Motels industry
- digital transformation varies from industry to industry. For Shanghai Jin Jiang Hotels B digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai Jin Jiang Hotels B 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.
Sustainable margins compare to other players in Hotels & Motels industry
– Shanghai Jin Jiang Hotels B has clearly differentiated products in the market place. This has enabled Shanghai Jin Jiang Hotels B to fetch slight price premium compare to the competitors in the Hotels & Motels industry. The sustainable margins have also helped Shanghai Jin Jiang Hotels B to invest into research and development (R&D) and innovation.
Innovation driven organization
– Shanghai Jin Jiang Hotels B is one of the most innovative firm in Hotels & Motels sector.
Diverse revenue streams
– Shanghai Jin Jiang Hotels B is present in almost all the verticals within the Hotels & Motels industry. This has provided Shanghai Jin Jiang Hotels B 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.
High switching costs
– The high switching costs that Shanghai Jin Jiang Hotels B 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.
High brand equity
– Shanghai Jin Jiang Hotels B 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 B to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Shanghai Jin Jiang Hotels B | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Jin Jiang Hotels B are -
Interest costs
– Compare to the competition, Shanghai Jin Jiang Hotels B 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 Shanghai Jin Jiang Hotels B ‘s star products
– The top 2 products and services of Shanghai Jin Jiang Hotels B 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 B has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Shanghai Jin Jiang Hotels B 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 B can leverage the sales team experience to cultivate customer relationships as Shanghai Jin Jiang Hotels B is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Shanghai Jin Jiang Hotels B, in the dynamic environment of Hotels & Motels industry it has struggled to respond to the nimble upstart competition. Shanghai Jin Jiang Hotels B has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Shanghai Jin Jiang Hotels B 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 B 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.
Capital Spending Reduction
– Even during the low interest decade, Shanghai Jin Jiang Hotels B 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 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 B supply chain. Even after few cautionary changes, Shanghai Jin Jiang Hotels B 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 B vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Shanghai Jin Jiang Hotels B 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.
Slow to strategic competitive environment developments
– As Shanghai Jin Jiang Hotels B is one of the leading players in the Hotels & Motels industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Hotels & Motels industry in last five years.
High bargaining power of channel partners in Hotels & Motels industry
– because of the regulatory requirements in China, Shanghai Jin Jiang Hotels B 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.
Low market penetration in new markets
– Outside its home market of China, Shanghai Jin Jiang Hotels B needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Shanghai Jin Jiang Hotels B Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai Jin Jiang Hotels B are -
Learning at scale
– Online learning technologies has now opened space for Shanghai Jin Jiang Hotels B 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 B can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Shanghai Jin Jiang Hotels B 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.
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 B can use these opportunities to build new business models that can help the communities that Shanghai Jin Jiang Hotels B operates in. Secondly it can use opportunities from government spending in Hotels & Motels sector.
Creating value in data economy
– The success of analytics program of Shanghai Jin Jiang Hotels B has opened avenues for new revenue streams for the organization in Hotels & Motels industry. This can help Shanghai Jin Jiang Hotels B to build a more holistic ecosystem for Shanghai Jin Jiang Hotels B products in the Hotels & Motels industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Shanghai Jin Jiang Hotels B 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.
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 B 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 B to hire the very best people irrespective of their geographical location.
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. Shanghai Jin Jiang Hotels B can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Shanghai Jin Jiang Hotels B 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 B to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Jin Jiang Hotels B to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanghai Jin Jiang Hotels B 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.
Buying journey improvements
– Shanghai Jin Jiang Hotels B can improve the customer journey of consumers in the Hotels & Motels industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Use of Bitcoin and other crypto currencies for transactions in Hotels & Motels industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanghai Jin Jiang Hotels B in the Hotels & Motels industry. Now Shanghai Jin Jiang Hotels B can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Shanghai Jin Jiang Hotels B 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.
Threats Shanghai Jin Jiang Hotels B External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai Jin Jiang Hotels B are -
Stagnating economy with rate increase
– Shanghai Jin Jiang Hotels B 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.
Increasing wage structure of Shanghai Jin Jiang Hotels B
– 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 B.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Hotels & Motels industry are lowering. It can presents Shanghai Jin Jiang Hotels B with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Hotels & Motels sector.
Technology acceleration in Forth Industrial Revolution
– Shanghai Jin Jiang Hotels B 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 B 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.
Shortening product life cycle
– it is one of the major threat that Shanghai Jin Jiang Hotels B is facing in Hotels & Motels sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Shanghai Jin Jiang Hotels B 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai Jin Jiang Hotels B 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.
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.
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 B 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.
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.
High dependence on third party suppliers
– Shanghai Jin Jiang Hotels B 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.
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 B needs to understand the core reasons impacting the Hotels & Motels industry. This will help it in building a better workplace.
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 B 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 B 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 B 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 B 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 B 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 B 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 B needs to make to build a sustainable competitive advantage.