Research Paper on Strategic Alliances: Leveraging the Benefits of Partner Integration

Introduction

The strategic alliance has become a norm in several industries where different firm come together in partnership agreements to pursuer a clear strategic collaborative objective. However, his partnership has different level of integration among its partner members. The partners in the agreement have limited control over its activities in the industry (Ren, 2018). Therefore, strategic alliance is a cooperation or coalition agreement between a company and other organizations to achieve specific goals, and this is achievable when two or more companies come together through sharing activities and resources to peruse a common strategy (Kooli, Cai, Tang, Beer, & Wright, 2016). The hospitality industry is one of the sectors across the globe that have taken the idea and concept of strategic alliances to provide quality services across the world (Chathoth, & Olsen, 2003). Several organizations have come together to, and for the purpose, the article the hospitality organization under review is Hilton Worldwide Holding Inc., formerly known as Hilton Hotels Corporation.

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Hilton Worldwide Holding Inc.

Hilton Worldwide Holding Inc. is an American multinational hospitality organization that and franchise broad portfolio resorts and hotels. The company was founded by Conrad Hilton in 1919, and it is currently being led by Christopher J. Nassetta. The headquarters of the company are in Tysons Corner, Virginia. By March 2019 the firm had about 5,757 properties that had 923,100 room in 113 countries across the globe. Before the December 2013 IPO, the organization was ranked 36th largest privately-owned firm in the US (Dixit, & Sotiriadis, 2015). The firm has about 15 brands across different market segments. They include Conrad Hotels and Resorts, Tru by Hilton, Curio - A Collection by Hilton, Waldorf Astoria Hotels and Resorts, Hilton Hotels and Resorts, Hilton Grand Vacation, DoubleTree by Hilton, Home2 Suites by Hilton, Embassy Suite Hotels, Homewood Suites by Hilton, Hampton by Hilton, and Hilton Garden Inn. The largest shareholders in the firm are HNA group 25%, Blackstone 15.2%, and Wellington Management Group 6.7% (Dixit, & Sotiriadis, 2015).

Hilton Worldwide Inc. is a world leader in the hospitality industry operating in the hotel industry. This is a sub-segment of the vast hospitality industry. The company provides genuinely global and unique products across the world. The organization first hotel was opened in 1919, and it currently operates thousands of hotels (Salvioni, 2016). Over, the years the organization has experienced changes in offerings, inherently, market strategy, and business structure. Hilton has adopted several policies such as strategic alliance that has helped the organization to stay ahead of the other hospitality organizations across the globe (Hua, 2016). Its strategies alliance is crucial to the success of the organization as the hotels and resorts that are absorbed in the vast Hilton empire bring a lot of experience and cultural understanding of the areas, they operate.

On the other hand, Hilton brings vast resources and global experience in the hotel industry. This factor is crucial as most of the hotels and resorts that the firm operates to deal with high-end clients and international clients (Hua, 2016). Factoring in the experience from other hotels from across the globe it would be easier for the organization to understand what individual clients need to keep them happy and offer quality services (Chathoth, & Olsen, 2003). The strategic alliance has been crucial in the success of Hilton hotel franchise as it has enabled the company mater some of the essential strategies such as market segmentation, brand variety, upscale segment, and combative advantages to become the leading organization the hospitality industry.

Brand Variety

Hilton had 15 hotel brands that allow the organization to target different category of customers. Some of the top brands by the company are Conrad collections and Waldorf Astoria as they are high-end facilities and luxury brands. These chain of hotel brands attract some of the highest dollar value customers. The reason why these hotels are expensive is that they provide customized experience to the clients (Chathoth, 2016). The main difference between the two brands of hotels is location as Conrad has most of its facilities in Europe and Asia while on the other hand Waldorf Astoria has most of facilities in Europe and United States. Additionally, strategic alliance of Hilton Worldwide Inc. has enabled the business to identify key strategies which are crucial in the success of the company and they are the pricing strategy and a variety of brands that target different types of customers and market segments. The Waldorf Astoria and Conrad Brands in total they have 55 properties and about 19,757 rooms in the Hilton franchise. This represents about 2.5% of the total rooms available (Dixit, & Sotiriadis, 2015).

Market Segmentation

Hilton Worldwide Inc has divided its hotels into several sections where they can be compared according to their size. For instance, in the Upper Upscale the organization has Hilton Hotels and Resorts, Embassy Suites Hotels, and Curio - A collection by Hilton (Yang, & Buschman, 2017). Primarily, it is much easier to compare Embassy Suites and Hilton Hotels and Resorts because they are similar in size (Ren, 2018). Moreover, the Curio is much smaller than the other members of the Upper Upscale designation. Importantly, the Hilton Hotels and resorts comprise of 570 properties which have 208,762 rooms representing about 26% of the Hilton franchise (Salvioni, 2016). The Embassy Suites on the other hand, has 232 properties having 54,589 rooms representing 6.8% present of the Hilton Worldwide Inc. Lastly, curio has 31 facilities and 7,243 representing 9% of the organization (Dixit, & Sotiriadis, 2015).

The Hilton Hotels and Resorts stands out as the largest single-brand under the Hilton portfolio having many properties across the world. The brand mainly caters to the upscale traveler both internationally and domestically (Chathoth, 2016). The brand provides quality services and vast experience in its hotels and travelers will likely notice economies across its extensive network of hotels.

Upscale Segments

The company has four brands that can be categorized as upscale segments, and they are Hilton Garden Inn, Tapestry Collection, Doubletree by Hilton, and Homewood Suites. In this section the doubletree has 494 properties representing 14% of the organization's portfolio, Homewood suites 47,1004 room and 481 properties representing 5.9% while Hilton Garden Inn has 12.6% (Salvioni, 2016). The Upscale segments male up 33.3% of the organization's portfolio making it the most significant section of the Hilton Worldwide Inc (Ren, 2018). Consequently, the firm runs also the Upper Midscale which is the firm lowest tier. This consists Hampton by Hilton 27% and Home2 1.7% of the organization's portfolio (Salvioni, 2016). These brands provided comfortable rooms, reasonable prices, and other amenities to the customers. The strategic alliance adopted by the organization has helped the firm to serve all client regardless of their financial status (Chathoth, 2016). Therefore, the organization has compelling portfolio of brands that serve and targets customers in each segment. This is one of the main benefits of the strategic alliance that the firm has adopted over the past few years.

Competitive Advantage

The strategic alliance has helped Hilton Worldwide Inc. to gain a competitive advantage over its competitors in the hospitality and hotel industry. Primarily, the organization focuses on obtaining competitive advantage through quality differentiation that is mainly reflected in the pricing of the organization's products. The company provides products and services through a premium pricing strategy (Yang, & Buschman, 2017). The main advantage of this strategy is that it offers high level of customer satisfaction. Each client would like to go to a place where he or she gets the best service, and this is one of the things the Hilton has mastered.

Moreover, the prices of the company are reasonable and affordable. The strategic alliance has enabled the company rationalize its prices across the globe and obtain the needed experience and workforce to stay competitive (Gajjar, & Okumus, 2018). The services by the properties of Hilton have excellent qualities and contribute to the extraordinary experience for the clients. Additionally, the company uses pricing tactics such as dynamic pricing, customer segmentation pricing, and location pricing.

Consequently, strategic alliance and the operational and marketing strategies have resulted in the organization becoming one of the best hospitality organization across the globe. This is because the firm has Offred several hotel options over the past 90 years (Ren, 2018). Form its business in leisure, accommodation, amenities, services, and value the firm has gained a lot of experience. This enables the organization to stay ahead of its competitors as it understands different market and how they work (Krupskyi, Dzhusov, Meshko, Britchenko, & Prytykin, 2019). Thank the team of its dedicated staff members the organization is able to give the best experience and service to its clients (Gajjar, & Okumus, 2018). The organization is mainly dedicated to continuing providing tradition exceptional guest service to its client across the globe through its wide chain of facilities. Moreover, the facilities are strategical place so that they provide ease of access to the client.

Conclusion

Hilton Worldwide Inc. is the leading hospitality organization across the globe with its more than 5,757 facilities around the world. These facilities have been brought together through strategic alliance. This enables the firm to become dominant in the making through its considerable experience and quality service offered. Some of the ways through which strategic alliance has benefited the organization are through market segmentation, competitive advantage, brand variety, and upscale segments.

References

Chathoth, P. K. (2016). Historical evolution of hotel chains. In the Routledge Handbook of Hotel Chain Management (pp. 53-66). Routledge. https://books.google.co.ke/books?hl=en&lr=&id=9uAeDAAAQBAJ&oi=fnd&pg=PA27&dq=Hospitality+strategic+alliance+hilton+worldwide&ots=EqUyJwfrb7&sig=m4lNynC44TAyku_-n0i88Zfy_NM&redir_esc=y#v=onepage&q=Hospitality%20strategic%20alliance%20hilton%20worldwide&f=false

Chathoth, P. K., & Olsen, M. D. (2003). Strategic alliances: a hospitality industry perspective. International Journal of Hospitality Management, 22(4), 419-434. http://basharnajdawi.atspace.com/24.pdf

Dixit, S. K., & Sotiriadis, M. (2015). Strategic Alliances in the Hospitality Industry as an Expansion Strategy: An Indian Perspective. Collaboration in Tourism Businesses and Destinations: A Handbook, 77. https://books.google.co.ke/books?hl=en&lr=&id=2AOLBgAAQBAJ&oi=fnd&pg=PA77&dq=Hospitality+strategic+alliance+hilton+worldwide&ots=vpdi2kxffv&sig=uvtrnLNC3PDP6USnnbaONghQ9Ms&redir_esc=y#v=onepage&q&f=false

Gajjar, T., & Okumus, F. (2018). Diversity management: What are the leading hospitality and tourism companies reporting? Journal of Hospitality Marketing & Management, 27(8), 905-925. https://doi.org/10.1080/19368623.2018.1465505

Hua, N. (2016). E-commerce performance in hospitality and tourism. International Journal of Contemporary Hospitality Management, 28(9), 2052-2079. https://doi.org/10.1108/IJCHM-05-2015-0247

Kooli, K., Cai, H., Tang, X., Beer, C., & Wright, L. T. (2016). Better together? A hospitality case for umbrella branding. Journal of Bu...