International Business Management: A Case Study of Hilton Food Group

This report is a case study on International Business Management of Hilton Food Group. It covers their current international strategy, a suitable new market to enter with supporting evidence and reasoning, and a justified recommendation for the suitable mode of entry. The report also discusses the types of international business strategies and the evaluation of the current international strategy of the organisation.

International Business
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
An Evaluation of the current international strategy of the organisation.....................................1
Give a justified recommendation for a suitable new market to enter with supporting evidence
and reasoning..............................................................................................................................3
Give the justified recommendation for the suitable mode of entry in order to support the
evidence and reasoning ..............................................................................................................6
CONCLUSION ...............................................................................................................................8
References:.......................................................................................................................................9

INTRODUCTION
International business management is the study and awareness of global environment
considering the business which is applied into managing it effectively. It is required for the better
expansion of the business to increase company's reach and gain maximum profit. In this report
the current international strategy of an organisation will be studied. The organisation which will
be used in this report is Hilton food group. Hilton majorly operates as a food packaging business.
It has six factories and their products are mostly found in supermarkets across 14 European
countries. They also have joint ventures in Australia and Portugal with Woolworths Group and
Sonae Modelo Continente. Considering Hilton's operation being widely spread in Europe it is yet
to try their hands in Spain. In this report the current International strategies of the company will
be covered. Then a suitable market for the organisation will be selected and the opportunities
available in the country will be made known(Shirodkar, Strange and McGuire, 2019).A justified
recommendation for a suitable entry mode fro the Hilton food group will be discussed with
evidences and proper reasoning.
MAIN BODY
An Evaluation of the current international strategy of the organisation
International Business strategy
It refers to the thoughts and actions of a company to penetrate into a country that is foreign to
them. This helps the company to focus on the market and segment they are working upon. These
strategies helps a company in building a structure that could help them in the foreign market.
These could be used by the companies to export or import products or services to earn profits.
But the functionality of these strategies always face challenges which are foreign government
regulations, structuring the global logistics, bearing the manufacturing costs of the infrastructure.
International businesses could be of different types and hence, will use different strategies to
excel through the foreign market(Singh and Gaur, 2021). Various strategies will be needed to
guide the operations of business in different markets.
Types of International business strategies
 International: It involves importing and exporting goods while having their headquarters
at the home country. But it still requires them to establish overseas offices and maintain
supply and logistics that is important for their success. The strategies would be different
1

for them than the companies already operating in the country. The international business
are the least likely to change or adapt to the local conditions. They are most likely to do
the production in their home country and sell them in the international market. A very
good example of this are premium bikes companies like Harley or Kawasaki who doesn't
change the prices or the features of their products. Hilton has been operating in almost 14
international markets.
 Multi-Domestic: In this type of business expansion, it operates with a focus on the local
market and have a decentralised structure. These can have their headquarters in the home
and the other country they are operating in. These businesses keep their focus to the
responsiveness on the local requirements in the various markets they are present
in(Otenko and Parkhomenko, 2019). This help them in operating independently with a
minimum interference from the central office. An example of this is Kraft Heinz.
 Global: It works totally different than the multi-domestic. It makes the use of economies
of scale to make their business big. Their focus doesn't differ between the home and the
foreign markets. There can be minor strategy changes required to succeed in various
markets but they usually sell similar products to different customers. Example – Procter
and Gamble always works towards making their business more global by establishing
efficiency in their global brands.
 Transnational: Its working is somewhat a mixture of global and multi-domestic ways.
There strategy is to have a different departments in different markets like separate
research departments in different markets so to keep their focus more deep. The
businesses which has gone transnational works towards balancing their costs and
efficiency. Food chains are known to be using this international business strategy the
most. A company like Mcdonalds could influence their strategies over Hilton to take
different approaches with their products in every market they are present in.
The current International strategies of Hilton
The internationals strategies used by Hilton has helped them in gaining market advantage in the
foreign market. These are based on the customer acquisitions methods and the strategies to
strengthen and develop the business partnerships. These strategies are-
 High investments in knowing customer needs
2

Hilton, while entering into any new market puts their first focus on the customer trends. They
have already done this in the 14 countries they are in and has always found success in it. For this
purpose they used the insights about their competitors' successes and failures. Once the business
is started they have kept working on their marketing and their products by collecting customer
feedbacks.
 Consistently introducing new products on the market
They have been consistently introducing new products in the local and the foreign markets they
operate in order to retain the customer's loyalty and trust that they have built.
 Maintaining safety and quality
Improvement in quality is always needed to keep the reputation in place. Healthy products and
safe marketing is also something they have done in the foreign markets. Things like customer
sentiments are to be kept in mind while making and promoting the food products.
 Expanding their segments
The segment Hilton foods operate in is already very wide since it is in a space where the
requirement will never end. Considering that as an advantage the company are continuously
introducing products which are different and has potential to work in different market.
 Investing in better facilities and and technologies.
Different markets require different technologies to be worked upon and these will help the
company in setting better standards of their products. Better facilities will certainly help them in
keeping their employees happy and reducing the cost of their operation (Shirodkar, Strange and
McGuire, 2019).
Give a justified recommendation for a suitable new market to enter with supporting evidence and
reasoning
 Hilton food group plc. has its presence across the fourteen countries in Europe. Their
products are easily available in the supermarkets of these countries. Company have six
factories which promotes a strong and excellent supply chain in the market. Its joint
venture with other companies plays an important role in the m operations. Company
have joint venture in Australia with Woolworths Group, a retail business and other joint
ventures with Sonae Modelo Continente in Portugal shows company's presence in these
countries. In starting company used to sell beef and lamb meat in packing. After that
when company thought for their initial public offering in 2007, company's worth was
3

valued at 105 million pounds back then, but now company have market capital of
approximately 944 millions. Company is capable of entering into new markets with its
strong brand name and financial capability (Singh and Gaur, 2021).
 The best option for Hilton food group plc. is to start their business operations in Spain,
situated in Southern Europe. There are many reasons for the expansion of company's
business operation in this country. It is a common thing that starting a branch of business
in new country is not easy. There should be suitable environment and resources which
should suit the business. As per statistics, Spain's population in 2020 is 46,754,778
which indicates there is a large market for the company (Worldometer, 2022).
According to the population, packed food industry is one of the most growing sector in
the economy of Spain. During the COVID – 19 , demand for packaged food has
increased tremendously which results in hike in sales of packaged food and still going on.
 Gross Domestic Product (GDP) also plays an important role in setting up business in the
particular country as GDP gives information about the size of an economy and how well
is an economy doing. A country's fiscal policies, monetary policies and taxes are
modified or created by policymakers according to the GDP based on contraction and
expansion in the economy. According to the statistics, Gross Domestic Product of Spain
was 1425.28 billion US dollars in 2021, representing 1.07 percent of world economy
(Trading Economics, 2022). It is a perfect sign to set up their business in Spain for
Hilton food group plc. Also Spain is the second largest economy in the Southern Europe.
 Barcelona, Madrid, Valencia, Seville, Malaga are some best cities to start the business of
packaged food items as population of these cities is perfect for business. As Spain is
advanced and developed country and Hilton food group plc. uses automated and
robotised food processing, packing, and logistics facilities which makes that country
more suitable for smooth flow of business operations. Hilton group supplies a massive
product range such as meat products, seafood etc. with a great quality and shelf life.
Products supplied by the Hilton group is an necessity, having high demand throughout
the year and also products which are suitable for people of Spain.
4

 Nowadays, due to changing trends and lifestyles more and more people are shifting
towards vegetarian and vegan lifestyle. This gives Hilton food group a massive advantage
to make a move towards expanding business in Spain because Hilton food group is
already selling vegan products in the markets of other countries. As the demand for plant
based products are increasing in the industry, more companies are coming to this market.
 The knowledge of business is a key consideration for any business while entering into
any new market. It is not just for the international business but for the local as well.
Whether the company is into manufacturing or are just providing services, the knowledge
is never not useful. For entering into the international markets the knowledge is not only
required for the business but for also the area where the business is going to be operated.
For Hilton entering into Spain will require insights about the culture and the preferences
of the customers (Otenko and Parkhomenko, 2019). The food choices of the products will
be different yet predictable for them since they already have the experience of operating
in 14 countries in Europe. They recently have opened their businesses in Portugal as a
joint venture. Spain is a neighbouring country of Portugal and there many Spanish
speaking people living in Portugal too. With the knowledge they have gained from that
partnership it might be the perfect reason to get into Spain, a country which loves
diversifying their food options ( Dinu A.M. 2018).
 The Hilton foods group have found successes in their effective supply chain operation.
Also they have the experience of operating in 14 already established business with
different set of working procedure suitable according to the country. Maintaining the
supply chain is important for any business to stay effective for a long time since the much
of the cost requirement happens while supplying and operating. For a business present in
the food manufacturing segment, it is required that their products are present in most of
the supermarkets present in Spain. Some recommendations for the better supply chain of
Hilton would be to -
a) Getting connected with different suppliers
Different supplier groups will help the company in taking their reach to the maximum stores and
in turn, to the customers. This will also help in controlling the supplier's bargaining power and
understanding the area better through the suppliers experience in the local business.
b) Strengthening relationships with the employees
5

It is important for the company to be patient and have strong relationships with the employees
since their involvement will be as key as the suppliers' involvement is. Employees, in a good
spirit will be able to contribute in a better way to the customers and the suppliers and could be
very important in building the trust in the country.
c) Using the strategies the competitors used
For any new entrant, whether experienced or not will need to learn from the successes and the
failures happened in the past. Their to be competitors who have successfully managed to peak
themselves in supply chain can be a good influence to the company in the succeeding
(Kozlenkova and et. al., 2021).
Give the justified recommendation for the suitable mode of entry in order to support the evidence
and reasoning
There are different kinds of suitable mode of entry which can be used in order to enter
into the new country which has been defined into the following manner:
 Exporting: It basically refers to the direct sales of goods and services into another
country and also the best known method in order to enter into a foreign market and also
has the lowest risk as well. It is also cost-effective in terms of nature as the individual
does not need to invest into the production facilities in the chosen country and also all
the goods are produced in the home country which has sent to the foreign countries for
sale.In the near future, it has been observed that the rising transportation costs also likely
to increases the cost of exporting as well (Kozlenkova and et. al., 2021).
 Licensing: It also allows another organisation in the target country to use the property
into right terms. The property which is in question which is into the intangible terms such
as production techniques, trademarks and patents as well. The licensee has to basically
pay the fee in order to be allowed the right to use the property. It also requires investment
into small amount and can also provide the higher returns on investment. The licensee
will also take care of any marketing costs and manufacturing costs in the foreign market.
 Franchising: It is mostly similar to the licensing in that intellectual property rights which
are sold to franchisee. It has been observed that rules for how the franchisee carries out
business are very strict in terms of nature as well. For instance, any process must be
followed or particular components which must be used in manufacturing (Borl and et. al.,
2018).
6

 Joint Venture: It basically consist of two companies which has been established into a
jointly owned business. It has been observed that one of the owner will be a local
business. The two companies has further provide with the management team and also
shares the control of joint venture. There are different kinds of benefits of this kind of
venture which allows the benefit of local knowledge of the foreign market and also
allows to share the costs as well.
 Piggybacking: It basically include two non-competing companies who works together in
order to cross-sell the other products and services in their home country. As it is a low
risk method which involves small amount of capital and also there are certain companies
who are not comfortable with this kind of method. It also include the higher degree of
trust and also allows the partner company to take higher degree of control over in which
manner the product is marketed on the international level (Chung and Ho, 2021) .
These are the main modes of entry which are into suitable terms in order to support the company
into positive terms. It has been recommended for the Hilton Food Group Plc that they can use
franchising mode of entry in order to enter into the new market into successful terms. They are
trying to enter into America country where businesses have to properly follow all the rules and
regulations as well (Yan Zhang and Van Den Bulcke. D, 2018). It is that mode of entry which is
mostly similar to the licensing due to which it is easier for them to understand the significance of
this kind of mode of entry. There are certain advantages of franchising mode of entry where it
provides the business which they have received from the franchisor. Franchisee is the method
which contribute into context of brand recognition and when the business starts from the initial
level then it has to build the brand and customer base as well. Franchising is the option which
has lower failure rate than solo business and also it has the another benefit who has sheer size of
the network. The network of franchises has the opportunity in order to purchase goods at a deep
discount by buying in bulk (Purba, Fransisca and Joshi, 2021).
It has also another benefit that when Hilton Food Group Plc has tried to enter into
America country through this mode of entry then it sees the higher level of profits than the
established business into independent form. There are most of the franchises who have
recognisable brands which brings customers in droves. When Hilton Food Group Plc opens the
franchisee into America country then it has been observed that starting the business has higher
level of risk. So in the overall manner, it is the best way of taking entry into new country by
7

Hilton Food Group Plc. That's why this is the best method which can be used by the organisation
to take entry into the country of America (Wall, 2022) (Çelik and Büyükbalcı, 2020).
CONCLUSION
The above stated report concludes that international business management plays a very
significant role at the organisational level. It has been concluded that there is current
international strategy which needs to be used by the organisation so that they can stand strongly
into this competitive market. It has been determined that there are certain recommendations for a
suitable new market to enter which help the organisation in order to expand themselves into
positive manner. It has been observed that there are certain recommendations which are for a
suitable entry mode to use which has certain kind of evidences that contribute from the
perspective of growth and development. So in the overall manner, it is important at the
international level to have proper management of business so that execution level becomes
smarter and effective as well. That's why management of business is very significant at the
international level in order to achieve objectives and goals of an organisation.
8

References:
Books and Journals
Borland, and. et.al., 2018. Business strategies for sustainability. Routledge.
Çelik and Büyükbalcı, M. , P.2020, CC. Resource dependence reduction strategies for
international new ventures. International Journal of Commerce and Finance, 6(2), pp.207-
217.
Chung, H.F. and Ho, M.H.W., 2021. International competitive strategies, organizational learning
and export performance: a match and mis-match conceptualization. European Journal of
Marketing.
Dinu, A.M., 2018. International market entry strategies. Academic Journal of Economic
Studies, 4(2), pp.20-25.
Kozlenkova and et. al., 2021. Sharing economy: International marketing strategies. Journal of
International Business Studies, 52(8), pp.1445-1473.
Otenko, I. and Parkhomenko, N., 2019. Strategies of business systems development in global
environment. Scientific Annals of Economics and Business, 66(2), pp.153-166.
Purba, G.K., Fransisca, C. and Joshi, P.L., 2021. Analyzing earnings management preferences
from business strategies. Journal of Financial Reporting and Accounting.
Shirodkar, V., Strange, R. and McGuire, S. eds., 2019. Non-market Strategies in International
Business: How MNEs capture value through their political, social and environmental
strategies. Springer Nature.
Singh, D. and Gaur, A.S., 2021. Risk mitigation strategies in international B2B relationships:
Role of institutions and governance. Journal of Business Research, 136, pp.1-9.
Trading Economics, 2022 [Online] Available through:
<https://tradingeconomics.com/spain/gdp>
Wall, W.P., 2022. Global Competition—The Battlefield. In Global Competitiveness (pp. 1-6).
Springer, Singapore.
Worldometer, 2022 [Online] Available through:
<https://www.worldometers.info/geography/how-many-countries-in-europe/>.
yan Zhang, H. and Van Den Bulcke, D., 2018. International management strategies of Chinese
multinational firms. In Management Issues in China: Volume II (pp. 141-164).
Routledge.
9