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 - – talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, wage bills are increasing, there is increasing trade war between United States & China, increasing energy prices,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, 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 -
Ability to lead change in Strategy & Execution field
– Crm Hilton is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Crm Hilton in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Learning organization
- Crm Hilton is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Crm Hilton is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hilton Hotels: Brand Differentiation through Customer Relationship Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Organizational Resilience of Crm Hilton
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Crm Hilton does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Hilton Hotels: Brand Differentiation through Customer Relationship Management firm has clearly differentiated products in the market place. This has enabled Crm Hilton to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Crm Hilton to invest into research and development (R&D) and innovation.
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.
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.
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.
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 -
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Crm Hilton needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study Hilton Hotels: Brand Differentiation through Customer Relationship Management has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Crm Hilton 's lucrative customers.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hilton Hotels: Brand Differentiation through Customer Relationship Management, is just above the industry average. Crm Hilton needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
Slow to strategic competitive environment developments
– As Hilton Hotels: Brand Differentiation through Customer Relationship Management HBR case study mentions - Crm Hilton takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
Need for greater diversity
– Crm Hilton has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Crm Hilton can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Crm Hilton to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Crm Hilton in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
Building a culture of innovation
– managers at Crm Hilton can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Crm Hilton to increase its market reach. Crm Hilton will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
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.
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.
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.
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.
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 -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Crm Hilton.
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.
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.
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.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Crm Hilton needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Crm Hilton in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
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.
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.
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.