Business Project Report: Hilton Hotel International Business Strategy

This report provides a comprehensive analysis of Hilton Hotel's international business operations, focusing on its expansion and strategies in the United Kingdom and India. The executive summary highlights key aspects such as trading across borders, legal and cultural factors, and the application of PESTLE analysis to identify opportunities and threats. The report delves into specific legal frameworks like the Companies Act 2006 in the UK and the Companies Act 1956 in India, emphasizing the importance of cross-cultural understanding. It also examines the impact of social factors, technological advancements, and environmental concerns on Hilton's business. The report further explores Hilton's corporate social responsibility (CSR) using the Carroll pyramid and stakeholder theory, evaluating the company's responsibilities towards various stakeholders. Additionally, the EPG model is considered for developing effective business strategies. The report concludes with an evaluation of the theories and provides recommendations for Hilton's continued success in the global market.

Business Project Report
1

EXECUTIVE SUMMARY
International business refers to exchange of product and services across the nations
border. Foreign trade help company in ensuring optimum utilization of resources. With the thelp
of international business Hilton is able to assure global recognition along with constant growth
and success. Further, in this report it has been identified that there are different laws for
operating business in diverse country. Such as entity is required to follow Companies Act 2006
while doing business in UK. On the other hand, provisions of Companies Act 1956 should be
adhered while dealing in India. Culture have direct impact on the operations of company in
foreign country. Therefore, the cross cultural differences have been into consideration to ensure
smooth operations in foreign country. Further, to identify opportunities and threats in target
market PESTEL has been found to be an effective model. It further helped in identifying the
impact of political, economic, social, technical, environmental and legal constituents on the
operations of company. Thereafter, it is important for company to create social impact which
means performing activities that are beneficial for community as a whole. In this respect, Caroll
pyramid has been found to be useful for Hilton. With the help of this, Hilton hotel has been able
to fulfill its responsibility towards society, local communities, employees, customers,
government and shareholders. Further, for developing the effective business strategy, company
has considered EPG model. It is further based on three dimensions, ethnocentric, polycentric and
geocentric.
2

TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................2
INTRODUCTION...........................................................................................................................4
Trading-across-borders....................................................................................................................5
Legal Factors................................................................................................................................6
Legal Factors..............................................................................................................................10
CAGE.........................................................................................................................................10
SOCIAL IMPACTS.......................................................................................................................12
Carroll CSR Pyramid is a corporate social responsibility.........................................................12
Stakeholder Theory....................................................................................................................15
CRITICAL EVALUATION of The Theory .................................................................................18
CONCLUSION..............................................................................................................................21
REFERENCES..............................................................................................................................22
3

INTRODUCTION
Global business means international trade in which companies sell products and services
across the world. Global business can also be termed as an international business in which
commercial transactions take place in between two or more countries. Commercial transactions
may be relayed to private entities, government, sales, investment, logistic or transportation etc.
Private organizations undertake such transactions for the purpose to earn profits. In case of
government, they have to undertake such transaction to earn profit and for some political
reasons. International business activities include cross border transactions of goods and services
in between two or more countries (Saunders and Lewis, 2014). Transaction of economic
resources includes skills, capital, people etc for producing and delivering the physical goods and
services. That may include finance, insurance , banking constructions etc.
Various multinational organizations such as Hilton provide its services to the different
countries such as India and United Kingdom. Hilton is a global hospitality organization that
serves and manages its customers with the help of several hotels and resorts. It is a public limited
organization that provides services across the globe. Hilton has over 765,000 rooms in more than
100 countries and it is the largest hotel chain in the world in terms of rooms as well as
international presence. Its vision is to fill the earth with the warmth and light of hospitality. Its
mission is to become a prominent global hospitality company as well as to be the first choice of
customers, team members and owners etc. (About Hilton Hotel Worldwide, 2016). Hilton itself
stands for H-hospitality, I-integrity, L- leadership, T- teamwork, O-ownership and N-now. By
Hospitality, their mean is to provide or deliver the best services to its guests. Integrity refers to
do the right things at all the times. By leadership, their mean is that they are the leader of the
entire hospitality industry as well as in their community. Teamwork states that it believes in team
efforts. Ownership refers that they are the owner of their actions and decisions. Now means that
they operate with a scene of discipline and urgency.
With the luxuries facilities, they also provide budget and premium services to their guests
(About Hilton Hotel Worldwide, 2016). Further, the report will include a trading of services
across the border of India and UK by Hilton Hotel. Also, it will describe about various social
impacts that Hilton faces in the markets of India and UK. At last, evaluation of the theories will
be done in the report and recommendations will be given.
4

TRADING-ACROSS-BORDERS
Trading across border refers to the flow of goods and services outside the national
boundaries. It helps the organizations such as Hilton to expand its business in the global market.
It also enhances the market share and profitability of an organization. Trading across border
includes various solutions, ideas and strategies (Trong Tuan, 2012). This helps companies in
providing their services across the nation. Hilton is using various trading laws and regulations to
enhance its market share as well as profitability in the international market. These are as follows:
PESTLE of INDIA
Political Factor
 Ideologies of several
political parties
 Taxes
 India is the largest democratic country in the world
which involves federal form of government system.
Because of this, hospitality firms such as Hilton gets
influenced by several government policies, interest and
ideologies of several politicians and parties etc.
 Taxation is another political factor that may affect the
activities of Hilton in India. There are several types of
taxes such as service, sales etc. which lead to increase
the prices of the hotel. Increase in prices results to
decrease in demand (Baden, 2013).
Economic Factors
 Stability
 Reduction in industrial
licensing
 Since, the industrial reform policy was introduced in
India in 1991, its economy is stable. This stability helps
the firms such as Hilton to expand its business
consistently in the region that is of India.
 Reduction the industrial licensing and increase in
liberalization and globalization have lead the
organization towards expansion within India.
Social Factor
5

 Increase in population
 Rise in employment
 Increase in population will provide more number of
customers to Hilton in India. In such case, Hilton can
expect large growth in India (Nalband and Kelabi,
2014).
 Increase in the employment will lead towards the rise in
the living standards of people. This may be helpful in
enhancing the business of Hilton in India.
Technological Factors
 Online Rental services  Technology has a huge impact on the business of Hilton
in India in the form of online rental services such as
Airbnb which allows private individuals to rent rooms
or homes directly (Ojo, 2016). The major threats that
Airbnb possesses on hotels such as Hilton is that its
hosts can avoid expenses such as hotel taxes and fire
regulations which means that they have much lower
operating costs. This enables Airbnb hosts to undercut
the rates of hotel rooms in many markets.
6

Legal Factors
 Disability
discrimination
legislation,Minimum
wage, other.
 Indian has introduced many legislation such as
disability discrimination. It may affect Hilton's cost and
demand however will help in boosting there production.
 Hilton is also required to take care of the laws such as
Trade mark Act 1969, Essential commodities Act,
consumer protection Act 1996 etc. In order to expand
its business in India, Hilton is required to follow
various regulations related to employment, health and
safety, monopoly trade and product as well as EU &
international laws (Ridley-Duff and Bull, 2015).
Environmental Factors
 Fuel Prices
 Electricity Cost
 One of the major environmental factors that can disrupt
Hilton’s business is fuel prices. Increase in oil prices
can lead to enhance the travel cost and decrease the
demand for hotel rooms in India. Obviously, a potential
threat for Hilton business will be any sudden increase in
the price of fuel costs particularly for the airlines
(Akhter and Fernando Pinto Barcellos, 2011).
 A potential long-term environmental impact on Hilton
can include increased electricity cost created by efforts
to curb greenhouse gases by limiting the burning of coal
in power plants. Climate change can harm the business
of Hilton.
7

PESTLE of United Kingdom
Political Factor
 Threat of terrorism
 Impacts of sanction
imposed on Russia
 United Kingdom has been justly branded as a place that
accommodates set of extremistic religious companies. A
threats of terrorism are most likely to reduce the
numbers of visitors to London and UK with negative
impacts on Hilton performance in this market (Baylis,
Smith and Owens, 2013).
 Hospitality industry in UK may experience or suffer
from sanctions those are imposed by EU and UK
towards Russia due to its appropriation of Crimea and
its perceived intervention on Ukraine’s internal affairs.
It may lead to decline in the revenue structure of Hilton
Hotels in UK due to the decline in the number of
visitors to the country.
Economic Factors
 National macroeconomic
situation in UK
Value of GBP against other
major currencies
 National macroeconomic situation and events as well as
factors are major factors that may affect the activities of
Hilton Hotels & Resorts business in UK. Taking a
example, during the Olympic times in the UK in 2012
most of the hotels were occupied and booked fully for
the whole period (Beck, 2015). But, the situation was
completely different once the Olympic Games were
over.
 GBP (British Pound) exchange rate against other major
countries currencies and inflation rate in the UK may
represent as a significant factors that may place its
impact on Hilton performance.
8

Social Factor
 Demographic changes
in UK and worldwide
 Changes in family
patterns
 There are wide range of social factors such as change in
consumer lifestyle, demographic variables, growth rate
populations etc impacts the Hilton hotels and resorts
(Bishop and Pagiola, 2012).
 Changes taking place in family patterns such as increase
in the number of single people, same sex marriages,
families without children etc might also have impact on
the business performances of Hilton Hotel in UK.
Technological Factors
 Technological
breakthroughs in
catering industry
 Advancing hotel
booking functionality
 Overall improvement of technological infrastructure is
relating to the hospitality industry may place a great
impact on the performance of Hilton. Matters associated
with the use of cost and energy as well as potential for
innovation within the industry can be classified as
important technological factors (De Marchi, Di Maria
and Ponte, 2013).
 Also the hotel bookings have become very sophisticated
these days as anyone can book a hotel room in a simple
step with the help of internet. Increasing number of
social media such as Facebook, tweeter and websites
like trip adviser help both the customers and the hotels.
9

Legal Factors
UK consumer protection rules
and regulations
Immigration rules and
regulations in UK
 Performances of hospitality organizations such as
Hilton is directly affected by employment and consumer
protection laws in UK, and also the nature of
competitive regulation, and risks of military invasion in
the country (Dempsey and et.al., 2011).
 UK government had placed many visa restriction
regulations on various countries such as USA, EU
countries, Australia etc. for the international visitors.
But following countries plays a important role in the
travel and tourism industry in UK.
Environmental Factors
Potential damage to the brand
image due to environmental
pollution
 The hospitality industries are often criticized for
emitting waste particle in river banks etc that affects the
tourist attraction places (Dominelli, 2012). This
sometimes leads to decrease in the brand image of
hospitality sector firms such as Hilton.
CAGE
Hilton is an American organization which is trying to identify the cultural, administrative,
geographical and economic differences among UK and India. This will help the Hilton in
organization in understanding the patterns of capital, trade, information as well as people flows
in both the countries and which country will be beneficial for trading.
10

India versus UK from the perspective of US organization
Cultural
Attraction
Administrative
Attractions
Geographic
Attractions
Economic attractions
India English
language
westernized
culture
Common law
Lower long-run
risk?
Common colonizer
Political friendship
Distance is
around
12295.610 km
Profitability
Firm strategy and
upgrading
soft infrastructure
Specialized labour
United
Kingdom
English
Language as
well as
westernized
culture
Human settlements
support clinical and no
colonial staff
Shorter distance
of 5,585 Km
that are 3470
miles
Larger markets
Higher income
Capital availability
Foreign companies as
export
bridges
Cultural Attractions
Hilton should go for UK market as it is more close to its cultural and will be m,ore profitable for
the organization. As it will have to make less efforts emphasis on development and Behaviour of
the employees. Because there is less variation in the customer preferences and natures in United
Kingdom and US with comparison to India (Elliott, 2012). Thinking of about cultural attractions
that the United States based organization that is Hilton should definitely go for UK. India is also
being developed in English. English plays a important role in the markets of the India as well as
and also the youngsters of India are looking forward to the western culture. There is good scope
of Hilton in India also but UK will be a better option if the comparison is to made between India
and UK.
Administrative attractions
11

under this case India has some of the common laws with UK but not US. So in that case Hilton
will have to make more efforts to place its market in India as comparison to UK. This because
UK and US have many laws in common and so the company will not find any of legal difficulty
while oping its hotels and resorts in UK. Whereas Hilton will get a huge market in India but will
have to make certain efforts regarding fulfilling the legal formalities (Eriksen, 2014).
Geographic Attraction
On comparing the difference between UK and India fro US. It has been fond that India is too far
fro US and UK is nearby fro US. This can be taken as a great opportunity for Hilton to spread its
market in the neighbor country (Felbermayr, Prat and Schmerer, 2011). As it will lead to lesser
transportation cost between unites stated and united kingdom.
Economic attractions
Going through various economic attraction of both India and United Kingdom. It has been
identified that the Hilton will get the largest market ad more profitability in united kingdom as
compared to the markets of India (Lihra, Buehlmann and Graf, 2012). Also the availability of
capital will be high in UK then in India. Although Hilton might get large soft infrastructure,
specialized labour in India but it will get more of foreign investment in UK. Also the income of
people is higher in UK as comparing to India.
Conclusion
Going through all factors it has been evaluated that the Hilton that is a US based organization
should place its services in UK. As it will be more valuable for it (McAusland and Millimet,
2013). Going through through all above attractions whether it is economic, administrative,
geographic etc.
SOCIAL IMPACTS
Carroll CSR Pyramid is a corporate social responsibility
Carroll CSR Pyramid is a corporate social responsibility of organizations such as Hilton
Hotel. It involves the conduct of a business so that it is economically profitable, ethical law
abiding and socially supportive (Baden, 2013). To be socially responsible then means that
profitability and obedience to the law are foremost conditions when discussing the firm’s ethics
and the extent to which it supports the society in which it exists with contributions of money,
12