Hotelsim Hotel SWOT Analysis

Introduction

Regardless of the size of an organization, business strategy has always been an essential element of success, and it is required that each business plans ahead for better performance. According to Wheelen and Hunger (2011), short- and long-term goals are the primary points towards succeeding in any venture. With this in mind, a business strategy is all about target and how they will be achieved. Making a business strategy is a process that puts various factors into consideration, both internal and external. In times of economic crisis, businesses will change their way of thinking and planning to adapt to current situation (Myers, 2019). It is interesting to see a company in a particular industry considering all the possible factors affecting its strategy and applying changes to survive. This does not mean that all businesses must adopt a particular strategy. It is possible to find organizations not interested in a strategy or able to develop one. Furthermore, having a strategy does not mean that it is correct and has taken all factors into account.

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The business under scrutiny in this report, Hotelsim, launched eight years ago and has established itself as a luxury style hotel known for its use of current technology. Once among the most sorted hotels in the region, Hotelsim has been affected by some factors that have hindered its successful operation. The hotel offers four-star accommodation and services at the waterfront site of the city center. Its services business, leisure, tour, contract, large group, and small group segments. This means that this hotel has a potentially high demand for its services and has been exploiting its segment profitably until the business environment changed. This report is a snapshot of the present strategies and methods of efficient and effective management. It shows how Hotelsim is facing its external and internal business environments in order to operate profitably and continue in the hotel industry. This paper is a SWOT of Hotelsim hotel.

Stakeholders

The meaning of stakeholders as provided by Freeman (2010) are individuals or a group of people who influence or are affected by the activities and the results of a business. In an organization, stakeholders are divided into two broad categories, internal and external. According to Freeman (2010), internal stakeholders consist of senior management and employees while external stakeholders include customers, suppliers, community, government agencies, non-governmental organization, business alliances, and political and environmental groups. Another classification is that of Wagner Mainardes et al. (2012), who categorizes stakeholders as either primary or secondary based on their relationship with a business. Primary stakeholders refer to entities involved in a formal relationship with an organization. They include customers, employees, suppliers and public agencies. Secondary stakeholders are not involved with a business formally and are actors such as the special interest groups and the media.

Stakeholders of Hotelsim plays crucial roles in the success of the business and in shaping its sustainability strategy. The main stakeholders surrounding Hotelsim are its owners and associates, shareholders, the community, supply chain, and the governmental and nongovernmental organizations. The interest of owners and associates is the development of the hotel in terms of physical and economic progress. They are also interested in the creation of programs such as culture and heritage appreciation elements to make the hotel have a unique identity. The interests of shareholders include an annual report, analyst meetings, conference calls, annual shareholder meetings, sustainability reporting, and carbon disclosure (Felipe-Lucia, et al., 2015). The community as a stakeholder is interested in the involvement in engagement programs such as fundraisers, disaster relief and any other form of donations. Supply chain, on the other hand, is looking for capacity building of supplies from locals, strategic partnership, workshops and maintainable procurement programs. Government is mainly interested in regulatory filings, advocacy, briefings, and research lobbying (Smallbone, et al., 2010). Finally, non-governmental organizations have an interest in partnerships on global issues, working groups, advocacy for environmental sustenance such as degradation and deforestation.

Understanding and considering the priorities and concerns of stakeholders inform the evaluation process. Earlier studies have identified the importance of stakeholder's interests and how they act as a catalyst for the development of proactive business strategies. This shows how influential stakeholders are to the corporate decisions made by an organization. As noted by Bryson et al. (2011), businesses ought to evaluate their stakeholders and consider external issues and create strategies that are consistent with values for sustainable development. To enhance the smooth running of business, stakeholder participation has been regarded as useful in the effort to expound innate boundary struggles and to shift control to parties played down in the traditional knowledge. Nonetheless, the participation of stakeholders needs to be underpinned by the theory that emphasizes empowerment, learning, and equity (Mascarenhas, et al., 2015). To overcome the disadvantages of decision making on external factors, stakeholder involvement needs to be institutionalized, forming organizational values that can enable achievement of objectives and create proper solutions to external issues.

SWOT Analysis - Strength and Weakness

Business involves various industrial and commerce activities of the organization, production, delivery to consumers with the overall objective of profit maximization. Various factors occur within the business environment that has a bearing on organization performance. According to Helms and Nixon (2010), SWOT analysis is the most used tool globally in the evaluation of these factors. It is made up of four parts, represented by each letter. S for strength, W for weakness, O for opportunities, and T for threats. Helms and Nixon (2010) further provide that the first two, strengths and weakness are parts of the internal environment and the last two, opportunities are external environment. Strengths and weakness are internal factors because they can be affected by the management of the business whereas opportunities and threats cannot be influenced cannon be affected by the business such as competition, wars, or governmental policies.

Strengths within a business are the abilities that place it at a position to compete strongly within an industry and help it fulfil its set goals and objectives (Gurel & Tat, 2017). These abilities could be in their service or product, the brand or any other aspect that helps the business gain competitive advantage. This analysis has identified the strengths of information gathered on the internal environment of Hotelsim hotel. Among the strengths of Hotelsim is its position as one of the leading brands in the hospitality industry hence a strong portfolio. Hotelsim is recognized for its unpretentious luxury and charm which in other words places it as a well-established brand. It is also known for its latest technological resources such as the internet, digital national and international telephone service, key cards, and guest room digital entertainment. It is a large hotel within the locality with a four-star rating and an average room occupancy of above 50%. The hotel has a well-established reputation among the locals for its promotion and restoration of the indigenous cultural heritage. In regards to infrastructure, it is equipped with standard facilities. There are 2000 square feet of conference and event space in flexible configurations for up to 200 persons. There are 250 guest rooms, 50 premium and 200 standard and one restaurant with 125 seats with adjoining 50-seat bar lounge section. Lastly, the hotel offers additional in-house services such as guest laundry and dry cleaning. These activities make the hotel and its services unique and place it in a better competitive position.

On the other hand, there are various weaknesses that the business portrays as well. Weaknesses are the absence of specific strengths and can be of many kinds, such as poor vision set by managers (Gurel & Tat, 2017). For Hotelsim, the major weakness is seen in its absence of financing which has tremendously disadvantaged the business. The dramatic decrease in profits has made it tough for the business to fund its capital investment projects and refurbishments that could potentially add more value to the business and place it a better competitive position with the neighboring market. The steady decline in the performance of the hotel could be partially attributed to lack of refurbishment to help the business maintain its luxury standards. There is also the emergence of competitors with better services that has led to the loss of residents and community guests. Hotelsim also lacks proper equipment management and charging parking fees to guests also presents a business weakness. Finally, there is a lack of proper managerial control of the business.

Considering the strengths and weaknesses of Hotelsim, there is a need to improve its internal business processes. While the business shows significant strength, its weaknesses can result in business failure and perhaps the reason for reduced profit. In the short or long term, there is a possibility of business failure if the weaknesses are not corrected. According to Kohlbacher (2010), improving business processes is an excellent means through which managers can help expand the value of their organizations. As time goes companies grow and the dynamics of the business environment changes as well. This makes managing a business more complicated as many players are involved in its daily operations. Information is shared between different parties, and there is more variability in customer's expectation and what they choose to buy. It becomes challenging to manage the internal processes which add more risks and costs to the business. Zairi (2012) recommends that for continued growth in the overly complicated environment, internal processes ought to be evaluated and improved. He further asserts that the first step in the practical improvement of the business processes is setting up goals that are realistic, clear, and achievable. These should be in connection with the business value and process initiatives. The goals are the foundation of each improvement initiative that will be the basis of communication between workers and their managers. Improving internal business processes would help Hotelsim regain its competitive advantage.

SWOT and PESTEL Analysis - Opportunities

Opportunities are what a business considers as the means through which it can achieve its goals (Gurel & Tat, 2017). While there has been a steady decline in performance over the last two years for Hotelsim, there are changes in some aspects of the industry that the business can exploit to improve its performance. As in the past three years erosion has led to the occupancy level in the hotel to reduce from 78% to 54%. However, three key areas that have seen development indicate the opportunity that the business can exploit to better its performance. Firstly, there has been an improvement in four aspects of the economy which are...