SWOT ANALAYSIS

Indian Hotels Company Ltd.

------------------------------------------------------Executive Summary:
The organization operates within the larger framework of the external environment that shapes opportunities and poses threats to the organization. The external environment is a set of complex, rapidly changing and significant interacting institutions and forces that affect the organization's ability to serve its customers. Environmental scanning is a concept from business management by which businesses gather information from the environment, to better achieve a sustainable competitive advantage. To sustain competitive advantage the company must also respond to the information gathered from environmental scanning by altering its strategies and plans when the need arises. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. The Indian Hotels Company Limited (IHCL) and its subsidiaries are collectively known as TAJ Hotels Resorts and Palaces and is recognised as one of Asia's largest and finest hotel company. It is one of Indias oldest service band owned by Tatas, which is nearly 100yrs old. Value and luxury is associated with this brand. Its target segment is Luxury loving and high income group. Its USP is LUXURY. This study is an attempt to study the strategies adopted by TAJ HARI HOTEL, identify the opportunities and threats for Taj Hari Mahal in the market, and analyse its strengths and weaknesses.

Statement of Objectives:
 To identify the strategies adopted by Taj Hari Mahal.  To identify the opportunities and threats for Taj Hari Mahal in the market, and analyse its strengths and weaknesses.

Introduction to SWOT Analysis:

MEANING: An important part of any strategy planning would include identifying the environment and understanding its aspects in a holistic sense. A scan of the internal and external environment is an important part of the strategic planning process. SWOT analysis is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is widely used technique through which managers create a quick overview of the companys strategic situation. It is based on the assumptions that an effective strategy derives from a sound fit between internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firms strengths and opportunities and minimizes its weaknesses and threats. It helps provide direction and serves as a basis for the development of business plans. It accomplishes this by examining the strengths (what an operation does well) and weaknesses (what an operation does not do well) in addition to opportunities (potential favorable conditions for an operation) and threats (potential unfavorable conditions for an operation). Once completed, the SWOT analysis can help determine if the information indicates something that will assist the operation in achieving its objectives (a strength or opportunity), or if it indicates an obstacle that must be overcome or minimized to achieve desired results (weakness or threat). The SWOT analysis provides

information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection. SWOT analysis came from the research conducted at Stanford Research Institute from 19601970. The background to SWOT stemmed from the need to find out why corporate planning failed. The research was funded by the fortune 500 companies to find out what could be done about this failure. It all began with the corporate planning trend, which seemed to appear first Du Pont in 1949. By 1960 every Fortune 500 company had a 'corporate planning manager' and 'associations of long range corporate planners' had sprung up.

Subject of SWOT Analysis:

WEEKNESS: Disadvantages of proposition-Gaps STRENGHTH : Advantages of propositionCapabilities-Competitive advantages-USP's (unique selling points)-Resources, Assets, People-Experience, knowledge, data-Financial reserves, likely returns-Marketing - reach, distribution, awareness-Innovative aspectsLocation and geographical-Price, value, qualityAccreditations, qualifications, certificationsProcesses, systems, IT, communications-Cultural, attitudinal, behavioural-Management cover, succession.
in capabilities-Lack presence of and competitive strengthReputation, known reach-Financials-Own deadlines and

vulnerabilities-Timescales,

pressures-Cashflow, start-up cash-drain-Continuity, supply chain robustness-Effects on core activities, distraction-Reliability of data, plan predictabilityMorale, Processes succession. commitment, and leadership-Accreditationscover, systems-Management

OPPORTUNITIES:
Competitors' trends-Technology

Market

developmentsor lifestyle

THREATS: Political effects-Legislative effectsEnvironmental effects-IT developments-Competitor intentions- various-Market demand-New technologies, services, ideas-Vital contracts and partners-Sustaining internal capabilities-Obstacles faced-Insurmountable weaknesses-Loss of key staff-Sustainable financial backing-Economy- home, abroad-Seasonality, weather effects.

vulnerabilities-Industry development and

innovation-

Global influences-New markets, vertical, horizontalNiche target markets-Geographical, export, importNew USP's-Tactics - surprise, major contracts, etcBusiness and product development-Information and research-Partnerships, agencies, distribution-Volumes, production, economies-Seasonal, weather, fashion influences.

The basic SWOT process is to fill in the four boxes, but the real benefit is to take an overview of everything in each box, in relation to all the other boxes. This comparative analysis will then provide an evaluation that links external and internal forces to help your business prosper. The internal strengths and weaknesses, compared to the external opportunities and threats, can offer additional insight into the condition and potential of the business. Once all strengths,

weaknesses, opportunities, and threats of operation have been listed, the information should be combined so that strategies can be developed. TAJ HARI MAHAL: (Jodhpur)

Taj Hari Mahal: At a Glance

Close to both the airport and the railway station, the Taj Hari Mahal, with the largest convention centre in Jodhpur, offers elegant venues from the ornate Amar Mahal Hall with its awe-inspiring chandeliers to the tastefully appointed boardrooms. You can treat your guests to unique theme dinners that celebrate the culture and cuisine of the region. It spreads over six acres of lush, landscaped gardens; this palace of the 21st century offers luxurious refinement. With its Marwar style architecture and Moghul-inspired domes, enameled murals, slender columns, and grand interiors, this is design that lives up to the fantasy. It offers various products and services. Accommodation There are 93 rooms including 3 suites. All the rooms have a tea and coffee maker, mini bar, safe, colour TV, direct dial telephones, colour television with satellite programs, channel music, hair dryer and dial up- wireless internet access. 48 Superior Garden Rooms

 42 Superior Pool Rooms 3 Executive Suites The Superior Garden Rooms, charmingly ethnic and comfortable, offer a view of the hotel's landscaped gardens. Interconnecting rooms are available on request. The Superior Pool Rooms, charmingly ethnic and comfortable, offer a view of the swimming pool. Inter connecting rooms available on request The spacious Executive Suites have a sitting room with wooden flooring and a master bedroom that leads out onto a stunning jharokha with a pleasant view of the shimmering blue pool. The bathrooms have bath tubs with individual shower cubicles. Restaurants & Bars Marwar, the multi-cuisine coffee shop with a Marwari theme, serves buffet breakfast, light snacks, lunch and dinner. Live ghazals and sitar performances in the evenings enhance the ambience. Good Earth, the Chinese speciality restaurant, serves an array of authentic Chinese delicacies. The Courtyard, a charming restaurant with a European ambience, serves Mediterranean specialities. Barbeque, the specialty restaurant, serves the choicest grills and kebabs. Verandah Caf, an extension of Marwar, is open for breakfast, lunch, light snacks & dinner. The caf opens to the pool deck that is a venue for live performances of Rajasthani folk dances & puppet shows The Bar serves a choice of spirits, wines & exotic cocktails. The bar also serves imported tea/coffees and cigars. Taj Hari Mahal also offers a variety of exotic venues and theme dinners for gala evenings and dining. Pal Haveli, Meherangarh Terrace Jharokha Theme Dinner,

 Marwar Terrace Theme Dinner, Champagne Brunch at Chessboard Lawns, Poolside Romantic Theme Dinner The Jhalamand Castle Theme Sand Dunes Dinner Experience Village Safari Meal Meherangarh Terrace Gala Banquets The hotel has 5 meeting rooms that can accommodate between 30 and 500 guests. The maximum conference and banquet capacity for one event are 200 and 600 guests respectively. Services & Facilities Airport Transfer on request Astrologer on Call Baby-Sitting Arrangements Barber Shop Beauty Salon Business Centre Business Facilities Car Rentals Currency Exchange Driver Dormitory Facilities for the Physically Challenged Health Club Hotel Safe Internet/Email/Fax Facilities Laundry Services Library Lounge Luggage Storage Medical ServicesDoctor On Call Parking Postal/Parcel Services Room Service Shopping Arcade Travel Desk -Ticketing, Tours The Health Club has separate facilities for ladies and gents. It has a steam room, massage room, beauty parlour and gents salon, hot and cold shower, yoga room. Specialized massages including a Swedish massage, balancing massage, lymphatic massage, aromatic massage, back massage and back scrub are offered. The well equipped gymnasium has a cardio vascular treadmill, stepper, cycle, weights. Recreational Activities Complimentary Cricket - Lawn Croquet Darts Folk Music performance Gym Hard Court Tennis Indian Classical Music performance Jogging Track Lawn Badminton Lawn Volleyball Netball in the pool Pool Polo Pool Table Puppet Show Swimming classes Swimming pool with Jacuzzi Table Tennis Yoga and meditation Recreational Activities- on payment

Bingo Cookery Workshops Cocktail Making Workshops Food Craft & Carvings. Kitty Party Kids Activities Activity Centre complimentary Board Games Bread Craft Card Making Workshop Collage Workshop complimentary Crayon Creations complimentary Entertainment with Music complimentary Face Painting Workshop Flower Making Garden Football complimentary Kanche (traditional game) complimentary Kids Garden Equipments Sightseeing City Tour (half day) to Mehrangarh Fort, Jaswant Thada,Umaid Bhawan City Tour & Shopping to Mehrangarh Fort, Jaswant Thada, Umaid Bhawan, Sardar market, Clock Tower and Nai Sarak Osian Sand Dune Village Safari

SWOT Matrix has been plotted below:

Strengths:
 Well established brand image since last 100 yrs.  USP- Luxury  Niche target segment (luxury loving & high income group)  Strategically placed in Jodhpur  Personalised approach in service  Skilled employees with high morale  Efficient inventory management  High degree of adaptability to changes  Local Events with a mixture of rich heritage culture of Rajasthan  New innovative ideas- Jodhpur RIFF, Marwar Theme, EARTH, and Yoga retreat, etc.  Greater emphasis on peripheral services.  Customers feedback system (CFS)  Tie-ups with airlines, cellular and credit card companies.  High financial back up  Strong promotional activities  Demand-supply gap  Increase in market share  Well conceived functional area strategy  Regular training programmes  Less number of competitors in Jodhpur.

Weaknesses:
 Issues related to internet connectivity  High fixed cost  High storage cost  Loosing on profits due to low occupancy  Off-season blues  Internal security & unrest hamper tourist arrival

Opportunities:
 International best practices  Increase in disposable income  Change in customers habits, taste, and preferences  Open sky benefits  Growth of tourism industry  Governments support for tourism industry  Surprise packages

Threats:
 Government regulation with respect to tourism industry  Fluctuation in international tourist arrival rate  Terrorism  New emerging international brands  Event risk  Retention of key staff

 Poor

facilitated

airports,

inadequate

road

infrastructure, high taxation levels and a bureaucratic visa processing system.

An overview of the SWOT Matrix shows a very favorable position for Taj Hari Mahal, Jodhpur. The hotel has immense strength to make most of the opportunities. There are weaknesses but they do not negate the strengths or the ability of the organization to have substantial growth. As the weaknesses show the Organization is very new in the city and is at a nascent stage. One of the most favourable factors for TAJ HARI MAHAL HOTEL is its brand image, brand awareness and high brand recall. These factors have played a major role in building up its position. According to them hotel stays innovation in peripheral services rather than core services, therefore they lay greater emphasis on peripheral services. The demographic and geographical location of TAJ HARI MAHAL HOTEL is of great advantage to them and when linked up with opportunities of change in habits, tastes and preferences of customers can bring to them a huge chunk of revenues and profits. The employees and staff of TAJ HOTEL are skilled and demonstrate high morale. They even have personalized approach towards service and demonstrate high degree of ability to change. These strengths can be utilised in curbing the high storage cost and fixed cost. The skilled employees can work efficiently in this direction.

LOCAL EVENT coloured in rich diversified heritage culture of Rajasthan can be conducted during off season blues in order to attack foreign tourists. In this way they can recover on losses due to low occupancy. TAJ has always tried to come up with new innovative ideas from time to time, like JODHPUR RIFF, Marwari Theme and specially Yoga Retreats which provides the customers incredible experience, greater emphasis on innovative ideas and seizing in the opportunity of increase in disposable income and change in lifestyle and preferences of customers will not only increase the overall profitability of TAJ but would also help in countering the competitive advantage of the competitor. TAJ Hotel can address to the threats of increasing Terrorism and Event Risk by laying greater emphasis on peripheral services and activities, as they are already doing that they can work upon refining them. By adopting international best practices and efficient utilization of existing resources they can definitely make an attempt do away with the threat of fluctuation in international tourist arrival rate. There effective customer feedback system (CFS) and tie-ups with airlines, cellular and credit card companies has enhanced their market share. Initiating reward programmes for staff and employees will help retaining them, thereby will reduce and can even eliminate the threat of retaining key staff. If we observe the responses of the consumers well find that 100% of the respondent stated that they are aware of the TAJ HARI MAHAL existing in Jodhpur and all of them have visited TAJ atleast once. This response demonstrates that they have high brand recall and awareness. The number of services that delighted the respondent is more than the services which disappointed them, this show a favourable position for TAJ HARI Hotel. By improving on these disappointing services they efficiently cater to the needs of the customers. TAJ HARI follows a Premium Pricing Strategy and Differentiation Strategy; where value is associated with its brand name, they provide unique experience to their customers. People are attracted towards TAJ because of the luxury associated with its brand name and people who love luxury dont mind paying for it. TAJ HARI MAHAL HOTEL considered BALSAMAND and

PARK PLAZA as there major competitor in Jodhpur. They have devised various strategies to withhold the competition. Firstly, they are well established brand with VALUE associated with their brand name. Secondly, laying more emphasis on peripheral services, thirdly, coming up with new innovative ideas, fourthly, and venturing into areas which have not yet been taken care of by them. After analysing the Strength, Weaknesses, Opportunities and Threats- we can identify and plot the strategies adopted by them: Opportunities

(Growth/offensive Strategy)

Weaknesses

Strengths

(Defensive Strategy)

Threats S-O Strategy: TAJ HARI is currently following growth strategy or offensive strategy by utilizing its strengths to address an opportunity against it major competitor in Jodhpur i.e. BALSAMAND and PARK PLAZA. W-T Strategy: TAJ HARI is following defensive strategy and taking some corrective action to eliminate and minimize the weakness of internal security so as to minimize the threat of Terrorism.

Conclusions:
An important part of any strategy planning would include identifying the environment and understanding its aspects in a holistic sense. A scan of the internal and external environment is an important part of the strategic planning process. Environmental Factors have a major role to play in the performance of a business organization and thus Environmental Scanning, Appraisal and Analysis has a major role to play in strategy formulation. SWOT Analysis is a significant tool as it helps combine internal and external environmental factors to provide an overview of the business scenario and help formulate the appropriate strategies. It provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. After conducting the SWOT analysis of TAJ GROUP OF HOTELS we can identify the current position and performance of the orgainsation. These strengths, weaknesses, opportunities and threats will help to formulate appropriate strategies for the organisation. There is huge potential and definitely there is lot of revenue in the Hospitality Industry, and TAJ HOTELS have the requisite strengths to milk the opportunities before it. It has almost unbeatable competitive advantages, huge potential and high growth rates. It is a well established brand with values associated with it since last 100 years. It provides incredible and unforgettable experience to its customers which become a sweet memory for them. It has lots of opportunities coming in its way which if explored bring them to the ZENITH. Various strategies have been adopted by them from time to time in order to retain their customers and maintain their brand image, like Premium price strategy, differentiation strategy, strategy muse, sustainability strategy, product up-gradation strategy, growth strategy and many more. If they harp upon the opportunities available in the environment along with the utilization of their existing strengths they can minimize their threats and weaknesses. TAJ HARI needs to focus on inventory management, and aggressive promotion to enhance its business and claim them self as a leader in the untapped market of hospitality industry, simultaneously expanding into wider international markets for holistic growth.