Hilton worldwide is one if the famous hospitality multinational companies of America that controls or manages the portfolios of other resorts and hotels. Conrad Hilton founded the company in the year 1919 and now Cristopher Nasseta is successfully managing this corporation. It contains different fourteen brands across the international market segments. In the words of Mister Nasseta, in the quarter and a full year, performance was successful in meeting the expectations and the Hilton hotel had continued to enhance the developmental activities by approving the new rooms which are 106,000 in number. The business also contributed to the net growth above 45000 rooms. As the Hotel completes its spin offs, it is now considered as a capital efficient business and also a fee based. With the completions of its spin offs in the year 3rd January, 2017, it got a common stock from Park in exchange of five shares of the common stocks of Hilton and also received a share of common stock of HGV in exchange of Hilton’s stock of ten shares. The financial status has increased in the field of franchise and management by two percent in comparison to neutral basis of currency compared to the period of 2015 (Dudovskiy 2017). During the year of the year 2016, Hilton opened more than 300 hotels which is consists of fifty- thousand room. Financially Hilton continued its success by approving thirty-five hotels. In the year 2017, the collections of tapestry by Hilton hotel also launched fourteenth brand also offering the travelers with the choice for hotels with the growing segments. The strategy of the Hilton hotels is to maximize the cost and efficiencies in scale, sharing the best practices, keeping pace with the change of market trends and intelligence. Along with these provisions, the hotel ensured to provide to each hotel the affordability (Alon, Ni and Wang, 2012). The Hotel now has focused on increasing the share of the market and also has aim to deliver the market beating scales. It’s key competitors are Marriott International, Wyndham Worldwide corporation, Park Hotels and Resorts, Great Eagle Holdings Limited and many more. Hilton in order to make pace with the marketing strategies, they need to follow some guidelines to make their firm stronger in this competitive market (Hilton.com 2017; forbes.com 2017).
Analyzing the market structure
Pestle Analysis of Hilton Worldwide
PESTEL is a way to analyze the strategic marketing structure on the basis of political, economic, social, technological, environmental provisions and legal factors. The potential ability to analysis Hilton’s hotel’s market growth is based on this particular way of PESTEL analysis.
Political : For any Hospital industry the most important factor which can ensure its stability is the political factors. These factors have the ability to invite a number of visitors. These have a powerful influence on the visitors visit to the country (Wang, Chen and Chen 2012). However, the political instability can affect a this influence (Robinson et al. 2016). For example, a political situation in Northern Ireland could underestimate the visitors in that particular region for some safety purposes. To top it, In UK with the growth of terrorist attacks and the act of terrorism might also affect the visitors visit to the country and can left a huge impact on the Hilton company’s financial growth. Hilton Company has got also involved in lobbying so that it could carry the ability to influence the political provisions to a great extent on the business. It has also been determined that the company has involved in spending more than 1.5 million in USD dollar for the last four years in terms of lobbying (Hilton.com 2017; forbes.com 2017).
Economic: The economy of the country also leaves a powerful impact on the growth of the Hilton hotel or any other hospitality or tourism industry. International and National situation based on macro economy have also left a good impact on the hotels and resorts of the Hilton company (Robinson et al. 2016; Ferrelle and Hartline 2012) .For example: At the Olympic times, in the year 2012, most of the resorts and hotels were filled up with the terrorists and this lead to the growth of financial status of the company in return. However, during the global financial and economic based crisis in the year 2007- 2009, the sale of the same hotels suffered a setback to 20 percent. However, still the national economic growth of the United Kingdom can also be affected due to the inflation and currency rate after. These authentic factors might also affect the economic stability of the Hotel as a whole. The performance of the Hilton hotel from the financial perspective might get affected in the same sense (Hilton.com 2017).
Social: Travel and Tourism industry is regarded as one of the most important sectors in the field of economy. Hilton Hotel’s performs well in the field of providing hospitality to the visitors. And also try to meet the needs of the customers. On the other hand, the demographic changes also play a vital role in order to determine the value of the hotels (Robinson et al. 2016, Dobbs 2014). In UK as the VISA got strict for the other countries, this in turn m might affect the smooth flow of currency in the country (forbes.com 2017; Ferelle and Hartline 2012) .The Hilton Foundation Community also intends to serve the community as a whole, which in turn adding incentives to its social responsibility (Hilton.com 2017).
Technology: The Technological factors facilitate the applications of the Hilton hotels. The apps provide the different room facilities including paying and booking. It has hotels across more than 78 countries and the businessmen are considered to ne the regular users of this app (Hilton.com 2017) The facility of using Wi-Fi and even the visitors also have the capacity to earn points such as car rental and air tickets booking. These are the provisions for the visitors if they choose to travel next time. Technological facility also includes, how faster the internet is and accordingly the hotel set up the easier process to download apps for the visitors who are visiting their hotels. These Applications have extended to more than 650000 apps (Hilton.com 2017; Dobbs 2014).
Environmental factors: Usually the hospital industries of the country are blamed to pollute air for their increase in carbon emission. This in turn damages the environment (Leonidou et al. 2013; Hu and H H S. 2012). The increase in carbon emissions is also enhancing the global warming. However, the Hilton Hotel faced tight regulations in order to reduce the level of carbon emissions. Therefore, the hotel accepted the fact and created organizations which could decrease the pollution in the air (Halbe 2013). At times, the natural disasters could be taken into consideration for hampering the structure of the hotel industry.
Legal factors: Legal factors are also one of the important factors which could affect the financial status quo of the Hotel’s economy. In certain countries due to the tightening of the strict immigration rules, specially United Kingdom, USA and the other EU countries, it limits the arrival of the visitors which in turn the flow of currency is getting reduced for the other hospital and tourism industry. Legal factors actually leaves impact on the company indirectly as a result.
VRIO analysis of Hilton Hotel
The question of Value states that whether the available resources of the hospitality sector is capable of mitigating the external threats. The resources of the hospitality sector is considered to be both strength and weaknesses of the firms and accordingly the Hotel utilize it to make its position better in the market place. The resources of Hotel consists of Real Estate, owners, Restaurants, employment, Business resources, technology, attendants, food and beverages, sales and marketing and many more. These are the elements which also determine the position of the hotel and how it is benefitting the visitors visiting the hotel. However, Hilton hotel shares a good prestige in the position of market (Rothaermel 2015). Although the weaknesses could include the single owner of the hotel as one of the resources along with high rates might be taken as one of the weaknesses of the Hotel. At the same time the Hilton hotel also needs to keep in mind its competitors, Marriott hotel which can substitute Hilton Hotel’s market position (Dobbes, 2014) Other than these, from the words of the tourists the technological support was quite helpful and the staffs are attentive in their mission of serving the tourists (forbes.com 2017)
Question of Rarity of the resources: Having a rarity in a industry could make the position of the industry in the market place powerful enough to compete with the other industrial firms or sectors (Routharmel 2015).The availability of the wireless internet charges make the Hilton hotel stand out of the crowd in the market place. Another most unique thing that Hilton hotel shares in the United States of America is the visiting places are near from the hotel and it covers only the walking distance. From the technological point of view, Hilton introduces digital key and the digital check in room selection and digital check out of the room. While questioning the rarity, the company should be clearer about its available resources and firms and also its strategies (forbes.com; Travel and Tourism Industry 2017)
Question on imitation: The question on imitation includes whether the firm has the capability to make beat the other firms on the availability of unique products and environment (Routharmel 2015). The uniqueness of Hilton Hotel involves the brand recognition, it also focuses on the loyalty of the customers the capital cost is high. The presence of Hilton garden, presence of double tree provides a unique framework to the hotel. However, both Marriott and Hilton hotels are in the competition with each other and both the hotels are ahead in respect to the economic scale (forbes.com 2017). These unique identification of the Hilton hotel, making the market quite powerful in the market place.
Question on organization: Once it becomes possible to k now it’s capabilities, uniqueness and it’s availability of the resources, it becomes possible for the business owner to understand by judging the market place that whether the company has the capability to explot and uses the resources according to the needs of the company, which could in turn provide advantages to the position of the company (Routharmel 2015; Travel and Tourism industry 2017). Hilton hotel at most of the times utilized its resources and made a good position in the market (forbes.com 2017).
Value Chain analysis of the Hilton Company
The analysis of the value chain in respect to business activities indicates The value of competitive advantages for the business. The business activities are divided into primary activities and support activities. Under primary activities, as depicted in the picture has inbound logistics, operations, outbound logistics, marketing and sales and services
Inbound logistics: The management of the supply chain of the Hilton and inbound logistics is a way that make the Hilton hotel is made to deal directly with the suppliers, which made the hotel to negotiate with distributors on handling delivery and warehousing (Gerefii and Fernandez 2016; Forbes.com 2017).
Operations: It consists of segments of 146 hotels which are owned by Hilton Worldwide and in the segment of management and franchise, The Hilton hotel franchised 4000 hotels with 530000 rooms. Time share segment has the provision for properties which are 45 in number. This particular segment is attached with operating resorts and also membership of timeshare. It is also engaged in marketing and selling (Gerefii and Fernandez 2016; Forbes.com 2017).
Outbound logistics are the activities which are required to give the output to the customer. It is engaged with competitive advantages such as high standards of service, transportation (Gerefii and Fernandez 2016; Forbes.com 2017).
Sales and Marketing: the sales of the Hilton worldwide comprises of bookings in terms of business, travels and travel agencies and conventions. In 2015, this logistic has yield the company about the increase in seven percentage comparatively better than the other years. This also encourages the customers to return to the brand to earn points (Gerefii and Fernandez 2016; Forbes.com 2017).
Service: A service of higher quality is one of the competitive advantages. The customer of Hilton Company can speak more than ten languages. They could be reached by twitter and other social media (Pritchard and Howard 2015).
The support activities include Infrastructure, Human resource Development, technological development and procurement
Infrastructure: Hotel Hilton is the international hotel and its one of the objectives is to meet customer’s expectations. Therefore, the hotel focuses on service, amicable atmosphere, cleanliness and proving comfort to the tourist. It also has efficient system to manage the other performances (Gerefii and Fernandez 2016; Forbes.com 2017)
Human Resource Development: Hilton provides training to the management and frontline workers to become professional in their field. It has expects such knowledgeable people to execute the job and they are also expected to attend job training programs (Gerefii and Fernandez 2016; Forbes.com 2017). The hotel also provides rewards to the workers.
Technological development: Hilton worldwide provides web technology to improve the satisfaction of the customers by providing customer service instantly. It provides apps, wi- fi connection and also helps the customer to book tickets for travelling ( Law et al 2013) The customers also have digital key to enter room of the hotels..
Procurement: To talk of Hilton company, its claim of requirement for its suppliers are considered to be higher (Gerefii and Fernandez 2016; Forbes.com 2017) However, this process should be initiated to be selective about its suppliers and they must be friendly and they should not be engaged in unethical practices.
Porter’s five forces analysis of Hilton hotel
Rivalry amongst the existing firms: The Hilton faces involves in competition with Marriott, Hyatt regency, Renaissance and many more other premium sectors. Hilton experiences a huge growth in income in the various fields of its profession in the field of competition (Dobbs 2014; Forbes.com 2017).
Bargaining power is low for Hilton’s suppliers: It has the capacity to purchase more than 3000 suppliers. However, the bargaining power is low as the uniqueness of the Hilton hotel lacks in its products (Dobbs 2014; Forbes.com 2017). There is also no switching supply of cost in most cases for Hilton. Hilton runs a program and according to this program it is giving an extra ground for suppliers who are socially diverse in nature than the other suppliers.
Threat of substitution in products or services: Substitution can happen when the visitors who would like to stay in their relative’s house for a stipulated period of time. It also faced with substitution such as video conferencing for this would reject the need to travel in other places and instead the tourist can stay in hotel (Dobbs 2014; Forbes.com 2017).
Threat involving New entrants: The threat of new entrants is low. Still some of the barriers in terms of entrance could incorporate the famous brand recognition of the Hilton hotel worldwide, the cost of capital which is high, Hilton also involves the customer loyalty (Dobbs 2014; Forbes.com 2017).
Bargaining power for buyers: The bargaining powers of the buyers in the Hilton hotel is high. The international and national visitors are sensitive to the change of price. However, the switching cost is low. The buyers can bargain on the products they are buying (Dobbs 2014; Forbes.com 2017).
SWOT analysis of Hilton Hotel
SWOT can analysis Hilton’s position right now and the strategies and its implementations in future.
Strengths: Hilton hotel has a huge scope of business. It involves effective way of retaining customers along with a strong portfolio of doing businesses. It is lead by under the effective and strong leadership by C. Nasseta and the proper use of technological processes to meet the needs of the customers (Hollensen 2015; Forbes.com 2017).
Weaknesses: However, the Hilton hotel is hugely dependant on United States of America. It is overburdened with much debts. Despite having a eminent brands, it involves in a little international share of the market (Hollensen 2015; Forbes.com 2017). There is a single owner of Hilton hotel.
Opportunities: Hilton hotel looking for the opportunities to expand its market worldwide, It is focusing on the strategic methods to share it’s market share through the process of research and development (Hollensen 2015; Forbes com 2017).
Threats: There are threats for Hilton hotel which includes the threat of terrorism in the country along with a huge changes in the level of macro economy. While selecting it’s suppliers, the Hilton worldwide should take into account that the suppliers are not involved in any unethical issues. The threat also involves a loss of talented people from their sectors (Hollensen 2015; Forbes.com 2017).
Ansoff matrix to analyze the strategy of Hilton Hotel
The Hilton Hotel was successful in making an entry in the different markets through the supply of a greater range of products and also helpful in providing services at an affordable price. The products incorporate the benefits and the rewards which are provided at the hotels. After making an entry, the company focused on the growth of new availabilities and also concentrated on the betterment of their performance in the market. However, on reaching this stage, now Hilton Hotel has the capacity to approach any new markets to accordingly improve their products for either existing or new markets. Hilton has acquired well in terms of hospitality (Hussain et al 2013). The main strategy of this company is to prove itself the best among the different competitors. As a result, Hilton launched two important programs which would pay rewards to the customers and membership privileges program (Kleimbaum and Stuart 2014). These are the important marketing strategies of Hilton Hotels to attract visitors in their hotels. These are the main innovative strategies of this tourism sector (uni-muenchen.de 2017; ).
Mckinsey model to analyze the Hilton Hotel
This model focuses on the other seven elements which focuses on the practice of business which could be implemented accordingly to bring effectiveness to the workings of the company (Singh 2013).
Strategy: The strategy that Hilton follows in order to make its market strategy strong is the combination of communication and technological services. It always focuses on merging the experience of the customers with the customer’s views about the hotel (Da Silve and Trkman 2014; Forbes.com 2017).
Structure: The organization of the Hilton worldwide has a structure which consists of 14 brands which is serving nearly 140 million guests in the year 2015. With time it has also increased. It’s business has three divisions: managements and franchise, timeshare and last but not the least ownership (Da Silve and Trkman 2014; Forbes.com 2017).
Systems: The business of Hilton incorporates various systems on a wider range such as recruitment of employment, customer reservation and services, evaluation of performances and many others. The coordination is proper among the system in this aspect (Da Silve and Trkman 2014; Forbes.com 2017).
Shared Values: Values of the Hilton hotel focuses on the systematic delivery of the experiences to the guests. They believe in cooperation and understanding of the guests and the operations should be done in the sense of discipline and met the needs of the customers (Da Silve and Trkman 2014; Forbes.com 2017).
Staff: The training is provided to the staff who would going to work in the Hilton Hotel. Accordingly, they are now successful in meeting the customer needs. The staffs also know ten different languages to deal with the customers of different nationalities (Da Silve and Trkman 2014; Forbes.com 2017).
Skills: Hilton hotel goes in search for the talented people to meet their demands in the professional and management activities and also in various businesses. It might include marketing. Manufacturing and HR development practices (Da Silve and Trkman 2014; Forbes.com 2017).
Style: Hilton follows proper style such as avoiding conflicts with the customers, providing beautiful technological benefits to the visitors (Da Silve and Trkman 2014; Forbes.com 2017).
Suitability: Hilton hotel has proved to be suitable hospitality industry while providing perfect customer needs, fulfilling the technological innovations to the customers and business man (Agnihotri 2013). From the marketing structure and competition, it has made a good position as a competitor. It supplies products in the form of rewards to t customers so that they come back again.
Acceptability: The stakeholders in the Hilton Hotel are national, international and global. The branding partners such as Hilton Cornard hotels, Double tree by Hilton hotels have successfully achieved their aims to flourish the tourism sector. At the same time, as Hilton is spreading all over the world by the contribution of the global investors, it is fulfilling the objectives of the international stakeholders (Newsroom.hilton.com, 2017).
Feasibility: The resources of the Hilton hotel are also enable to meet the marketing strategy and the customer satisfaction. The staffs, the sales and marketing and many others are feasible enough to make a name in the market.
Sustainability: In this world of competitiveness, despite having a low share in the market, it has abled to reach a position with its marketing strategy (Agnihotri 2013; Masseti 2012) One of the top competitors of the Hilton hotel is the Marriott hotel, therefore, to make its position different in the market position, it is involving the different stakeholders in order to sustain the competition. Innovative ideas of rewards and many more were incorporated in this particular sector (Newsroom.hilton.com, 2017)To top it, to meet the demands of the customers also remained the high priority for the Hilton Hotel.
After critically analyzing Hilton Hotel, it would be rationale to recommend that the Hotel is emerging well in its project works as it is endorsing many national and international stakeholders. However, the debt burden of this hotel is quite high which falls under the weaknesses. Therefore, the Hilton Hotel must be responsible enough to pay the debts or else in long run, it might affect it’s market strategies. The stakeholders are gaining enough from the profit rendered by the company (Manetti and Toccafondi, 2012). However, on the other hand, the stakeholders need to be careful enough if anyway the company meets a setback in their position. Therefore, by judging such possibilities it is important for the stakeholders to give their share. At the same time, low switching cost should be modified with good market share in the market (Ellis and Sharidan 2014).
Thus, on a concluding note, the Hilton company in this topic was critically examined. The description of this hotel has been done on the basis of different analytical tools which in further described the marketing strategies of the Hilton company. The position of the market structure was also analyzed accordingly. Hilton company’s profit is going up with time as it spreads its branches globally. Therefore, in this respect, the benefits of the stakeholders and the company’s benefit also lies on making new strategies and meeting the customer’s needs efficiently.
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