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The Hilton Group of Hotels UK
Conrad Hilton established Hilton Hotel Corporation. In 1919, he acquired his first hotel in Cisco, Texas (Cathy, 2010). In 1925, the first hotel which carried name of Hilton was started in Dallas. Hilton hotels became the first coast-to-coast series of hotel in America in 1943, focusing on the service of business consumers. Hilton hotel first went internationally in 1949 through starting a branch in Puerto Rico. Till 2000 Hilton had more than 500 hotels in world. Hilton Hotels Corporation is identified in the world. As an important lodging hospitality corporation, presenting customers and guests the finest services, accommodations, amenities and value for leisure or business, Hilton presents the quality and amenities its name has motivated since 1919. The corporation is an important franchisor of hotels. Presently the Hilton is observed one of the service business's top competitors (Nick, 2011).
One set of marketing definitions suggests that marketing is primarily a business philosophy that puts the customer first. From this perspective, the primary goal of hospitality businesses should be to create and retain satisfied customers. This concept proposes that satisfying customers' needs and wants should be at the centre of an organization's decision-making process (Armstrong, 2001). Professional marketers believe that this customer focus is the responsibility of everybody in the organization. Adopting this philosophy requires a total management commitment to the customer, and companies that pursue this approach can be described as having a customer orientation.
Early definitions of marketing centered on the exchange/transaction process. Kotler (2000) proposes that in order to satisfy people's needs and wants, products and services are exchanged in mutually rewarding transactions generally, but not exclusively, using the monetary system. Kotler originally suggested that this exchange process, now known as transaction marketing, is a core concept in marketing, and is a ‘value-creating process which leaves both parties better off than before the exchange took place'. Another set of definitions suggests that marketing is a management process aimed at delivering customer satisfaction. Examples of this approach include the definitions offered by the Chartered Institute of Marketing, and the American Marketing Association. Relationship marketing is the development of mutually beneficial long-term relationships between suppliers and customers. In hospitality markets, a ‘relationship marketing' approach has seen the major hotel groups focus their marketing activities upon frequent travelers in an attempt at encouraging repeat and recommended business.
Microenvironment of Hilton Hotel
The micro-environment comprises of stakeholder groups that a company has common dealings with. The style these connections expand can impact the quality, costs, and general achievement of a business (Cathy, 2010). There are different issues in the micro-environment like:
Different patients in their last days can reveal it complicated to define their uneasiness from constipation. Normally they implement the word, "I'm not feeling right" as the constipation can enhance and mimic the common weakness connected with progressive sickness. If patients are not able to define their complications, the observations and opinions of their carers or families must be performed into account, especially if they are linked in intimate care of patients.
The management structure of the company is formed with managers in the different departments working towards the same objective. They are in control of planning, organizing, leading and controlling the organizational resources. Hilton International functions 403 hotels, with some 261 branded Hilton and 142 under the Scandic brand of mid-market. Under a corporation contract, the North American based Hilton Hotels Corporation and Hilton International share liability for the Conrad brand, which contains 17 hotels in 12 nations (Belch, 2008). A worldwide marketing coalition between Hilton Hotels Corporation and Hilton International develops the number of hotels functioned through both corporations globally to over 2,700 - over 500 of which are branded Hilton. Hilton International hires more than 71,000 employees in 80 nations. Dedicated to performing trade in a conscientious approach, aim of Hilton is to bring a constructive advantage to the cultures in which it functions through services of high quality, financial development, environmental security, involvement of society and employment.
Connection of suppliers is an essential tool that will permit franchisees, their contractors and designers to observe information of vendor about building, designing, and equipping a hotel. People believe, if utilized, this tool will connect all of the key decision makers and therefore enhance our market for new hotel development. Management of Hilton are pleased to contain different vendors in the Hilton. Over the years they have recognised vendors that have supported their franchisees develop their system to over 300,000 rooms, and they have been recorded as of the exemplary service and great product they have constantly presented (Cathy, 2010).
Obviously customers are important for sales. Managers should observe needs of consumers and attempt to expect how these will grow so that they can meet these demands efficiently now and in the future. To support recognise their consumers, companies are increasingly attempting to collect data on them through systems like loyalty cards. Possible buyers normally have different options and so can be capable to implement their power of bargaining in connection to companies. Hilton has started the modern mobile service to make sure consumers have the excellent potential methods of reservation and controlling accommodation of their hotel, with relieve. "In this digital age it's essential that companies reply to the latest requirements of consumers and now they can give them the expediency to choose and book a hotel, change and access bookings and observe hotel information and images, as away from their computer (Cathy, 2010).
The achievement and approach of any company will depend on the level of competition in its industry. In different markets one company is main. This is known a monopoly. If anyone is in a position of monopoly this can permit that company to use the customer with comparatively high prices and company can be capable to present an inferior service if consumers have no other options. Whereas Hilton concentrated on the casino-hotels, Marriott and Hyatt were developing in the market of luxury-hotels. To keep speed with its opponents, Hilton invested $1.4 billion to modernize older properties throughout the late 1980s (Belch, 2008). Barron Hilton also focused on solving the complication of his father's will. An increasing competition from the other hotel chains such as Marriott and Best Western, as well as a down turn in hospitality industry slightly affected the company's earnings.
To understand the position of the company within the market we can use the SWOT analysis and Porter's Five Forces Model to illustrate its position between its competitors.
Strategy: recognized differentiation strategy.
Structure: decentralized and flat structure.
Style: participative and powerful culture.
Risk of Entry from potential Competitors: the risk of entry from potential competitors is relatively low because of the high initial cost of establishing a hotel business and the fierce competition among the existing hotel corporations.
Threats of substitute products: Hotel Hilton is Small lodges, Business hotels, Boutique hotels, eco friendly hotels (Belch, 2008). But as Hotel Hilton holds a strong competitive advantage of wide range of branches this threat can be considered as moderate.
Bargaining power of the supplier: this can be considered low in terms of hotel Hilton as they have a number of available suppliers for the resources to operate their business. Risk of Entry by potential competitors (L o w) Bargaining power of Supplier (Moderate) Bargaining power of buyer (High) Rivalry among existing established Firms (High) Threats of substitute products (Moderate)
Bargaining power of the Buyer: Hotel Hilton has diversified consumer segment. As the global hotel companies expanding their business rapidly, consumers are getting more opportunities to choose their desired services from different hotels. So the bargaining power of the buyers is quite high.
Rivalry among the existing competitors of the market: Hotel Hilton is now facing hardship to win the battle against its competitors in the global hotel business. Marriott International (MAR), Starwood Hotels & Resorts Worldwide (HOT), Wyndham Worldwide (WYN), Four Seasons Hotels , Accor S.A, are some of the names of competitors of Hotel Hilton (Belch, 2008). So we presume that Hilton has high rivalry with its competitors.
To understand the company further we should consider its Macro environment factors. Macro-environment consists of the larger societal forces that affect the microenvironment, thus conducting a PEST- Political Economic Socio-Cultural and the Technological environment it is operating in. PEST analysis helps the business to strategies their future business perspectives (Cathy, 2010).
The external, environmental concerns that impact the Hilton are:
Political: a steady situation where some impacts capability to produce income.
Economic: the current depression has observed different hotel chains of smaller business-oriented go into insolvency, as they do not have the infrastructure to help under-working properties as the larger series do. Though recovery is starting, it can take some time earlier business travel strategy limits are completely lifted and corporate travel returns to the similar positions of the last three years.
Social: the style about cost efficient corporate travel guides guests of hotel to look additional value for money, which is where our differentiation strategy of added value comes into perform (Cathy, 2010).
Technological: the installation for systems of 'on board' room reservations on certain aircraft will need systems incorporation with the personal reservation system to Hilton. This will need a high level of funds.
Product: better quality services came with through monitory own package, distinguished as of contest character along with the complete brand plan have demonstrated to be a victorious approach producing high levels of repetition business (O'Fallon, and Rutherford, 2010).
Promotion and Advertising: The mainly victorious traditional advertising will be along with the Hilton. The web will as well be utilized in marketing actions. Public relation is deliberately following a new channel for public relation side by side the conventional practices (Abraham, 2010).
Pricing plan has been coherent along with the distinction target, to offer contributed value for a sensible rate as fought to dismissing and assessing their services and products (Abraham, 2010). Room costs quoted are net of service and tax, are every night, every room along with continental breakfast admitted
Conference room costs are net of service and tax, quoted everyday utilization with coffee breaks and tea (2) admitted
Place: service and product detail are sold to the guest through own direct marketing, selling, advertisement and the Internet. Delivery carries comprise of international reservations systems and travel agents.
Future Critical Success Factors
Hilton's immediate competitors are being targeted with the pricing strategy widely known as "Price Commitment", where the effort is to change customer's perceptions and lift sales. However, efforts of reducing the price without decreasing the quality can give Hilton a competitive edge.
The demographics for a diverse business such as Hilton present a broad range of customers. Hilton's target market comprised the regular basis business traveller, leisure travellers, families on vacation and the meeting business segment (Barrows & Powers, 2008). Property, equipment, plant and lease premium prepayment diminished through £94.1m. The main subscriber to the reduction was a £65.7m consequence of exchange causes. The Group as well inducted £15.7m to amend its hotel portfolio which comprised an extra £7.8m on construction of Studio M, a fresh 365-room hotel in Singapore that will start throughout 2010 (O'Fallon, and Rutherford, 2010). The proportion of £8.0m shines the Group's tight managements on capital expenditure.
Hilton's promotional activities are slower than the competitors, thus appealing to a smaller audience. Grammy Vacation Giveaway, 2006 AVP Pro Beach Volleyball sponsor, Hilton Harmony Tour in support of music education, and Hilton Competitive Advantage which markets how the Olympic Team members sleep at specialty Hilton rooms (O'Fallon, and Rutherford, 2010).
International travel specials, Food Network travel packages, Discovery Kids packages, "Romance Packages," and family vacation specials. Online resources to see all Hilton products and in-room amenities including floor plans of personal and group event room as well as weekly email offers, specials, news, and promotions, reservations, travel and entertainment options (Abraham, 2010).
Because an E-business has business and consumer relations in many locations it is that much more necessary to avoid conflict in any of these areas. Hilton Hotels after many years has a name it can be proud of. It has expanded its horizons from a small locale to and international business with a well known reputation. When comparing the policies and procedures between the brick and mortar locations to its applicable e-business Hilton Hotels has simply expanded its possible services to include those persons or businesses who would like to business in a higher paced environment. As such it becomes imperative that the previous guidelines are not ignored. The possibility becomes that much more prominent as Hilton introduces more of an international influence (Brotherton, 2010).
Hilton Hotels have numerous strengths comprising their differentiation strategy, well trained and highly skilled employees and flat structure (Brotherton, 2010). Hilton's weaknesses engage the requirement to communicate with their strategy extra obviously in the exterior atmosphere, Hilton's high worker consider and training requirements as of seasonal variations. An economist, Edith Penrose, explained that various skills and abilities possessed by firms could lead to superior performance. By analyzing the external and internal factors of Hotel Hilton we can develop a strategy which will be valid, consistent and sustainable. Based on our previous data we have figured out some of the main factors which might play important role in terms of building future strategies
Location based competitive advantage: Hilton offers unequalled business, conference and leisure facilities in all the major city centre, convention and airport. This is complemented by the sustained dedication to high standards of quality and service – a commitment which will be recognized by the consumers thus will increase the occupancy rate in Hotel Hilton.
Efficient Human resource Management: Hilton had shown great interest in development of skilled personnel. They conduct training program, awareness program, and adopt several methods to enhance the service quality of its employees. An efficient and effective work force will ensure higher customer satisfaction and higher revenue.
Esprit Strategy: They should aloe their "Esprit strategy" to grow not only from the HR functions but also by other functional units. They can also outsource the operation of the "Esprit club". Eco-friendly hospitality: the current trends of hospitality have changed up to great extent. Travellers and consumers are seeking eco-friendly hotel which may enable a new market segment for Hotel Hilton. If Hilton adopts the sustainable hospitality methods, then they will be able to reduce their operational cost and obtain economy of scale.
Hilton is moreover gradually more depending on the franchisee-based model for development. This allows the corporation to get income without acquiring any further costs to buy real estate and makes hotels. This plan further allows the corporation to focus its attempts towards making a powerful brand in spite of purchasing real estate. Through observing regional and national business styles, Hotel Hilton will be capable to take benefit of chances that will allow development as recognising threats (terrorist attack, SARS) that can impact productivity. Development in the hospitality and hotel business will contain a constant concentration on gaming, international development and applying all sources to encourage its products to possible consumers. By utilizing its competitive strategies along with the effective service of efficient work force Hotel Hilton will be able to strengthen its position at the global hotel industry.
Currently the Hilton is seen one of the top competitors in service industry. Although, Hilton hotels is a very successful company both at their brick and Mortar and their online sites, Hilton would be best served by creating or utilizing online interactive software for training. Secondly, we recommend an expansion into new markets utilizing an e-business marketing guidelines. This will enhance weaknesses found previously. Accordingly a survey of usage online versus brick and mortar will provide additional insight into possible changes in the future. Through studying regional and national industry veers, Hotel Hilton will be capable to carry out benefit of choices that will allow growth whereas naming threats that possibly affect abundance. Expansion in the hospitality and hotel industry will comprise an extended base on gaming, international growth and utilizing media to encourage its products to possible consumers.
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Belch, George; (2008). Advertising and Promotion: An Integrated Marketing Communication Perspective; Publisher McGraw-Hill Australia; ISBN0074717669, 9780074717660. pp 354-358.
Brotherton, Bob. (2010). An introduction to the UK hospitality industry: a comparative approach. Publisher Butterworth-Heinemann pp 161-163
Cathy, A. Enz. (2010). the Cornell School of Hotel Administration Handbook of Applied Hospitality Strategy, Publisher SAGE, 545-555
Nick, Dalton. (2011). Frommer's England and the Best of Wales 2012, Publisher John Wiley & Sons, 412-422
O'Fallon, Michael. Rutherford, Denney. (2010). Hotel Management and Operations. Publisher John Wiley and Sons. Pp 136-138