Hilton hotels and resorts expansion strategies to foreign markets
(2018), the US firms recorded an average increase of 17% in their overseas investments in the last century. The US-based members of international franchises reported that 52% of their members have expanded their respective units in foreign companies (Arasli, Alphun, & Arici, 2019). The main pull for the aggressive expansion in new international markets is the expanded base of potential customers. For example, despite the large population and market in the US, it only accounts for 5% of the total global population. Expansion to the global foreign markets therefore enables companies to target the expansive global customer base. This notwithstanding, Hilton Resorts and Hotels is developing effective strategies to succeed in its quest to generate more profits and increase shareholder value by expanding to foreign markets. To efficiently penetrate different new markets in the global hotel and hospitality market, the company should deploy the following strategies; External Factor Evaluation Matrix detailing the opportunities involved in the expansion to new markets.
Opportunities Weight Ratings Weighted Cost Increasing purchasing power for consumers in developing countries 0. 34 Partnership with tourism companies 0. 26 Increasing demand for high end exceptional hotel and accommodation services in developing countries 0. Assessing of macroenvironment: There are several countries that are attractive for international expansion and no single company can have the resources to enter these international markets simultaneously. Based on this fact, companies must prioritize on the most strategic countries that can ensure maximum profits with minimal risks. Similarly, Hilton Hotels and Resorts can also apply macroenvironment assessment to determine countries with significant market opportunities and low risks. Macroenvironment assessment help in selecting and ranking priority countries based on the level of risks and opportunities involved (Wang, Qu, & Yang, 2019). Market opportunities in a country are determined based on the country`s real GDP, purchasing power and the general growth market size.
Additionally, the cost focuses on the expansion to fast growing markets such as South Africa, Egypt and other growing countries in Asia and Africa. Strategy Activities 1. Fostering partnerships $10,000 2. Micro and Macro Assessment $15,000 3. Social media promotion and advertisement $5,000 4. The company can also participate in various exhibition forums where it can identify partners that can assist them in undertaking the aggressive global market penetration. Additionally, the company can use the different online and social media platforms to conduct due diligence on their potential local partners. Conducting market research and due diligence will result into beneficial local partners that will help the company in optimizing the economic value of their market expansions. Fostering effective partnerships will help the company in aligning their operations in new markets to their core values and the company`s vision.
• Hilton Company can also implement their market expansion strategies by directly engaging with their target markets in the priority countries. 12% N/A Figure 2a. Key Financial Ratios Table of the Agenda for proposed Actions The below table represents the proposed timelines for proposed actions Proposed Actions Timelines Market research and due diligence June to August 2019 Macro and Micro Assessments September to November 2019 Deal negotiations and franchising agreement December 2019 Franchising and partnership in specific countries March 2020 Figure 3: Table of the Proposed Actions Annual Objectives and Policies To sustain the existing market competitive advantage in the new market, Hilton Hotels and Resorts apply the following annual specific objectives and policies. • Build updated data analytics in the analysis of the market data to improve the quality of decisions and management strategies of the company • Undertake market research and analysis on a quarterly basis to determine changes in customers` preferences and emerging trends within the hospitality industry.
• Deploy a balanced score card in reviewing the performance of the company on an annual basis. • Undertake employee performance evaluation and appraisal to motivate high performing employees and encourage other employees to meet their targets. • Selecting the strategies that are strongly aligned to the company`s overall visions and goals • Undertaking brainstorming exercises to determine the best ways of implementing, the role of every stakeholder in the implementation of the strategies, and the required budgets for implementation. • Developing effective key performance indicators for performance evaluation and analysis. • Developing a review strategy and methods for improvements and modification. References Arasli, H. , Alphun, C. Conroy, R. M. , & Yemen, G. Hilton: Tru to its Brand?. Hua, N. Khan, H. , Yusuf, M. D. , Hakeem, A.
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