Case Study Description of Hilton Hotels: Brand Differentiation through Customer Relationship Management
This case analyzes the Hilton Hotels Corporation's CRM strategy at a key juncture in its history, immediately after the firm has been taken private by Blackstone. The case provides students with a comprehensive history of the evolution and IT enablers of Hilton's CRM Initiative, as well as the proprietary OnQ enterprise system. The case thus offers a rare opportunity to engage in a longitudinal evaluation of the firm's CRM initiative, and to enable students to propose the future evolution of the initiative based on their analysis.
Authors :: Lynda M. Applegate, Gabriele Piccoli, Chekitan S. Dev
Swot Analysis of "Hilton Hotels: Brand Differentiation through Customer Relationship Management" written by Lynda M. Applegate, Gabriele Piccoli, Chekitan S. Dev includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Crm Hilton facing as an external strategic factors. Some of the topics covered in Hilton Hotels: Brand Differentiation through Customer Relationship Management case study are - Strategic Management Strategies, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Hilton Hotels: Brand Differentiation through Customer Relationship Management casestudy better are - – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, wage bills are increasing, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Hilton Hotels: Brand Differentiation through Customer Relationship Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hilton Hotels: Brand Differentiation through Customer Relationship Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Crm Hilton, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Crm Hilton operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hilton Hotels: Brand Differentiation through Customer Relationship Management can be done for the following purposes –
1. Strategic planning using facts provided in Hilton Hotels: Brand Differentiation through Customer Relationship Management case study
2. Improving business portfolio management of Crm Hilton
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Crm Hilton
Strengths Hilton Hotels: Brand Differentiation through Customer Relationship Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Crm Hilton in Hilton Hotels: Brand Differentiation through Customer Relationship Management Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Crm Hilton in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Crm Hilton are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Hilton Hotels: Brand Differentiation through Customer Relationship Management Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Crm Hilton is one of the most innovative firm in sector. Manager in Hilton Hotels: Brand Differentiation through Customer Relationship Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Crm Hilton digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Crm Hilton has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Training and development
– Crm Hilton has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hilton Hotels: Brand Differentiation through Customer Relationship Management Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Crm Hilton is one of the leading recruiters in the industry. Managers in the Hilton Hotels: Brand Differentiation through Customer Relationship Management are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Crm Hilton has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Crm Hilton to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Crm Hilton has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Crm Hilton has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Crm Hilton is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Lynda M. Applegate, Gabriele Piccoli, Chekitan S. Dev can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Crm Hilton has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Hilton Hotels: Brand Differentiation through Customer Relationship Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Crm Hilton in the sector have low bargaining power. Hilton Hotels: Brand Differentiation through Customer Relationship Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Crm Hilton to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Hilton Hotels: Brand Differentiation through Customer Relationship Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hilton Hotels: Brand Differentiation through Customer Relationship Management are -
Increasing silos among functional specialists
– The organizational structure of Crm Hilton is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Crm Hilton needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Crm Hilton to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Crm Hilton is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hilton Hotels: Brand Differentiation through Customer Relationship Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hilton Hotels: Brand Differentiation through Customer Relationship Management HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Crm Hilton has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynda M. Applegate, Gabriele Piccoli, Chekitan S. Dev suggests that, Crm Hilton is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Capital Spending Reduction
– Even during the low interest decade, Crm Hilton has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Products dominated business model
– Even though Crm Hilton has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Hilton Hotels: Brand Differentiation through Customer Relationship Management should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hilton Hotels: Brand Differentiation through Customer Relationship Management, it seems that the employees of Crm Hilton don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Lack of clear differentiation of Crm Hilton products
– To increase the profitability and margins on the products, Crm Hilton needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Crm Hilton supply chain. Even after few cautionary changes mentioned in the HBR case study - Hilton Hotels: Brand Differentiation through Customer Relationship Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Crm Hilton vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Crm Hilton, firm in the HBR case study Hilton Hotels: Brand Differentiation through Customer Relationship Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hilton Hotels: Brand Differentiation through Customer Relationship Management, in the dynamic environment Crm Hilton has struggled to respond to the nimble upstart competition. Crm Hilton has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Hilton Hotels: Brand Differentiation through Customer Relationship Management | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Hilton Hotels: Brand Differentiation through Customer Relationship Management are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Crm Hilton is facing challenges because of the dominance of functional experts in the organization. Hilton Hotels: Brand Differentiation through Customer Relationship Management case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Crm Hilton can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Crm Hilton can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Crm Hilton to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Crm Hilton to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Crm Hilton has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Hilton Hotels: Brand Differentiation through Customer Relationship Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Crm Hilton to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Crm Hilton can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Hilton Hotels: Brand Differentiation through Customer Relationship Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Crm Hilton can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Developing new processes and practices
– Crm Hilton can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Crm Hilton can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hilton Hotels: Brand Differentiation through Customer Relationship Management suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Learning at scale
– Online learning technologies has now opened space for Crm Hilton to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Crm Hilton can use these opportunities to build new business models that can help the communities that Crm Hilton operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Crm Hilton can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Crm Hilton can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Crm Hilton has opened avenues for new revenue streams for the organization in the industry. This can help Crm Hilton to build a more holistic ecosystem as suggested in the Hilton Hotels: Brand Differentiation through Customer Relationship Management case study. Crm Hilton can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Hilton Hotels: Brand Differentiation through Customer Relationship Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hilton Hotels: Brand Differentiation through Customer Relationship Management are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Crm Hilton business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hilton Hotels: Brand Differentiation through Customer Relationship Management, Crm Hilton may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Stagnating economy with rate increase
– Crm Hilton can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Crm Hilton is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Crm Hilton in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Crm Hilton demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Crm Hilton can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Crm Hilton has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Crm Hilton needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Crm Hilton needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Crm Hilton can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Hilton Hotels: Brand Differentiation through Customer Relationship Management .
Environmental challenges
– Crm Hilton needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Crm Hilton can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Crm Hilton
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Crm Hilton.
Weighted SWOT Analysis of Hilton Hotels: Brand Differentiation through Customer Relationship Management Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Hilton Hotels: Brand Differentiation through Customer Relationship Management needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Hilton Hotels: Brand Differentiation through Customer Relationship Management is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Hilton Hotels: Brand Differentiation through Customer Relationship Management is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hilton Hotels: Brand Differentiation through Customer Relationship Management is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Crm Hilton needs to make to build a sustainable competitive advantage.