Huatian Hotel A (428) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Huatian Hotel A (China)

Based on various researches at Oak Spring University , Huatian Hotel A is operating in a macro-environment that has been destablized by – increasing commodity prices, technology disruption, increasing household debt because of falling income levels, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of Huatian Hotel A

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Huatian Hotel A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Huatian Hotel A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Huatian Hotel 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 Huatian Hotel A can be done for the following purposes –
1. Strategic planning of Huatian Hotel A
2. Improving business portfolio management of Huatian Hotel 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 Huatian Hotel A

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Strengths of Huatian Hotel A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Huatian Hotel A are -

Effective Research and Development (R&D)

– Huatian Hotel A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Huatian Hotel 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.

Analytics focus

– Huatian Hotel 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.

Digital Transformation in Hotels & Motels industry

- digital transformation varies from industry to industry. For Huatian Hotel A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Huatian Hotel 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.

Sustainable margins compare to other players in Hotels & Motels industry

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

Highly skilled collaborators

– Huatian Hotel 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 Huatian Hotel A have helped the firm to develop new products and bring them quickly to the marketplace.

Operational resilience

– The operational resilience strategy of Huatian Hotel 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.

High switching costs

– The high switching costs that Huatian Hotel 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.

Cross disciplinary teams

– Horizontal connected teams at the Huatian Hotel 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

– Huatian Hotel 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 Huatian Hotel A 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 Huatian Hotel A in the Services sector have low bargaining power. Huatian Hotel A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Huatian Hotel A to manage not only supply disruptions but also source products at highly competitive prices.

Learning organization

- Huatian Hotel A 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 Huatian Hotel A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Huatian Hotel A emphasize – knowledge, initiative, and innovation.

Organizational Resilience of Huatian Hotel A

– The covid-19 pandemic has put organizational resilience at the centre of everthing Huatian Hotel A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

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Weaknesses of Huatian Hotel A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Huatian Hotel A are -

High bargaining power of channel partners in Hotels & Motels industry

– because of the regulatory requirements in China, Huatian Hotel 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.

Employees’ less understanding of Huatian Hotel A strategy

– From the outside it seems that the employees of Huatian Hotel 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.

Slow to strategic competitive environment developments

– As Huatian Hotel A 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.

Workers concerns about automation

– As automation is fast increasing in the Hotels & Motels industry, Huatian Hotel 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.

Lack of clear differentiation of Huatian Hotel A products

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

Increasing silos among functional specialists

– The organizational structure of Huatian Hotel A is dominated by functional specialists. It is not different from other players in the Hotels & Motels industry, but Huatian Hotel A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Huatian Hotel A to focus more on services in the Hotels & Motels industry rather than just following the product 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 Huatian Hotel A supply chain. Even after few cautionary changes, Huatian Hotel A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Huatian Hotel A vulnerable to further global disruptions in South East Asia.

High cash cycle compare to competitors

Huatian Hotel 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.

Ability to respond to the competition

– As the decision making is very deliberative at Huatian Hotel A, in the dynamic environment of Hotels & Motels industry it has struggled to respond to the nimble upstart competition. Huatian Hotel A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Huatian Hotel A is slow explore the new channels of communication. These new channels of communication can help Huatian Hotel 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.

Aligning sales with marketing

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

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Huatian Hotel A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Huatian Hotel A are -

Loyalty marketing

– Huatian Hotel 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.

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 Huatian Hotel A in the Hotels & Motels industry. Now Huatian Hotel A can target international markets with far fewer capital restrictions requirements than the existing system.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Huatian Hotel 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 Huatian Hotel 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.

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. Huatian Hotel A can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Huatian Hotel A can use these opportunities to build new business models that can help the communities that Huatian Hotel A operates in. Secondly it can use opportunities from government spending in Hotels & Motels sector.

Low interest rates

– Even though inflation is raising its head in most developed economies, Huatian Hotel A 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.

Creating value in data economy

– The success of analytics program of Huatian Hotel A has opened avenues for new revenue streams for the organization in Hotels & Motels industry. This can help Huatian Hotel A to build a more holistic ecosystem for Huatian Hotel A products in the Hotels & Motels industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Manufacturing automation

– Huatian Hotel 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.

Developing new processes and practices

– Huatian Hotel 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Huatian Hotel 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.

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 Huatian Hotel 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.

Building a culture of innovation

– managers at Huatian Hotel 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Huatian Hotel A is facing challenges because of the dominance of functional experts in the organization. Huatian Hotel 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.

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Threats Huatian Hotel A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Huatian Hotel A are -

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Hotels & Motels industry are lowering. It can presents Huatian Hotel A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Hotels & Motels sector.

Stagnating economy with rate increase

– Huatian Hotel 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.

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.

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 Huatian Hotel A in the Hotels & Motels sector and impact the bottomline of the organization.

Consumer confidence and its impact on Huatian Hotel 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.

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. Huatian Hotel A needs to understand the core reasons impacting the Hotels & Motels industry. This will help it in building a better workplace.

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 Huatian Hotel A.

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 Huatian Hotel A business can come under increasing regulations regarding data privacy, data security, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Huatian Hotel 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.

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. Huatian Hotel 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

– Huatian Hotel A has witnessed rapid integration of technology during Covid-19 in the Hotels & Motels industry. As one of the leading players in the industry, Huatian Hotel 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.

Environmental challenges

– Huatian Hotel 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. Huatian Hotel A can take advantage of this fund but it will also bring new competitors in the Hotels & Motels industry.

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.

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Weighted SWOT Analysis of Huatian Hotel A Template, Example

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

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