Global Business Strategy
Case Study About a Famous Hotel Brand Chain
Global Business Strategies are generally designed to enable an organisation to achieve its objective of international expansion and development. It focuses on three different areas such as global, international and multinational. The current research project is based on global business strategies of an organization which is operating its business in international market such as Hilton hotel. It is one of the leading organization of UK which is providing its hospitality services to local and international customers of different countries. There are number of factors which influence business operations and performance of the company. The current research will focus on internal and external analysis of the organization. Further, it will also shed light on importance and nature of Corporate Social Responsibilities (CSR) of organization in international market.
There are number of techniques which can help in conducting environmental analysis of Hilton hotel. Environmental exploration includes examination of internal and external situation of the company. Environmental audit is the best techniques for analysing and diagnostic the whole environment of Hilton hotel. Internal or Micro environment can be examined by Organizational audit and stakeholder analysis. Stakeholder analysis is appropriate for this reason because it helps in determining needs and requirements of stakeholders and organizational responsibilities towards them. Relative importance, power and interests of each stakeholder can be easily determined by this technique. Using this techniques Hilton hotel can develop strong relationship with national and international stakeholders. Overall, stakeholder analysis is important method for analysing micro environment of Hilton hotel in effective manner.
But, on the other hand, for analysing macro environment Hilton hotel needs to use different methods such as Porter’s five force model and Pestle analysis. In which Porter’s five force model helps in determining position of the organization in front of existing competitors. In contrast, Pestle analysis plays very significant role in determining different factors which can influence the performance of the company. Along with this, organization needs to consider all these factors which at the time of developing strategies for managing national and international activities of the organization. PESTLE analysis includes analysis of different factors related to the Hilton hotel such as political, economic, social, technological, legal and environmental attributes. Overall, stakeholder and Pestle analysis are important tool for examining micro and macro environment of the Hilton hotel respectively.
It is appropriate method for determining external and internal stakeholders of Hilton hotel which may influence business activities. Analysis has reflected that customers, employees, suppliers and government are considered as major stakeholder of Hilton hotel.
It is one of the important stakeholders which has direct impact on financial stability of Hilton hotel. Qualitative services is one of the major need of customers of Hilton. So, for satisfying this need Hilton hotel offers customized products and services to its customers. In addition, Hilton hotel uses Electronic CRM system for developing strong relations with customers which also help in determining customer’s expectations.
As per the analysis of the organization it can be said that employee turnover of Hilton hotel is high. It has reflected that employees of the organization are not satisfied with their job. Along with this, it has also reflected that Hilton hotel id\s providing appropriate facilities to motivating and encouraging employees. But, communication gap between management and staff affect their satisfaction level. So, Hilton hotel needs to focus on employee satisfaction.
For satisfying needs and requirements of supplier Hilton hotel needs to provide appropriate payment to suppler on timely basis. Along with this, Hilton hotel also develops regular communication with suppliers for managing demand and supply of raw materials.
Hilton hotel communicates financial performance of the company to respective government of the nation. It helps them in developing different decisions regarding tax payment and others. Therefore, stakeholder analysis has reflect ted that Hilton hotel has developed strong relation with government of each nation in which operates it business.
It is an important tool for analysing macro environment of Hilton hotel. It helps in identifying number of factors which can affect global business operations of Hilton hotel in positive and negative manner.
Political situation of different nations such as UK, US and others parts of the world affect the hospitality services of Hilton hotel. Rate of terrorism is increasing in developing countries it has negative impact on tourism which can decline the overall performance of hospitality industry of these nations. In addition, EU has introduced various rules and regulations for UK organizations which may influence the business activities of Hilton hotel.
National and international macroeconomic situations and different monetary factors which have direct influence on sales and revenue of Hilton hotel. For example, national and international events raise the probability of increasing customers and sales for Hilton hotel. In contrast, instable economic condition of countries and fiscal and monetary policies influence the financial position of Hilton hotel. So, at5 the time of developing global business strategies organization needs to focus on all these economic factors.
Hilton hotel is one of the favourite destination of tourists and shopping lovers. But there are number of social attributes which may influence hospitality services of organization such as customers’ needs and requirements, current trends, demographic inofmt6rioan of customer, buying behaviours and growth rate of population, etc. For example, in developing countries population is become high which increases the number of customers for Hilton hotel.
Technological advancement in catering industry has great impact on Hilton hotel. These technologies raise the use of cost and reduce energy requirements. Sometimes technological advancement helps in improving quality of hospitality services but on the other hand it may have negative impact on technical investment of the organization. Along with this, changes in marketing technologies and latest techniques such as social media marketing, digital marketing and website development also augment the marketing budget of Hilton hotel.
There are number of legislations related to customer, employee and competitors which may affect the activities of the organization. Along with this, legal issues associated with the global business can also influence the performance of Hilton hotel.
Hospitality industry is generally criticized for environmental pollution which may reduce the number of tourists for particular country. But, on the other hand, natural disasters in different countries where Hilton hotel is operating its business may also affect the financial and overall performance of Hilton hotel. Along with this, for improving overall performance Hilton hotel needs to focus on sustainable development of the company (Chang, 2009).
International business environment is very complex, interdependent and dynamic. It has positive and negative impacts on Hilton hotel. There are some major aspects which may affect the business of Hilton hotel at international level such as cultural differences, CSR policies, political differences and environmental issues and globalization, etc. for managing business at international level manager of Hilton hotel needs to find balance between social responsibility, corporate image and competitive strategies. At international level competitors of the global hospitality market decline the number of customer, sales and revenue of Hilton hotel. Similarly, Use of technology in business is different in each and every nation so, it also affects the technological investment and quality of services of Hilton hotel in international business. At the international level many of the domestic markets are not free from cultural diversity which may affect the services of the Hilton hotel. At present Global e-business is increasing day by day and hospitality organizations are suing this technique for attracting tourist. Global e-business strategies of international competitors of Hilton hotel reduce the scope of business expansion and financial performance. But, on the other hand, international business environment raise the business expansion opportunities for Hilton hotel by which organization can expand and start new hotels and restaurants in other countries also. Along with this, labour cost in developing nation is very low which decline the total cost of hotel services of Hilton hotel. So, it is also considered as one of the positive impact on international environment on Hilton hotel. In addition, legal rules, regulations, tax policies of different nation influences financial performance of the Hilton hotel. So, organization needs to analyse the international environment in effective manner.
Globalization increases free trade, movement of labour, growth of multinational companies, integration of global trade cycle and communication and barriers for business. All these factors augments benefits, opportunities and challenges for Hilton hotel which are described as under:
Globalization increases growth of free trade between more than two countries which reduces the cost and prices of products and services for customers. It leads sales and financial performance of Hilton hotel. Along with this, due to the high movement of labour in international market reduce the labour issue and cost for Hilton. Globalization raise the purchasing power of customers which increase the economy of the scale of hotel Hilton.
Due to globalization, Hilton hotel can target national and international customers which helps in raising business performance of Hilton hotel. In addition, globalization raise the opportunity to adopt new and latest technologies for improving service quality. In addition, expansion of the business in different countries is also considered as important opportunity for Hilton hotel.
Managing cost of globalization is one of the major challenge for international business because globalization increases the cost of environment, labour drain, culture diversity and tax and interest payments, etc. In addition, understanding needs and requirements of \customers of different culture is also a big challenge for Hilton hotel. Along with this, managing competition and high investment in technologies are also considered as major problems of business in global market.
Hilton hotel is operating its business in more than one country so, it can produce products and services in those countries which have lowest opportunity cost. But, it is operating its business in hospitality industry so, Hilton organization cannot export the finished goods and services in different countries but it can use the trade transactions for the raw materials for the different main services of the organization. It reduces the total cost of the hotel services.
Movement of labours in different countries helps Hilton hotel in getting skilled and experienced employees. Hilton hotel hires number of employees from foreign and local market for understanding needs and requirement of tourist of the different nations. Sometimes i9t raise the labour cost for the organization.
Hilton is adopting new technologies of each and every nation which helps in attaining competitive advantages in international market. This factor of globalization helps in improving the quality of hotel services of Hilton hotel. But on the other hand sometimes it raises the technical cost of Hilton hotel.
Each and every organization follows different structure in international market which are described as under
In this type of structure organization creates a base on the basis of different function and activities of the company such as Production, human resources, design and customer service are typical functional units, etc. All these functions are organized by a centralised system and different individuals have a responsibilities to manage these function in international market. Example: British Airways.
Some international organizations develop their new divisions in different others countries without disrupting the organization in their home market. It is an effective structure for generating high profitability in both local and international market.
It is one of the important structure which h include combination of both functional and operational level. In this type of culture foreign staff members report to local managers for their function and work. It helps in managing business operations in local as well as international markets.
The current research project has concluded that global business strategies of Hilton hotel has helped in operating its business in international market. Research has also described that political, economic, social, technological, legal and environmental factors influence business operations and performance of the company. Study has used Stakeholder analysis and Pestle analysis for examining internal and external analysis of the organization. It has also described that Appropriate CSR policies and business ethics help Hilton hotel in operating business at global level and attaining all opportunities of globalization.
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