These Properties are either franchise owned or are operated by independent operators by Hilton. The brand focuses on premium pricing strategy thus catering the high profile business class and upper class of the society. It uses a differentiating strategy to make it promising for its customers. With its various brand offering Hilton positions itself in diverse portfolios :. Brand recognition and brand trust are most essential for the player in the hospitality industry to flourish.
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- Hilton SWOT Analysis - Research-Methodology!
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Hilton as a brand over the years has been successful in making trust among its customers. Use of Technology : The Hilton Honors application has been utilized 19 million times for Digital Check-in since its inception, a rate of one million times each month. Hilton keeps on scaling its Digital Key innovation , with visitors ready to utilize their cell phone as their room key at 1, lodgings today.
Amid its — ownership for, Blackstone Group sought after a system of expanding the brand reach through franchise based operability, while moderately couple of new properties were really operated by Hilton. Subsequently, the extent of franchised rooms developed altogether amid this period. This strategy of franchising is quite popular in the hospitality industry among most of the players, as the parent organization does not need to pay for the support and overhead expenses of franchised properties.
Franchisees have to maintain strict brand standards to maintain a licensing agreement with the brand. Hilton features as 54 th position on Forbes top brands list and at 9 th position on the top regarded company as of June The brand competes on factors such as brand name , its quality services, and accommodation. The Hotel business has turned out to be imperative in the previous years because of tourism business opportunities growing across borders.
The industry not just assumes an essential part in the life of individuals however and in addition the economy of the nation. Industry over the years has also seen tremendous development and advancement of technology, thus it is important for every player in the industry to be promptly keeping up to date. Strong Free Cash Flow — Hilton has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Weighted SWOT Analysis of Hilton Worldwide Holdings
Strong distribution network — Over the years Hilton has built a reliable distribution network that can reach majority of its potential market. Good Returns on Capital Expenditure — Hilton 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.
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. Days inventory is high compare to the competitors — making the company raise more capital to invest in the channel. This can impact the long term growth of Hilton Not highly successful at integrating firms with different work culture.
As mentioned earlier even though Hilton is successful at integrating small companies it has its share of failure to merge firms that have different work culture. Financial planning is not done properly and efficiently.
The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present. Investment in Research and Development is below the fastest growing players in the industry. Even though Hilton 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.
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. Hilton has to build internal feedback mechanism directly from sales team on ground to counter these challenges. High attrition rate in work force — compare to other organizations in the industry Hilton has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees. Opportunities for Hilton — External Strategic Factors New trends in the consumer behavior can open up new market for the Hilton.
Hilton Worldwide Holdings SWOT Analysis Matrix [step by step] Weighted SWOT
It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines. 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.
SWOT analysis of Hilton Group
This should open a window of opportunity for Hilton in other product categories. 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 Hilton.
In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics. The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Hilton to increase its profitability.
The new technology provides an opportunity to Hilton to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions. Opening up of new markets because of government agreement — the adoption of new technology standard and government free trade agreement has provided Hilton an opportunity to enter a new emerging market.
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Lower inflation rate — The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Hilton. As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world. Liability laws in different countries are different and Hilton may be exposed to various liability claims given change in policies in those 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. New environment regulations under Paris agreement could be a threat to certain existing product categories.