Hyatt Hotels SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Hyatt Hotels managers to do a situational analysis of the firm . It is a useful technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Hyatt Hotels is facing in its current business environment.

The Hyatt Hotels is one of the leading companies in its industry. Hyatt Hotels maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis a highly interactive process and requires effective coordination among various departments within the firm such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Hyatt Hotels to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Hyatt Hotels swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Hyatt Hotels strengths, and eradicate its weaknesses.

Step by Step Guide to Hyatt Hotels SWOT Analysis

Strengths of Hyatt Hotels – Internal Strategic Factors

As one of the leading companies in its industry, Hyatt Hotels has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Hyatt Hotels are –

  • Successful track record of developing new products – product innovation.
  • Strong Brand Portfolio – Over the years Hyatt Hotels has invested in building a strong brand portfolio. The SWOT analysis of Hyatt Hotels just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Superb Performance in New Markets – Hyatt Hotels has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • Strong distribution network – Over the years Hyatt Hotels has built a reliable distribution network that can reach majority of its potential market.
  • Highly successful at Go To Market strategies for its products.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
  • Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
  • Strong Free Cash Flow – Hyatt Hotels has strong free cash flows that provide resources in the hand of the company to expand into new projects.

Weakness of Hyatt Hotels – Internal Strategic Factors

Weakness are the areas where Hyatt Hotels can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Hyatt Hotels needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Hyatt Hotels
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Hyatt Hotels has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Limited success outside core business – Even though Hyatt Hotels is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Hyatt Hotels is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.

Opportunities for Hyatt Hotels – External Strategic Factors

  • New trends in the consumer behavior can open up new market for the Hyatt Hotels . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Hyatt Hotels.
  • New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Hyatt Hotels to drive home its advantage in new technology and gain market share in the new product category.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Hyatt Hotels to capture new customers and increase its market share.
  • New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Hyatt Hotels. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Hyatt Hotels an opportunity to enter a new emerging market.
  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Hyatt Hotels in other product categories.
  • The new technology provides an opportunity to Hyatt Hotels to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.

Threats Hyatt Hotels Facing - External Strategic Factors

  • No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Hyatt Hotels
  • Liability laws in different countries are different and Hyatt Hotels may be exposed to various liability claims given change in policies in those markets.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.

Limitations of SWOT Analysis for Hyatt Hotels

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Hyatt Hotels
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Hyatt Hotels

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Hyatt Hotels managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Hyatt Hotels

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

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References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)