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Hilton Hotels Case Study

A. Introduction

Your introduction should have three parts:

1) A statement of the strategic marketing issue being addressed in the case

2) Your answer or response to the issue

3) A brief explanation of how you will provide proof to substantiate your answer or response

b. Body

Develop ideas that will help to develop a new marketing plan to overcome the marketing issues presented in the case study. These ideas should address each of the 4 P's.

c. Conclusion

Sum up how you provided proof to substantiate your answer or response to the strategic marketing issue being addressed in the case.

This is a group project so if you primarily focus on the B portion and could include references that would be great

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Hilton Hotels Case Study

Introduction

The scope of this situation analysis is to address important strategic issues and opportunities for the Hilton Hotels as well as to discuss the Four P's marketing strategy and recommended alternative solutions based on these. This study will also incorporate the use and implementation of a SWOT analysis throughout the discussion along with providing information from secondary resources which will support existing opportunities for Hilton Hotels.

In the early 1990's, Hilton Hotels decided to expand its business into gambling. This shift in marketing strategy came about after and may have been the result of two major takeover attempts. This decision, which would cause Hilton Hotels to profoundly change its business operations, was viewed as an aggressive move by the hotel giant. Although Hilton Hotels Corporation owned, managed and franchised hotels, casino-hotels and inns before this change, its focus had been on its hotel holdings and all the side businesses that it generated such as the sale of furnishings, equipment and supplies to hotels, motels, and inns and operating a computerized reservation system for the hotel industry (Hilton Hotels Case Study, Year?). The SWOT analysis that follows highlights Hilton's strengths, weaknesses, opportunities and threats that Hilton should have considered before making its move into the gambling industry.

SWOT Analysis

Strengths

Brand Recognition - Hilton's brand is well known and the hotel chain has a good reputation as a leader in the hotel industry.

Diversification of Products - Hilton has more than just hotels in its product line. The company also generates revenue from gaming and entertainment (Hilton Hotels Case Study, Year?) Because it is involved in more than one industry, Hilton benefits from drawing on one part of its business if another part becomes less profitable. Gaming, entertainment and hotels serve different .customers' needs. While this diversity does not automatically ensure success, it does allow the company to balance its profits across three areas of the business.

Conducting business in more than one geographical location- Hilton Hotels has establishments in Nevada and across the world in such places as Queensland, Australia and Istanbul, Turkey. The company also has gaming establishments in New Orleans, Louisiana and Windsor, Ontario, Canada. If Hilton had its hotels in only one place, such as New Orleans before Hurricane Katrina, its entire business could be devastated by one environmental hazard. Hilton is hedging its risks by spreading its business across several economies worldwide. This allows Hilton to withstand losses if its hotels in Australia, for example, were sustaining substantial losses, the company could count on its US, Turkey, and other markets to generate enough revenue to help even out its losses (Hilton Hotels Case Study, Year?)

Weaknesses

The Hilton Hotels Operating Management underestimated customers' needs considering the information they had from their employees. The management team at Hilton should have given more consideration to the cultural demographics, and values of gaming customers. In addition, the team should have given more consideration to the domestic and global customers that enjoyed Hilton's hotel services. Basing their market forecasts on the assumption that, if the majority of the Hilton Hotel customers feel comfortable with the hotel service environment that would lead to additional guest satisfaction and new business could lead to inaccuracies in the forecasts (Hilton Hotels Case Study, Year?).

There appeared to be an inadequate level of innovation of fundamental growth planning for the Hilton Hotels Corporation. There is an unbalanced revenue mix that is unequally spread across Hilton's operating segments. For example the gaming activities accounted for 85.1 percent of total revenues, hotel revenues contributed 14.9 percent during 2004 (Data Monitor, 2005). When the economies of scale are in recession, this could impact the profitability of the Hilton Corporation.

The lack of geographic spread in the Hilton's revenues is a major weakness for the corporation. For instance, there is an abundant level of spread in the European market, more specifically the United Kingdom. This region accounted for 86.6 percent of Hilton's total revenues. Since the slowing of the economy, this has affected Hilton. By contrast, the American and Asian markets ...

Solution Summary

This addresses important strategic issues and opportunities for the Hilton Hotels as well as discusses the Four P's of the marketing strategy and recommended alternative solutions based on these. It also incorporates the use and implementation of a SWOT analysis throughout the discussion along with providing information from secondary resources which will support existing opportunities for Hilton Hotels.

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