Red Lion Hotels Corporation SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Red Lion Hotels Corporation is one of the leading firms in its industry. Red Lion Hotels Corporation maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.


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The SWOT Analysis framework helps 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 called SWOT Matrix.

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

• SO (strengths-opportunities) Strategies
• WO (weaknesses-opportunities) Strategies
• ST (strengths-threats) Strategies
•  WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Red Lion Hotels Corporation strengths, and eradicate its weaknesses.

Step by Step Guide to Red Lion Hotels Corporation SWOT Analysis

Strengths of Red Lion Hotels Corporation – Internal Strategic Factors

As one of the leading firms in its industry, Red Lion Hotels Corporation 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 Red Lion Hotels Corporation are –

Read - Red Lion Hotels Corporation Porter 5 Forces Analysis & Industry Analysis
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• Good Returns on Capital Expenditure – Red Lion Hotels Corporation is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• 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.
• Superb Performance in New Markets – Red Lion Hotels Corporation 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.
• Automation of activities brought consistency of quality to Red Lion Hotels Corporation products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Strong distribution network – Over the years Red Lion Hotels Corporation has built a reliable distribution network that can reach majority of its potential market.
• Strong Free Cash Flow – Red Lion Hotels Corporation has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Strong Brand Portfolio – Over the years Red Lion Hotels Corporation has invested in building a strong brand portfolio. The SWOT analysis of Red Lion Hotels Corporation just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Successful track record of developing new products – product innovation.

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Weakness of Red Lion Hotels Corporation – Internal Strategic Factors

Weakness are the areas where Red Lion Hotels Corporation can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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• Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Red Lion Hotels Corporation is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• Limited success outside core business – Even though Red Lion Hotels Corporation is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• 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. Red Lion Hotels Corporation has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Red Lion Hotels Corporation is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Red Lion Hotels Corporation is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Red Lion Hotels Corporation – External Strategic Factors

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• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Red Lion Hotels Corporation to increase its profitability.
• Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
• The market development will lead to dilution of competitor’s advantage and enable Red Lion Hotels Corporation to increase its competitiveness compare to the other competitors.
• 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 Red Lion Hotels Corporation in other product categories.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Red Lion Hotels Corporation an opportunity to enter a new emerging market.
• 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 Red Lion Hotels Corporation. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Red Lion Hotels Corporation’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
• Government green drive also opens an opportunity for procurement of Red Lion Hotels Corporation products by the state as well as federal government contractors.

Threats Red Lion Hotels Corporation Facing - External Strategic Factors

• Rising raw material can pose a threat to the Red Lion Hotels Corporation profitability.
• Imitation of the counterfeit and low quality product is also a threat to Red Lion Hotels Corporation’s product especially in the emerging markets and low income markets.
• The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Red Lion Hotels Corporation
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Red Lion Hotels Corporation   in those markets.

Limitations of SWOT Analysis for Red Lion Hotels Corporation

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 Red Lion Hotels Corporation
• 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.

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Weighted SWOT Analysis of Red Lion Hotels Corporation

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 Red Lion Hotels Corporation 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 Red Lion Hotels Corporation

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

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

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)