Strategic Management in a Hotel Assignment

Strategic Management in a Hotel Assignment Words: 2889

In order to do a strategic analysis of Hilton Singapore which located in Orchard Road, the objective of this assignment is to know more about its current market position and strength in the hospitality and tourism industry. An Overview of the Hospitality and Tourism Industry in Singapore Singapore has been enjoying record visitor numbers for six consecutive months- a sign that its tourism industry is recovering strongly from a slump caused by the recession last year. The prosperity of the hospitality and tourism industry causes Singapore to become to be a tourism country. The upcoming events like Formula 1 Grand Prix and the Youth Olympics as the element to attract visitors to come. Most visitors come from Indonesia, India, Malaysia, China, and Australia, these five countries occupied the majority population to drive the growth of tourism in Singapore.

Background of Hilton When established in 1970(Ruba, 2010), Hilton Singapore hotel is the proud flagship brand of Hilton Hotels Corporation names Hilton Worldwide and the most recognized name in the global lodging industry. Vision and Mission Statement The vision/mission or philosophy statement sets the direction and provides the foundation for your planning(Janice Arcaro, 1995, p. 61). Vision Statement To fill the earth with the light and warmth of hospitality (Hilton Worldwide, 2010). Mission Statement We will be the preeminent global hospitality company – the first choice of guests, team members and owners alike (Hilton Worldwide, 2010). Values

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H Hospitality – We are passionate about delivering exceptional guest experiences. I Integrity – We do the right thing, all the time. L Leadership – We are leaders in our industry and in our communities. T Teamwork – We are team players in everything we do. O Ownership – We are the owners of our actions and decisions. N Now – We operate with a sense of urgency and discipline. (Hilton Worldwide, 2010) The vision and mission have a large effect on staff in Hilton Singapore Hotel and supply a strong power for them to do service for customers. Of course, the values of Hilton indicates its sprite and the position they want to be. Products and Service of Hilton Singapore

Hilton Singapore hotel is a 24-floor building which includes 422 guestrooms, an outdoor swimming pool, fitness center. There are several function rooms for holding conventions and dividing floors as smoking floor and non-smoking floor. At the front office, a business center serves for those who need to print, copy and go on the Internet. Because of Hilton Singapore hotel linked to Four seasons hotel with a shopping gallery, it is convenience to go shopping in the hotel. There are 4 restaurants as well as a bar/lounge. External Environment Analysis PESTEL model as a tool to do an analysis on Hilton Singapore in terms of political, economic, social, technological, environmental and legal factors. Political analysis

The Singapore Government is also currently trying to develop a model in which a vibrant civil society is compatible with a strong government(Maria, 2008). Singapore is an extremely safe place by any standard(Jennifer, 2009) because the government carried out strict punishment for those who violate laws. It’s a efficient way to reduce the rate of crime. Since 1970, Hilton Singapore was supported by government to serve for their customer. Economic analysis The Singapore economy has experienced one of the highest rates of growth in the world over the past three decades(Ramkishen S. Rajan, 2009). The figure below indicates the national income like GDP and labor market from 2006 to 2009. Figure 1: Economic Survey [pic][pic] Source: Ministry of Trade and Industry, Annual Statistics, 2006-2009) Comparing with 2008, the unemployment rate increased by 3% in 2009 and the Gross Domestic Products (GDP) of Singapore declined about S$8,500 million from 2008 to 2009(Ministry of Trade and Industry, 2009). At the end of 2009, although GDP is less than that in 2008, it can be found the labor force and employed persons these two sector becomes a growing trend. The average rate of unemployment rate shows the economy still not revived. It illustrates the number of changes in employment slumped about 75%. Social analysis Except for a small number of indigenous Malays and Orang Laut, the population of Singapore which grew under British rule were immigrants from the immediate region, and from China, India and more distant part of the world(Edwin, 2008). Figure 2: Visitor Arrivals Figure 3: Top 15 Markets [pic] Source: Singapore Tourism Board, Tourism Statistics Publications, 2010) These two charts show the number of visitor arrivals and the occupation of top 15 markets from Dec 2008 to Dec 2009, the figure is a good suggestion for Hilton Singapore to focus on the visitor from Indonesia, Malaysia, P. R China, and Australia. The first half of a year is an off-peak season in Singapore, it’s time for Hilton to do a sales like’buy one and get one free’ to maintain their profit. In the past, the princess of Thailand arrived in Hilton Singapore hotel in 2009. Due to the riot in Thailand– 90 people were killed and nearly 2,000 wounded during two months of protests(My Paper, 2010), the number of visitors arrivals in Thailand increase 8. 4%. Technological analysis Technology like Hilton Hotels’ OnQ system is designed to provide marketers with the information they need to gain an edge over the competition and create loyal customers(David, 2009).

Staff in Hilton Singapore always connect with each other using Nokia mobile phone not only housekeeper but also people in front office. Environmental analysis The Ministry of the Environment and Water Resources issued the Singapore Green Plan 2012 in 2002 and update it in 2006(Hiroaki, 2010). Singapore plans to triple its Newater capacity and increase desalination output by almost 10 times by 2060(Business Time,2010). Hilton Singapore should coordinate with the government to avoid pollution and to protect the environment. In order to save electric power, the automatic doors are not allowed to use during the peak period. Legal analysis Singapore has mounted a two-decade effort to become the world’s first smoke-free city.

Cigarettes are banned in every public place, including snooker parlors, air-conditioned restaurants, supermarkets, indoor sports areas, and department stores(Rotarian, 1993). The floors are separated into smoke floors and non-smoke floors in Hilton Singapore and it is not allowed smoking near the lobby or in the hotel, the guests have to go to the Hilton Walkway to smoking. Internal Environment Analysis S. W. O. T Analysis • Strength 1. Strong brand name Hilton Singapore is one of the brands below Hilton Worldwide and follow its vision and mission to do service for the guests. Today Hilton Worldwide is the leading global hospitality company, spanning the lodging sector from luxurious full-service hotels and resorts to extended-stay suites and mid-priced hotels. 2. Favorable location

Hilton Singapore is centrally located in the fashionable Orchard Road area, which forms the shopping, commercial and entertainment hub of Singapore. 3. Good customer service capabilities Concierge counter and lobby greeters provide good service for guests like luggage storage, getting taxis, give some recommendations, etc. 4. Signature food The highlight of every buffet is Hilton Hotel’s famous cheesecake, which must not be missed. 5. Attraction promotional sales During peak-off season Hilton Singapore will carry out the promotion like “Stay two days and get one free” to attract customers. 6. Financially sound Hilton Singapore maintain its economic growth and has the power to be one of the sponsorships for F1 in 2009. 7. Pets allowed

Guests are allowed to carry their pets into Hilton Singapore the main reason why is the general management raise his dog in the hotel. • Weakness 1. Imperfect management style It caused a large number of people renewing every month not only in the front office but in the housekeeping department. 2. Lack of advertisement Hilton Singapore has little focus on doing advertising on newspapers or magazines. 3. Less capability in accommodation Hilton Singapore provides 422 rooms for the guest, compared with its rivals it has no advantage. • Opportunity 1. Attracting more visitors Hilton Singapore as one of the F1 sponsorship will do the roadshow on Hilton walk road every year. 2.

Increase economy Recovering from the financial crisis, the number of visitors increased and the tourism industry is blooming than before. 3. To provide employment positions To decline the government’s stress, Hilton Singapore will provide jobs for employees. 4. To improve service Concierge service as the star service in Hilton Singapore, a training course for staff can improve their service to help more guests. • Threat 1. Security issue To maintain customer’s safety is important, lack of security staff will affect guests’ safety and lose their confidence. 2. Threats from current competitors There is more than six 5-stars hotel near Hilton Singapore in Orchard Road.

Health competition is helpful for the hospitality and tourism industry. 3. Unforeseen circumstances From 2008 to 2009, the economic crisis broke out and H1N1 appeared to have a large effect on the hotel industry, the rate of rooms coverage is not considerable. 4. Obsolete decoration The decoration become obsolete during 40 years of history, it will affect Hilton Singapore’s image and reduce people’s expectation. 5. Brand-oriented hotels gradually infiltrate Branded hotels penetrate gradually, relying on the brand, chain and franchise the hotels are gradually rising, the market share has gradually expanded into the tourism industry of the new force can not be ignored. 6. Consumer buying ability

Comparing with chain hotel like 81 hotel and value hotels, Hilton Singapore is a high standard hotel to sever the guest who has ability to consume in Hilton Singapore. Porter’s five Forces of Environmental Threat Poster’s model of the forces that interact to produce the competitive situation in an industry is one of the most famous in the business literature(Wendy, 2005). Figure 4: Porter’s five Forces [pic] Source: Adapted and reprinted by permission of Harvard Business Review. From “How Competitive Forces Shape Strategy”, by Michael E. Porter, Harvard Business Review, March/April 1979, copyright(1979 by the President and Fellows of Harvard College. All rights reserved. Risk of entry by potential competitors(High)

There are more than ten hotels on Orchard road like Marriott Hotel, Grand Hyatt Singapore, Four Seasons Hotel, Orchard Hotel, etc. Singapore as a tourism country, with tourism and hospitality industry development, it will build more hotels and it will threaten the Hilton Singapore Hotel. The threat of substitute Products(Low) A shopping gallery on the first two floors is one part of Hilton Singapore which includes D, Balenciaga, Paul Smith, Bvlgari, etc. Although these brands are easy to be substituted or changed, it’s not a main threaten to affect the occupancy in the hotel. Bargaining Power of Suppliers(Low) If there is no appropriate reason, the hotel will not change its suppliers.

The market influence of Hilton Singapore reduce the bargaining power of suppliers, so it will not be the threaten. Bargaining Power of Buyers(High) According to the price and value of the hotel, customers will make the decision to choose the most suitable one. To increase its value to attract the customers is the important thing for the Hilton Singapore Hotel to do. Competitive Rivalry within an Industry(High) Four Season Hotel is behind Hilton Singapore and Orchard Hotel is in the Diagonally opposite. More than ten 4 to 5 stars hotels near Hilton Singapore is a big threaten. TOWS Matrix TOWS Matrix is a modern tool for analysis of the situation(Harold, 2006).

The firm needs to make a financial strategy to create more incomes and to reduce the debts. Figure 7: Boston Consulting Group (BCG) Matrix [pic] The BCG matrix is probably the best known such matrix to do the analysis for Hilton Singapore Hotel. It uses market growth as its environmental component and relative market share to evaluate products and service of Hilton Singapore hotel in four parts. Question Mark: Checkers Deli is in the parts of Question Marks due to it is a new part of Checkers Brasserie and the product of Checkers Deli like cheesecakes are popular. If it is considered to invest, it will need to improve to meet the needs of consumers.

Star: Convention sales and F are the star products in the hotel because of the high using rate of the function rooms which are used to take place meetings, wedding, graduation party, etc. Therefore, the convention sales have an effect on F. Cash Cow: A considerable number of room sales rate creating profits is the element to become the Cash Cow in the BCG matrix. Because of its promotion during off-peak, Hilton Singapore hotel still can keep hotel revenue. Poor Dog: The products in Glow Juice Bar and Cafe can be instead of that in other bar or cafe like Starbucks. The location is in the gallery which links Hilton to Four seasons hotel and few people passed by, it becomes Poor Dog. The Competitive Profile Matrix (CPM) Competitive Profile Matrix (CPM)

The rating values are as follows: 1= major weakness, 2= minor weakness, 3= minor strength, 4= major strength. According to the matrix above shows the competitive hotels near which are Hilton Singapore hotel. Comparing with Marriott Hotel which located at the crossroads on Orchard road, the weighted score reflects the disadvantage of Hilton Singapore hotel. The rating illustrates the level of the hotel and illustrates which part need to improve.

To attract consumers becomes the major issue for Hilton Singapore hotel. For the reason to maintain their market share to change strategy for increasing customer loyalty is necessary. Strategy Formulation & Methods of Development Grand Strategy Matrix Figure 9: Grand Strategy Matrix [pic] (Resource: Anne Osborne Kilpatrick, James A. Johnson, 1999, “Handbook of health administration and policy”, p625) The matrix above analyses the position of Hilton Singapore hotel and it is useful for Hilton to make the strategy in the future. From the GSM figure, the section of the Hilton Singapore hotel is Quadrant II which has a weak competitive position but rapid market growth.

Grand Strategy Matrix gives multiple strategy choices for Hilton Singapore hotel to do includes market development, market penetration, and liquidation. Conclusion As a tourism place in Asia, Singapore committed to developing the hospitality and tourism industry. Singapore is regarded as the safest country in Asia but a large number of population flow still can be the threat in society. Hospitality and tourism getting booming leads to the result of competition in the hotel industry and it is inevitable for the Hilton Singapore hotel to face the situation. Hilton Singapore hotel is lack of advantages to compete with those luxury hotels. Recommending advanced technologies and improving service quality is a good way to enlarge the influence of its products.

Doing SWOT analysis and using TOWs Matrix and Competitive Profile Matrix to evaluate the standard of Hilton Singapore hotel in the market. For the Hilton Singapore hotel, it still exists disadvantages in the current business market. The position in Grand Strategy Matrix is not satisfied which needs to improve in market development, market penetration and liquidation. Recommendations According to the report of the internal, external analysis of Hilton Singapore hotel, enlarging market share and maintaining the position in the hospitality and tourism industry will be its objective in recent years. Certainly, the changing situation causes different challenges and it is hard to say what it bringing is the niche or threat.

Safety always is put as the first attention in the hotel industry, to increase security not only full-time employees but part-time members do the schedule to maintain every position not be absent. However, the result causes human resource cost, but it will establish a safe environment image for consumers and avoid appearing crime in the hotel. Singapore hotel is focused on business customers, providing free Internet service may attract business guests. Wireless service is mature in Singapore, therefore pay Internet service will limit the guest using a computer or mobile phone online. It is not convenient to allow the guest to do business in the hotel and affect the efficiency of their work. Advanced technology is normally recommended in five-star hotels.

Singapore Youth Olympic Games claimed it will not only yield spin-off for businesses here but give companies a chance to give more to society(My Paper, 2010). As the sponsorship of Formula 1 Grand Prix, Hilton Singapore hotel can apply for sponsor YOG to enhance its influence. After Marina Bay waterfront celebrations it attracted more than 80,000 Singaporean and visitors to participate in a celebration at the Big Carnival(The Business Times, 2010). It is possible to develop a branch in Marina Bay, though Hilton Singapore hotel belongs to Hilton WorldWide. Developing market is a chance to invest in a new competitive situation. Like Shangri-La hotel has two branches in Singapore, one is in Novena and another one is in Sentosa.

Marina Bay and Sentosa are the attractions in Singapore, a huge amount of tourists will create profit than that in Orchard Road. Evaluation of Learning Strategy management combined knowledge of several subjects like marketing research, accounting, etc. to make a strategy for an organization. The assignment lets students charge of the usage of the strategic models like Porter’s Five Forces, TOWs Matrix, BCG Matrix, etc. to find out the problem for an organization to deal with. What’s more, after learning this subject the ability to do analysis is raised. The report lets students analyse the internal and external environment by using PETEL and SWOT models.

It shows how to do the strategy to meet the needs of consumers in the market when the external environment cannot be changed. Although it is not easy to experience taking charge of a company in real life, this assignment combines the theories into reality. Allowing students as the organizer position to manage the company is a good opportunity to use the knowledge of strategic management and learn how to face the challenge in the hospitality and tourism industry.

 

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