Hainan Dadonghai Tourism B (200613) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Hainan Dadonghai Tourism B (China)

Based on various researches at Oak Spring University , Hainan Dadonghai Tourism B is operating in a macro-environment that has been destablized by – increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing energy prices, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, geopolitical disruptions, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of Hainan Dadonghai Tourism B

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hainan Dadonghai Tourism B can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hainan Dadonghai Tourism B, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hainan Dadonghai Tourism 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Hainan Dadonghai Tourism B can be done for the following purposes –
1. Strategic planning of Hainan Dadonghai Tourism B
2. Improving business portfolio management of Hainan Dadonghai Tourism 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 Hainan Dadonghai Tourism B

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Strengths of Hainan Dadonghai Tourism B | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Hainan Dadonghai Tourism B are -

Diverse revenue streams

– Hainan Dadonghai Tourism B is present in almost all the verticals within the Hotels & Motels industry. This has provided Hainan Dadonghai Tourism 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.

Ability to recruit top talent

– Hainan Dadonghai Tourism B 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.

Organizational Resilience of Hainan Dadonghai Tourism B

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

Digital Transformation in Hotels & Motels industry

- digital transformation varies from industry to industry. For Hainan Dadonghai Tourism B digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hainan Dadonghai Tourism 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

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

Ability to lead change in Hotels & Motels

– Hainan Dadonghai Tourism 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 Hainan Dadonghai Tourism B in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Operational resilience

– The operational resilience strategy of Hainan Dadonghai Tourism 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.

High switching costs

– The high switching costs that Hainan Dadonghai Tourism 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.

Analytics focus

– Hainan Dadonghai Tourism 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.

Superior customer experience

– The customer experience strategy of Hainan Dadonghai Tourism B in Hotels & Motels industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Hainan Dadonghai Tourism B is one of the most innovative firm in Hotels & Motels sector.

Learning organization

- Hainan Dadonghai Tourism 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 Hainan Dadonghai Tourism B is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hainan Dadonghai Tourism B emphasize – knowledge, initiative, and innovation.

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Weaknesses of Hainan Dadonghai Tourism B | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Hainan Dadonghai Tourism B are -

Slow decision making process

– As mentioned earlier in the report, Hainan Dadonghai Tourism 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. Hainan Dadonghai Tourism 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hainan Dadonghai Tourism B is slow explore the new channels of communication. These new channels of communication can help Hainan Dadonghai Tourism B to provide better information regarding Hotels & Motels products and services. It can also build an online community to further reach out to potential customers.

High dependence on Hainan Dadonghai Tourism B ‘s star products

– The top 2 products and services of Hainan Dadonghai Tourism 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 Hainan Dadonghai Tourism B has relatively successful track record of launching new products.

No frontier risks strategy

– From the 10K / annual statement of Hainan Dadonghai Tourism B, 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.

Ability to respond to the competition

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

High bargaining power of channel partners in Hotels & Motels industry

– because of the regulatory requirements in China, Hainan Dadonghai Tourism 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.

Skills based hiring in Hotels & Motels industry

– The stress on hiring functional specialists at Hainan Dadonghai Tourism B has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

High cash cycle compare to competitors

Hainan Dadonghai Tourism B 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.

Employees’ less understanding of Hainan Dadonghai Tourism B strategy

– From the outside it seems that the employees of Hainan Dadonghai Tourism B 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 operating costs

– Compare to the competitors, Hainan Dadonghai Tourism B 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 Hainan Dadonghai Tourism B lucrative customers.

Compensation and incentives

– The revenue per employee of Hainan Dadonghai Tourism 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.

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Hainan Dadonghai Tourism B Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Hainan Dadonghai Tourism B are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Hainan Dadonghai Tourism B 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Hainan Dadonghai Tourism B 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 Hainan Dadonghai Tourism B to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Hainan Dadonghai Tourism B is facing challenges because of the dominance of functional experts in the organization. Hainan Dadonghai Tourism B 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Hainan Dadonghai Tourism 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.

Using analytics as competitive advantage

– Hainan Dadonghai Tourism 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 Hainan Dadonghai Tourism B to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hainan Dadonghai Tourism B to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Creating value in data economy

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

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Hainan Dadonghai Tourism B can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Buying journey improvements

– Hainan Dadonghai Tourism 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.

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. Hainan Dadonghai Tourism B 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. Hainan Dadonghai Tourism B 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

– Hainan Dadonghai Tourism 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.

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 Hainan Dadonghai Tourism B in the Hotels & Motels industry. Now Hainan Dadonghai Tourism B can target international markets with far fewer capital restrictions requirements than the existing system.

Better consumer reach

– The expansion of the 5G network will help Hainan Dadonghai Tourism B to increase its market reach. Hainan Dadonghai Tourism B 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.

Increase in government spending

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

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Threats Hainan Dadonghai Tourism B External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Hainan Dadonghai Tourism B are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Hainan Dadonghai Tourism 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.

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. Hainan Dadonghai Tourism B 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Hotels & Motels industry are lowering. It can presents Hainan Dadonghai Tourism 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.

Stagnating economy with rate increase

– Hainan Dadonghai Tourism 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.

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.

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 Hainan Dadonghai Tourism B in the Hotels & Motels sector and impact the bottomline of the organization.

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 Hainan Dadonghai Tourism B.

Technology acceleration in Forth Industrial Revolution

– Hainan Dadonghai Tourism B has witnessed rapid integration of technology during Covid-19 in the Hotels & Motels industry. As one of the leading players in the industry, Hainan Dadonghai Tourism 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Hainan Dadonghai Tourism 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.

Environmental challenges

– Hainan Dadonghai Tourism B 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. Hainan Dadonghai Tourism B can take advantage of this fund but it will also bring new competitors in the Hotels & Motels industry.

Increasing wage structure of Hainan Dadonghai Tourism 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 Hainan Dadonghai Tourism B.

Consumer confidence and its impact on Hainan Dadonghai Tourism 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.

High dependence on third party suppliers

– Hainan Dadonghai Tourism 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.

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Weighted SWOT Analysis of Hainan Dadonghai Tourism B Template, Example

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

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