Hotels De Paris (LZTL) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Hotels De Paris (France)

Based on various researches at Oak Spring University , Hotels De Paris is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc

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Introduction to SWOT Analysis of Hotels De Paris

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hotels De Paris can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hotels De Paris, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hotels De Paris 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 Hotels De Paris can be done for the following purposes –
1. Strategic planning of Hotels De Paris
2. Improving business portfolio management of Hotels De Paris
3. Assessing feasibility of the new initiative in France
4. Making a Hotels & Motels sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hotels De Paris

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Strengths of Hotels De Paris | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Hotels De Paris are -

Cross disciplinary teams

– Horizontal connected teams at the Hotels De Paris 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.

Highly skilled collaborators

– Hotels De Paris 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 Hotels De Paris have helped the firm to develop new products and bring them quickly to the marketplace.

Digital Transformation in Hotels & Motels industry

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

Low bargaining power of suppliers

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

High brand equity

– Hotels De Paris has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hotels De Paris to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to lead change in Hotels & Motels

– Hotels De Paris is one of the leading players in the Hotels & Motels industry in France. Over the years it has not only transformed the business landscape in the Hotels & Motels industry in France but also across the existing markets. The ability to lead change has enabled Hotels De Paris in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Sustainable margins compare to other players in Hotels & Motels industry

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

Effective Research and Development (R&D)

– Hotels De Paris has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hotels De Paris 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.

Operational resilience

– The operational resilience strategy of Hotels De Paris 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.

Ability to recruit top talent

– Hotels De Paris is one of the leading players in the Hotels & Motels industry in France. It is in a position to attract the best talent available in France. The firm has a robust talent identification program that helps in identifying the brightest.

Innovation driven organization

– Hotels De Paris is one of the most innovative firm in Hotels & Motels sector.

Learning organization

- Hotels De Paris 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 Hotels De Paris is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hotels De Paris emphasize – knowledge, initiative, and innovation.

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Weaknesses of Hotels De Paris | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Hotels De Paris are -

Aligning sales with marketing

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

Low market penetration in new markets

– Outside its home market of France, Hotels De Paris needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Skills based hiring in Hotels & Motels industry

– The stress on hiring functional specialists at Hotels De Paris 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 bargaining power of channel partners in Hotels & Motels industry

– because of the regulatory requirements in France, Hotels De Paris 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.

Lack of clear differentiation of Hotels De Paris products

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

Products dominated business model

– Even though Hotels De Paris has some of the most successful models in the Hotels & Motels industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Hotels De Paris should strive to include more intangible value offerings along with its core products and services.

Workers concerns about automation

– As automation is fast increasing in the Hotels & Motels industry, Hotels De Paris 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.

Need for greater diversity

– Hotels De Paris has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

High dependence on Hotels De Paris ‘s star products

– The top 2 products and services of Hotels De Paris 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 Hotels De Paris has relatively successful track record of launching new products.

High cash cycle compare to competitors

Hotels De Paris 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.

Capital Spending Reduction

– Even during the low interest decade, Hotels De Paris 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.

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Hotels De Paris Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Hotels De Paris are -

Loyalty marketing

– Hotels De Paris 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.

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. Hotels De Paris 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. Hotels De Paris 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.

Buying journey improvements

– Hotels De Paris 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.

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. Hotels De Paris can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Reforming the budgeting process

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

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. Hotels De Paris 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

– Hotels De Paris 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.

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 Hotels De Paris 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.

Developing new processes and practices

– Hotels De Paris 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.

Creating value in data economy

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

Building a culture of innovation

– managers at Hotels De Paris 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.

Manufacturing automation

– Hotels De Paris 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.

Better consumer reach

– The expansion of the 5G network will help Hotels De Paris to increase its market reach. Hotels De Paris 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.

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Threats Hotels De Paris External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Hotels De Paris are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Hotels De Paris 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.

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

Increasing wage structure of Hotels De Paris

– 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 Hotels De Paris.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Hotels De Paris 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.

Environmental challenges

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

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. Hotels De Paris 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

– Hotels De Paris has witnessed rapid integration of technology during Covid-19 in the Hotels & Motels industry. As one of the leading players in the industry, Hotels De Paris 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 Hotels De Paris is facing in Hotels & Motels sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

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 Hotels De Paris.

Consumer confidence and its impact on Hotels De Paris demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Hotels & Motels industry and other sectors.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Hotels De Paris in the Hotels & Motels sector and impact the bottomline of the organization.

Barriers of entry lowering

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

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Weighted SWOT Analysis of Hotels De Paris Template, Example

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

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