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Introduction Of Global Strategy Development & Implementation
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The DoubleTree by Hilton is an American hotel management chain; it is a part of Hilton. This hospitality industry is located all over world. DoubleTree hotels operates their company independently, however Hilton Company worldwide manages some hotels. It is a hospitality industry, this industry used to provide service and products for tourist’s business travellers.
According to 2019 survey, current revenue of this industry is approximately 9.46 billion, however, in 2018; net worth of this industry was 8.91 billion. It is found that company operates in almost over 47 territories and countries (Hilton.com, 2020). Currently, 169000 numbers of employees are working in this industry. In regards to opening a new subsidiary, company has selected Switzerland country as there is not available any hotel services of this company.
Economic data and competitor analysis
Switzerland is a home for hospitality industries as it is a European tourist hub for tourism and destination. This country provides hospitality education. Here, tourism industry can be built for climate and better availability of this geographical region. In this country, there are different renowned hospitality landscapes. Most internationalization hotels are presented in all countries, this hotel developed their countries economy(Statista, 2021). Customer experiences encourage corresponding countries that are successful in this industry towards industrial internationalization based on domestic congestion. International hospitality industries used to provide better service, this industry has grown very fast, its global collection more than 380 upscale. In metropolitan areas, DoubleTree has created their new hotel to provide better service to customers. Revenue of DoubleTree hotels worldwide is about 9.46 billion, total assets of this industry are 14.96 billion, and net income of this industry is 0.89 billion according to American dollar. This hotels’ market value in global market is 600.49 billion according to a 2014-2018 survey (Statista, 2021). This companies’ total net worth worldwide is approximately 14.96 billion in 2019 this industry has 6100 properties. In regards to analyzing market environment for DoubleTree Hotel, following Diamond Model of Porter has been used.
Firm Strategy, structure and Rivalry
DoubleTree hotel industry provides superior service and makes their business versatile and independent. They make franchise business structure ONQ proprietary management systems. Some hotels, such as, The PostCard Dewa, Hotel Ugyne and other hotels are rivalry (Mykolaet al. 2020).
Demand conditions
587 several properties across 47 territories are there in DoubleTree hotel industry. Loyalty and satisfies customers services used to prove by this industry.
Related and supporting industries
Suppliers provide raw material to this industry that is Hyatt, Choice, and IHG.
Factor conditions
Local destination availability and availability of tourism places and availability of effective infrastructure resources, such as roads, water, power, and satisfied human resource services forwarding innovative technology.
Strategy to internationalize
In hospitality industry, several strategies are that help organisations to focus on international markets. In regards, following strategies are critically analysed.
Transnational strategies
A transnational strategy is a simple plan of action, where industry or any organisation decided to produce activities across international areas. These strategies make a structure of global business activities that are coordinated and interdependent between its headquarters. Transnational strategies try to balance customer demand efficiently; DoubleTree hospitality industry adjusts customers' needs according to their preference. International location and operational divisions are located subsidiaries. This strategy offers some benefits for centralization that is provided by global strategy. These benefits are along with domestic strategies in local responsive characteristics (Wittkop, Zulauf, and Wagner, 2018). Transnational industries expand their products and sales with lower cost and companies can attain scale economies.
Multi-domestic strategies
Multi-domestic strategies are applied in hospitality industry. Industry can customize their products to meet customers’ specific demands or preferences. This strategy concentrates on local customers' demand and their basic needs. It gives regional operation of preference, demands, and responsiveness. This strategy is to sacrifice global efficiency and achieve higher standard local responsiveness. Some industries allow this strategy in their business management system. Hotel industries perfectly use a specific sales approach and operate in every market to operate in global market. After creating Multi-domestic strategy, regional managers used to give full autonomy. In this case, different transnational strategies or its corporations in local branches that provide liberty to translate industrial global messages to consumers’ cultural norms in mind and their preferences.
Global and international
Global and international strategies are used in any business management and other organisations. This strategies’ primary concern is import and export in market. This strategy is focusing on exporting some products to other countries or foreign markets. Industries are using this strategy to circumvent need to invest in employees and their facilities. Industries’ global strategy prioritizes global integration. Some industries or organisations are concerned about global market and covering all possible management strategies. Local responsiveness is not much important to industry or organisation that makes distinguishable products and services in several regions.
International and global market strategy has been considered to critically analyse potential capability of internationalization in selected locations of Switzerland for DoubleTree Hotel. This strategy can be implemented in DoubleTree hospitality industry to expand business in new country. This industry can improve their drawbacks by using this strategy. An authority of industry needs to know about international strategy, so that industry can get more information to develop their services. Industry needs to identify their objective, which can take their business towards success. DoubleTree hospital industry can be focused on their targets, so that industry can achieve their success based on their aim. Industry needs to offer numerous offers to customers that will attract customers. Expanding an industry in a new location is important to spread their business and make it more growth oriented.
Global and international strategies allow import and exporting products and services to foreign countries or other organisations, hence, to expand this DoubleTree hotel in Switzerland there must be a proper environment and perfect business management plan to build a new industry.
Making a new business there must be implemented a global market strategy that helps to know about goals and cast net wide in several markets. Many associations and organisations offer to build a new industry in a new place that has an effective impact on a new business plan. Industry must need to plan marketing strategy and international organisational structure that will affect industrial structure. A proper plan focuses on different responsibilities, promotes efficient work, determining an industrial distribution strategy, and assembles industrial strategy documents.
Country analysis
PESL framework analysis
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Factors
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Descriptions
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Political
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Stable political environment in Switzerland helps to maintain a diplomatic relations with other countries and business environment. It allows foreign business environment to establish their business into a selected location based on European Union and Free trade association.
Unemployment makes people unhappy for this corruption.
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Economy
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Switzerland’s economy growth rate is very strong across the world due to its strong and skilled workforce, value added services that helps to ensure a growth of $70,989 GDP/Capita.
Effective implementation of business strategy can grow more economic value within this country (Mezzanatto-McNair, 2019).
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Social
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Population growth of this country dropped below and replacement rate decreased negatively.
Good communicating system and infrastructure quality has helpedmany travellers to come and visit to the country and grasp the outlook and environment.
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Legal
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? Civil law type legal system is there in Switzerland that allowed different law for public and private business.
? A company can expand its business into this country through obtaining a EFTA and EU citizens (Sigtax.com, 2016).
? This country can maintain their legal factors by considering discrimination law, consumer protection law and other decision- making process.
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Table 1: PESL Analysis of Switzerland
(Source: Abdohet al. 2018)
PESL analysis has helped to create new business development with respect to this framework. Implementing this PESL framework, DoubleTree hotel can make a subsidiary in Switzerland. Environment of this country is natural and there is less pollution, it is an attractive point to make a new industry (Abdohet al. 2018). All PESL factors can be implemented to develop political economy, social and legal factors that are important strategies that need to follow this country.
Due to corruption, legal factors need to be improved to implement new policies for DoubleTree Hilton hospitality industry. Switzerland is a forest area, tourists come here to travel and that is main profitable criteria for Hilton hotel industry. It will make this industry sustainable and environment of this country is very comfortable, this issue will have an influence on all tourists. Moreover, a hospitality industry wants to satisfy their customers to provide better service and products as per customers’ preferences. Switzerland is one of attractive tourist spot; there are very charm places, such as Geneva, Lausanne and Zurich. Here, different museum and galleries and valorous historical building are there (Worldatlas.com, 2020). In this case, tourists are attracted here for this reason. In Switzerland, several musical and other cultural festivals are happened, so that people come around and happily travel in this spot. This is beneficial for DoubleTree Hilton hotel industry. In case, people will come here and will stay in area and this will be profitable for this industry.
Country environment analysis
According to conservation of energy for future data, Switzerland is identified as world’s third greenest country (Conserve-energy-future.com, 2020). Therefore, industrial pressure from global environment is massively focused on this location to establish business. Moreover, availability of resources, such as efficient transport system, tourism environment, and energy resources helps to attract business organisation to this country (Worldatlas.com, 2020). In regards, following analysis is developed to focus on competitive factors and resources of company that can help to establish business on selected location easily.
Porter's Five Forces analysis
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Five Forces
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Description
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Competitive Rivalry
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? In Switzerland, different hospitality competitors are there, such as Park hotel Vitznau, Ameron Luzern Hotel Flora, Grand hotel national Luzern and many more.
? Competition in this market is high for DoubleTree hospitality industry.
? Here competitors compete very strong.
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Threat of New Entry
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? Retaliations of competitors already exist as those provide different range of services and solutions.
? Requirement of capital costs at selected locations could be a significant threat.
? Rules, regulations, and policies of local government at Switzerland can create barriers to DoubleTree Hotel.
? Potential capability of loyal brand services to customers.
? New entry threats are high for this industry.
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Buyer Power
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? Everyday many travellers come here to visit this place, so there are a huge number of people that affect positively in this industry.
? Different competitors are there, in case industry needs to provide special service for customers.
? In case, buyer power is high.
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Threat of Substitution
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? Customers always find different customer service that can be provided by DoubleTree industry.
? A substitution is very cheap and easy to make an industrial position for economic profit.
? Substitution cost is low.
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Supplier power
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? In Switzerland, DoubleTree can get raw material suppliers, such as, food suppliers, electronic goods suppliers, and many more.
? Due to a lot of competition, this company can get reliable suppliers to develop their business management.
? Here supplier power is high.
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Table 2: Five Forces of Porter
(Source: Bruijl, 2018)
According to analysis, it is analysed that industry can attract customers with providing innovative service and products; it will impact on high marketing campaigns. DoubleTree industry can build their industry at selected locations. Threat of substitutes is reliable for building hospitality industry, here; competition is high to compete with other hotels’ services. Other hand, everyday visitors come here to travel, for their positive experience this industry can provide them good service and supply products as per their requirements.
4P Marketing Mix
According to marketing and services of other competitors, following marketing-mix strategy has been considered to ensure potential growth of DoubleTree Hotel at specified location of Switzerland.
- Product:The DoubleTree hospitality industry can provide best quality service according to customer service strategy. There are so many competitors, so that this industry can improve their strategy by changing their food quality, room decoration, giving special offers as per customers’ demand (Barghouthi, 2017).
- Price:Price of this hotel can reduce for customers, so that customers can attract to this hotel that will be beneficial for up-grade their business.
- Place:Forest area is very comfortable to visit that has an impact on tourists. This industry can build their hotel beside a valley or hill station, so that customers can enjoy a proper view of nature, such as sunrise, snowfall and other natural beauty.
- Promotion:this industry can promote their hotel through digital marketing, social media, television channels and other electronic media, so that customers can get these hotels’ services.
According to 4P’s analysis of marketing mix, specified industries can start their business in this specific location. Therefore, it is very beneficial for this industry, because of environment of this location, number of visitors, visiting area of this place that all are very attractive for making this industry developed (Adillón, 2018). Price and products are reliable for customers and that will improve their industry with ensuring efficient customer satisfaction in country. However, DoubleTree industry can promote their business through social media or digital marketing and other electronics markets (Siakalli, Masouras, and Papademetriou, 2017).
Explanation of Entry mode
Licensing
Starting a new business there is some legal process that needs to maintain for further process. License for opening a new hotel is required registration number for maintaining legislation. DoubleTree hotel industry has required license for promotion, star rating and location of hotel. Rules and regulation can be obtained for hospitality industry according to country.
Franchising
Many industries can start their business management with a Franchise strategy for getting stable customers. Industry can use this strategy to capture share market; here many industries or organisations can start their business collaboration with other organisations. This marketing system is creating an image in mind for current and future customers about industrial products and service (Siakalli, Masouras, and Papademetriou, 2017). This strategy allows identifying a brand of specific products, making success toward goals and improving business marketing distribution system.
Joint venture
A strategy of Joint Venture (JV) is an agreement of business between two other industries or companies or organisations. It helps for making-decision process together, important aim of this strategy is achieving goals and increasing a companies’ respective line of bottom. In case, by this agreement those industries or companies can make effective collaboration, both industries share JV returns. It is equally absorbing potential challenges.
Merger and acquisition
A corporate strategy relies on Merge and acquisitions (M&A); it deals with selling and buying to combine different industries to achieve goals for rapid economic growth. This strategy considers new facts, such as, status of current business, threat and opportunities and current marketing scenario. M&A is a devised transform of strategic business management plans for industry or organisations.
In this case, DoubleTree hospitality industry can follow Franchise strategy to develop their business. This industry has 465 franchise collaborations worldwide, apart from this, industry has provided 122 franchise collaborations. In Switzerland, there are so many hotels, in regards; this industry can collaborate with a standard hotel to make collaboration with them for better servicing (Siakalli, Masouras, and Papademetriou, 2017). DoubleTree hotel can be a best quality hotel with high standard service; it can be more useful to collaborate with other hotels to provide service and products to customers. In this case, customers will get more service that is comfortable and their requirements will be fulfilled.
Travellers are coming to Switzerland to visit various tourist spots, such as Montreux, Zermatt, Lugano, and Lucerne with other beautiful places (Travelingmitch.com, 2021). Capital of this country is Bern; here a stunning medieval old town is situated beside Crook River (Worldatlas.com, 2020). In case, hotel managers can help them to serve better service.
Type of managerial and organisational problems
Managerial and organisational problem
- A constant change of customer’s expectation is a problem of hospitality industry; customer satisfaction is important and needs to be kept in mind to hotel managers.
- Staff turnover is a basic drawback of this industry, there is some labour shortage and some of them are irregular in their job. In regards, customers have faced some problems.
- There is some communication gap to customers.
Organisational coordination
- Marketing and sales department depends on provided data on customers’ history.
- In this industry front office department, who make work schedules and customer requirements? Special arrangements for VIP customers make this industry developed.
Cultural model
Based on Hofstadter’s model on cultural dimensions following issues are identified (Beugelsdijk, Kostova, and Roth, 2017).
Uncertainty Avoidance Index (UAI):DoubleTree hotel industry is conservative and rigid structured industry, it avoids uncertain situations and they control that situation possibly. This industry has their expectations and defined parameters.
Individualism vs. collectivism (IDV):Peoples’ time is placed on high value and Hilton hotel industry needs freedom and privacy. They provide chances for enjoyment and individual expectations of different rewards. This industry is keeping privacy of customers.
Power distance index (PDI):PDI indicated a social acceptance of an unequal distribution of power. DoubleTree hotel industry centralised organisation and large gaps in respects and authority (Siakalli, Masouras, and Papademetriou, 2017).
Centralisation and decentralisation organisation structure
In DoubleTree hospitality industry, centralized organisation is efficient apart from customer satisfaction decisions. Industries’ owners developed industries’ missions and objectified other goals for customers.
Decentralised organisation is utilised by DoubleTree hotel industry, they use individual expertise and running knowledge for various hospitality management business. This industry management team ensures to handle different business circumstances.
Solution of issues analysis
- The DoubleTree hotel industry can make strong communication and make reliable relationships with customers. A proper way of communication can make good interaction between customers and industrial authority (Feldstein, 2019). In this way, they can improve their drawbacks.
- Customers’ have different expectations, so Hilton hotel industries’ authority should maintain customers’ demand and serve them best quality service as per their preferences.
These industrial staffs are quite irregular in their profession, so that staff of this industry should be aware about time management and customers can get comfortable service (Lee, and Lee, 2020).
References
Books
Feldstein, S., 2019. The global expansion of AI surveillance (Vol. 17). Washington, DC: Carnegie Endowment for International Peace.
Journals
Abdoh, H.M.B., Saany, S.I.A., Jebur, H.H. and El-Ebiary, Y.A.B., 2018. The Effect of PESTLE Factors on E-Government Adoption in Jordan: A Conceptual Model.
Adillón, R., 2018. DIAMOND MODEL: A theoretical framework for the sustainable development of tourism. Hos Tour Manage Int, 1(1), pp.6-18.
Barghouthi, O.A., 2017. Analysis of Competitive Advantage of the Basic Industries in Palestine Based on the Porter’s Diamond Model. International Journal of Marketing Research Innovation, 1(1), pp.25-39.
Beugelsdijk, S., Kostova, T. and Roth, K., 2017. An overview of Hofstede-inspired country-level culture research in international business since 2006. Journal of International Business
Studies, 48(1), pp.30-47.
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and changing business environment. Available at SSRN 3192207.
Kharub, M. and Sharma, R., 2017. Comparative analyses of competitive advantage using Porter diamond model (the case of MSMEs in Himachal Pradesh). Competitiveness Review: An International Business Journal.
Lee, S.M. and Lee, D., 2020. “Untact”: a new customer service strategy in the digital age. Service Business, 14(1), pp.1-22.
Mezzanatto-McNair, S., 2019. An Analysis of Business Strategies for Economic Growth and Expansion of Digital and Online Tech Industry: Southeast Asia and United States.
Mykola, I., Vadym, A., Lokutova, O., Anatoliy, P. and Romaniuk, I., 2020. Ways to develop brands and pr management of tourism enterprises with a focus on national markets. International Journal of Management, 11(5).
Siakalli, M., Masouras, A. and Papademetriou, C., 2017. e-Marketing in the hotel industry: marketing mix strategies. In Strategic Innovative Marketing (pp. 123-129). Springer, Cham. Wittkop, A., Zulauf, K. and Wagner, R., 2018. How digitalization changes the internationalization of entrepreneurial firms: theoretical considerations and empirical evidence. Management Dynamics in the Knowledge Economy, 6(2), pp.193-207.
Websites
Conserve-energy-future.com, 2020. 21 Greenest Countries on Earth in 2020, [Online] Viewed on 20 April 2021 <https://www.conserve-energy-future.com/greenest-countries-earth.php>
Hilton.com, 2020. Annual Reports 2020. [Online] Viewed on 19 March 2021
<https://ir.hilton.com/financial-reporting/annual-reports>
Sigtax.com, 2016. How to setup a company in Switzerland as a foreigner. [Online] Viewed on 19 March 2021 <https://sigtax.com/en/how-setup-company-switzerland-foreigner>
Statista, 2021. Market size of the global hotel industry from 2014 to 2018. [Online] Viewed on 19 March 2021 <https://www.statista.com/statistics/247264/total-revenue-of-the-global-hotel- industry/>
Travelingmitch.com, 2021. The Most Beautiful Cities in Switzerland According to Top Travel. [Online] Viewed on 20 April 2021 <https://www.travelingmitch.com/mostrecent/most-beautiful- cities-in-switzerland-itinerary>
Worldatlas.com, 2020. What Are The Major Natural Resources Of Switzerland?.[Online] Viewed on 20 April 2021 <https://www.worldatlas.com/articles/what-are-the-major-natural- resources-of-switzerland.html>
