Hilton Hotels SWOT Analysis
The SWOT analysis identifies the weaknesses and strengths as well as the opportunities and threats for Hilton Hotels in efforts to improve its global competiveness.
Strengths at Hilton Hotel
Hilton has over the years relied on employee motivation as a way of retaining best talents and minimizing turnover rates that are common problems in firms operating in the industry. Through offering employees an opportunity for personal and professional growth by organizing training and development programs and offering attractive remuneration, employees are committed and dedicated to sustain long term success of Hilton Hotels. Lower employee turnover and higher retention rates are among the strengths that have helped the company successfully penetrate international markets. Hilton has an experienced technical team that has the capability to enhance innovativeness to improve customers experience from upgraded business processes. Consumers in the global market are increasingly concerned on the ability of firms to improve their accessibility and convenience of products such that they would want to engage with firms that have capacity to continuously improve technological capabilities. Hilton through its qualified technical personnel improves flexibility with which customers make bookings and ensuring that an interactive internet platform is in place for 24 hours to serve customers better. Good reputation in the industry is a key strength for Hilton as customers, investors, suppliers and governments are willing to be part of operations of Hilton. The company has eliminated reputational risks with major focus on ethical business practices that conform to effective corporate governance strictures.
The communities in which Hilton operates in are key to boosting reputation of Hilton since they are aware of the corporate social responsibilities undertaken by the company to improve their welfare.
Weaknesses
A weakness of the company is brought about by the fact that federal policies and industry regulators place emphasis on the need for the firm to comply with various rules and regulations. The tight policies on ethical practices are among factors that put a lot of scrutiny on the operations of Hilton. The fact that Hilton focuses more on its domestic markets in US limits its success in case of economic downturns in the local market. Late international expansion is also a weakness since expansion plans could find some of the markets already saturated.
Opportunities for Hilton in the industry
There is high potential from emerging markets that are experiencing economic growth and are increasingly aware of the need for democracy. This implies that Hilton could successfully penetrate such markets since it has the economies of scale advantage that prevent other firms from entering target markets. The Indian market is particularly a central focus with a growing population, higher number of middle income earners and the fact that it is becoming a hub for global business. Digitalization and better use of technology also add up to the opportunities since Hilton could capitalize on technological advancements as a way of enhancing flexibility when interacting with customers and ensuring that consumers are assured of superior products and services.
Threats Hilton faces in the industry
While Hilton may have the intentions of penetrating global markets such as India, it is also clear that there are other big companies such as Marriott International, Starwood Hotels and Resorts and Accor Hotels with sights on the new markets. Such competition leads to price wars such that while Hilton may be focused on charging premium prices for the product and services offered, other international brands could opt for low prices services and products as a way of luring customers from Hilton. Economic and political disturbances are major threats for Hilton. Incidences such as the financial crisis that hit Europe are destructive for the business as they lower profitability during such periods. Political instability and insecurity affect Hilton Hotels greatly since incidences of wars disrupt the entire operations of the business in unstable territories. The increasing cases of terrorism are also adverse for Hilton since they put the lives of customers and employees at risk thereby limiting successful global operations.
Sources of competitive advantage for Hilton Hotels
Hilton utilizes the aspects of economies of scale, accessibility and convenience for customers, reputation and innovativeness as key to maintaining its global competiveness. The success is attributed to the fact that human resource at Hilton is dedicated and committed to improving the Hotels reputation through superior products and services to customers. The way employees are treated and dignified is key to making Hilton earn global awards as the best employer thereby making stakeholders like consumers and suppliers willing to establish long term relations with the company. Hilton Hotel identify the need for unique designs in its products and services as well as capitalizing on information technology as way of linking with travel agencies, booking sites that enhances convenience and accessibility to the company’s offerings. Reliance on effective information technology creates superior guests experience that in turn establishes and maintain customers’ loyalty. Hilton through its multiple global branches also enjoys its competitive advantage through economies of scale where it eliminates threats from new firms and smaller companies that may want to lure customers through lowering prices. The fact that Hilton has a larger customer base implies that it is able to provide services at lower costs while still managing to be profitable unlike other firm that would suffer losses if they tried to compete using cost leadership strategies.
Business Risks faced by Hilton
Data privacy is becoming a major concern for Hilton Hotels where malicious individuals are keen to exploit vulnerabilities in the information system to alter or steal financial and personal information of employees, customers and the organization. The fact that Hilton has a larger database for its guests create the need for enhanced protection of addresses and payment details to assure customers of the efforts made in enhancing privacy and confidentiality. The other risk is that fact that some guests may behave unethically thereby creating a poor perception among other customers and in some cases leading to Hilton incurring expenses in lawsuits. Such actions damage the reputation of the firm since there may be poor reporting from the media that in turn leads to varied views for the global consumers. Security is becoming a major risk for Hilton with rising issues of terrorism posing threat to employees and customers as well as to the business premises. The fact that terrorists attacks happen at any time an anywhere with hotels being soft targets create the need for Hilton to consider having effective security measures capable of detecting suspicious guests and preventing attacks on employees and guests. Political instability especially in undemocratic nations pose risk to the operations of Hilton since wars are a threat to the lives of employees and consumers as well as well tourists who are part of the customers for Hilton.
Strategies and options available to Hilton Management to cope with global business risk
As a leading global hospitality company, Hilton through its Enterprise Risk Management department needs to consider key options to maintain its global competitiveness. The first step is to improve security of customers and employees from cyber and terrorism risks. Ensuring data privacy could be achieved through reliance on upgraded information system and using informing security tools to ensure financial and personal details of employees and customers are safer. Regular audits and reviews are necessary since they help the company identify vulnerable areas and the progress made towards protecting its information systems. On the issues of terrorism, the management has to consider training employees on ways through which they could detect suspicious guests and report such situations to the relevant authority. It is also appropriate that the company puts in place security measures including effective surveillance systems that monitor actions of guests. Hilton’s management has to be careful on the territories it penetrates to avoid incidences of disruption from political instabilities. It is imperative that Hilton’s management focuses on carrying out risk analysis capable of assessing the long term stability of a nation before making the decision to penetrate such markets.
References
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