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SWOT Strategic Management Model in Hospitality Industry


Subject Business Pages 3 Style APA


Strategic management entails formulating functional and effective strategies that enhance the competitiveness of an organization against its rivals. Strategic models are specifically designed to improve the strategizing process (Gürel & Tat, 2017). The models are varied in terms of operations and intended goals. Additionally, they have varied degrees of complexity. Some of the common models include SWOT analysis, balanced scorecard, PEST model, gap planning, Porter’s five forces, and VRIO framework. It is upon this basic understanding of strategic management models that this paper explains the relevance of the SWOT analytical framework in relation to the hospitality industry. This particular model is preferred because it presents a basic analysis of industries by considering both macro and micro environmental factors.

SWOT Analytical Framework

SWOT is an acronym representing strengths, weaknesses, opportunities, and threats. This model is considered a high-level strategic management tool since it evaluates both the internal and external factors. The model is relevant to both industries and individual organizations. This is because the model is easy to apply. Phadermrod, Crowder and Wills (2019) note that in spite of proposals for newer models, the SWOT model remains relevant to most industries because it guides the management into gaining a thorough and systematic evaluation of the environment and new projects. Because of this simplicity, the model can easily be incorporated into the organizations culture to encourage employees to think strategically. As much as this model is effective in strategic analysis, its main shortcomings include high possibility of subjective analysis. Basically, the content included in the model is dependent on the intensity of research conducted by the management to understand the industry and its underlying dynamics. A shallow analysis of the industry will present misleading information thus heightening the chances of missing the bigger issues that need to be solved (Gürel & Tat, 2017). The relevance and importance of the SWOT analysis is further highlighted with its application in the hospitality industry.

  1. Strengths of the Hospitality Industry

Strengths denotes internal factors within an organization or an industry that gives it advantage over rivals. These factors can be controlled by the individual firms and the industry experts. In reality, the hospitality industry rivals all the other industries because using services from one industry is an opportunity forgone to the hospitality industry. Some of the strengths noted across the industry include. First, the global hospitality industry has reported intensive growth over the past decade (Takacs & Vaduva, 2017). This is because of the increasing demand for the experience economy as evident with the rise of disruptive hospitality models such as Airbnb. The increased growth means more profitability for the incumbents. Secondly, the industry has attracted an increase in experts in hospitality. Over the past two decades, there have emerged hospitality academies specialized in researching and raising the levels of expertise in the industry (El-Sawalhy & Farid, 2017). Additionally, the area has attracted developments in curriculum which contribute towards a stronger value proposition for the clients.

  1. Weaknesses of the Hospitality Industry

Weaknesses refer to internal factors within the hospitality firms and the industry that can be controlled and influenced by the management. The primary weaknesses, as noted by Takacs and Vaduva (2017) is the lack of differentiation among hospitality firms. This is because the industry is in the maturity phases thus most of the new innovations are quickly copied by the other firms. As a result, the firms offer identical and comparable services and products. This has led to commoditization which hinders customer loyalty. The second weakness arises from the negative perception of the industry by some customers. This issue arises from the increased prevalence of overpromising advertisements. The resulting gap between expectations and service delivered creates post-purchase dissonance (Arif & Hossin, 2016). This happens when the hotels and other organizations in the industry fail to consistently meet client’s needs triggering negative behavioral reaction and unfavorable word of mouth.

Third, employees in the hospitality industry report the highest rate of turnover. This is attributed to the seasonality and unpredictability of the industry. The organizations are forced to have more part time employees who are paid meager wages that lead to high employee disengagement, and low motivation (Arif & Hossin, 2016). Owing to these negativities, the industry has failed to retain and sustain talent required to promote innovation.

  1. Opportunities in the Hospitality Industry

Technological advancements have encouraged the emergence of disruptive business models that are revolutionizing and improving the overall customer experience. Technologies such as social media has reduced the cost of positioning, marketing, and targeting customers. On the other hand, Airbnb and Uber have made it cost effective for people to travel and find affordable hospitality services namely foods, travel, and accommodation. The opportunity arises from globalization of the industry. According to Arif and Hossin (2016), globalization not only opens up underexplored hospitality and tourism sites, but also encourages multicultural and cross-cultural workforces. Firms with cross-cultured employees tend to offer superior services since the employees have a wider understanding of global cultures.

  1. Threats to Hospitality Industry

Threats refer to external factors or forces outside of the organization, that the management has no control or influence over. The hospitality industry can only find a favorable way around this issue since they are unavoidable. The first threat is pandemics and public health crisis (Baum & Hai, 2020). The global corona virus pandemic has motivated policy changes limiting physical conduct, and movements. Travel advisories, self-isolation, quarantine, and stay-at home policies have worked negatively against the industry. Secondly, the industry is threatened by seasonality (Takacs & Vaduva, 2017). The activities often pick during warmer seasons and dips in the cold seasons. This seasonality discourages investors from continuously investing in the industry.

As illustrated in this paper, the SWOT analytical model is a useful tool for evaluating the macro and micro environment, thus it provides a detailed guide on how best to formulate functional strategies. In spite of its simplicity of application as evident with its application in the hospitality industry, its shortcomings include the risk of subjective analysis.




Arif, T. M. H., & Hossin, M. Z. (2016). A comparative analysis of internal and external environments between Hotel Hyatt, UK and Hotel the Cox Today, Cox’s Bazar, Bangladesh. IOSR Journal of Humanities and Social Science, 21(6), 13-22.

Baum, T., & Hai, N. T. T. (2020). Hospitality, tourism, human rights and the impact of COVID-19. International Journal of Contemporary Hospitality Management.

El-Sawalhy, H., & Farid, M. B. (2017). Hospitality Industry Development via Scientific Research: SWOT analysis. Journal of Association of Arab Universities for Tourism and Hospitality, 14(2), 133-139.

Gürel, E., & Tat, M. (2017). SWOT analysis: a theoretical review. Journal of International Social Research, 10(51).

Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis-based SWOT analysis. International Journal of Information Management, 44, 194-203.

 Takacs, J., & Vaduva, S. A. (2017). A swot analysis of the global hospitality industry. Revista Economica, 69(6).

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