PEST Analaysis Essay
PEST Analaysis: • Politics. Politically, Hilton puts itself at the center of travel and tourism industry and claims it as the leading and the best hotel. Over the years, the hotel has grown to become a chain hotel or corporation that operates in 80 countries worldwide through acquisition of several chain hotels. In recent years, the hotel has grown to be, as the corporation boasts, one best in the “corporate travel and conference market” and is improving its leisure facilities.It is the corporate policy to support government regulations by providing services such as the use of environmental friendly products and as one of the corporate sponsor for community activities or philanthropic groups.
• Economic. Hilton International operates in 80 countries and the acquisition of chain hotels strengthens the company position in the market. The corporation has recently acquired lodging assets of Hilton Group. This acquisition has improved the corporation assets and franchises from management to services.Taking into account its position in the global market, Hilton Hotel Corporation is rebranding its image to combine its assets into Hilton Group, plc or most famously known as Hilton International.
As one of the Hilton Group, Hilton Hotel of London positions itself strategically in the center of the city economic market, business market, and leisure market. This makes it strong economically. As part of the Hilton International as well, the Hotel has contributed to Hilton Community Foundation, which is an arms-length foundation established by the Group to serve the community in need.• Social. The Hotel claims that “business is pleasure.
” For this purpose, the Hotel provides services to serve both purposes – business and pleasure. To meet the needs of businesspersons and people who are simply looking for pleasure or a combination of both, the Hotel provides services or facilities to meet the need of customers who are staying in the hotel for both purposes or a combination of both. Similarly, being in the center of the economic market, the Hotel is easily accessible to different amenities and other travel entertainment places. • Technology.Technology is one of the important features provided in this Hotel not only as a leader in the global travel industry but most importantly, it is provided to meet the changing in customers’ lifestyle that demand easy contact with people around the world Each room in the Hotel is furnished with technology access such as Internet, television, and radio.
Porter Five Forces Analysis: 1. Supplier Power: As one of the Hilton International and located at the center of the city economic, there is an indication that the Hotel may have the power to drive up the price.Nevertheless, tourism and travel industry is very competitive. In its marketing effort, its product, price, promotion, and place do play significant part in its sales. Therefore, even though the Hotel has the power to drive up the market, it has more tendencies to sell the room at competitive price and emphasizes on the services as its strategy to win the customers.
2. Buyer Power: The Hotel has decided to set its price according to market price and buyer does not have the power to set the price.However, the buyer may have the power to determine the kind of services they need in choosing the Hotel, and what lifestyle they prefer that makes them love to stay at this Hotel. 3. Competitive Rivalry: Travel and tourism industry is very competitive. In order to win over the rivalry, Hilton strategy is to position some of its lower brand hotels in the city surrounding.
For example, Marriot Hotel or Hampton Inn or its other brand hotels. Hilton does not compete with its lower class hotel but it is managed and operated as a unit. 4.Threat of Substitution: Facing the threat from the competitors, the strategy of the Hilton International as a group is to place in every city where the Hilton Hotel is established, several of its low brand hotels. This keeps the Hotel as a whole to continuous earning.
There is no threat of substitution. 5. Threat of New Entry: There may be new entry into this market, and no one can control it. However, with Hilton International market strategy, Hilton still obtain economies of scale. Although the Hilton may not gain profit or customers, its other brands are collecting it for the Hotel as a Group.Question 2-use your analysis task one to produce an opportunity and threat swot analysis of the organisation.
SWOT Analysis: • Opportunity: from the PEST analysis and Porter’s Five Forces analysis, Hilton has greatest opportunity to obtain comparative advantage over its competitors and at the same time, it gains market of scales. The Hotel is strategically positioned, politically, economically. It even considers the demographic and social lifestyle, the need of its customers, which often change according to the change in their lifestyle or may also be a fashion.But this consideration makes the Hotel to become one of the best hotels for businesspersons and travelers. • Threat: The external threat may be small because the Hotel seems to be surrounded by its sister hotels. Internally, the hotel may eventually become one of the monopoly hotel in the country.
Hilton hotels have huge number of competitors surrounding it and have tough competition among them. Question 3-evaluate a service provided by the organisation by making reference to any three of the five charateristics of services(variable, inseperable, intangible, perishable, lack of ownership).Hilton Hotel services are combination of variable, inseparable, intangible, perishable and non-perishable, and ownership. On variability, the services provided are to cater to businesspersons, individuals, combination of both for services such as shuttle to and from the airport, conference room, executive lounge, free internet access. To the individuals, the Hotel provides hair and beauty parlor, gift shop, health club.
To the people in general, there are conference rooms and internet access, restaurants & bars, and different amenities.As part of ownership, the customers are encouraged to support the Hotel management in cases such as environmental/ecological issues and safety protection. Much of the service provided is intangible, something that can only be valued by needs, preferences, taste, and feelings, but some are tangible such as the gift shop where customers could purchase non-perishable items. Question 4-describe how the organisation has segmented (demographic, geographic, psychograph and behavioral) and targeted the customers for a particular service they offer.Make particular reference to its promotion and distribution strategies. Hilton Hotel operates as a chain hotel.
It is the leading hotel surrounded by its six lower brand hotels including Marriot, Regents, Court Yard, and Hampton Inn. The Hotel target market are business people and people who are looking for pleasure or combination of both. The Hotel promotes its self through different distribution channels such as through its own sister hotels and other hotels, restaurants, government establishments, businesses, other organizations, and through travel and tourism industry.For business purposes, the hotel provides not only accommodation for the business travelers but also facilities for their conferences or meetings. As a policy to attract and satisfy the customers, the hotel customizes the varying features of its goods and services to tailor to the uniqueness of the groups or that of the customers. In addition, it speeds its response time by giving customers what they want and when they want it.
To speed the response time, the hotel uses a marketing function that can quickly communicate the customer requests through different marketing channels, produces different materials such as brochures and comment form in anticipation of customers’ demands, and provides information systems that can improves the response time. As a world-class hotel, the Hotel also utilizes the e-commerce to promote its services and other media such as newspapers, magazines, and Internet. Conclusion Hilton Hotels have now implemented latest technology in providing services to their clients in tourism.Their broad vision and sharp leadership had made them to stand ahead of their competitors. There is a constant need to bring change in the environment and offer new opportunities to its client in order to retain their old clients and attract new one.
As they high number of competitions in the tourism industry they will need to re-invent themselves and offer new services and bring new opportunities for their customers. They need to bring a constant change in their environment to compete with the current market. Organisational change will improve their current status and will attract lot more customers.Once their customer base is strong they would easily handle and lead the competition.ReferencesHill & Jones (2001) Strategic Management. 5th Edition.
Boston, MA: Houghton Miffin Kotler, Philip; Armstrong, Gary & Cunningham, Peggy H. (1992). Principles of Marketing. Fourth Canadian Edition.
Scarborough, ON: Prentice Hall Canada Inc. Porter’s Five Forces: Assessing the Balance of Power in a Business Situation. Retrieved November 20, 2007 from http://www. mindtools.
com/pages/article/newTMC_08. htm PEST market analysis tool. Retrieved November 22, 2007 from http://www. businessballs. com/pestanalysisfreetemplate.