Global Strategic Management Case Study

Introduction - Evaluating External Environment and CSR Strategies of Hilton & Marriott Hotels

The global strategic management is a mixture of globalization and its impact on business. It involves designing of plan, strategy and allocation of resources to achieve established business objectives. It also includes identifying challenges of business and evaluating progress for measuring the performance of the business. The strategic management is important to evaluate the present position, to make strategies and to measure the implemented strategy's effectiveness on business.

The report will state about two businesses in the hospitality industry Hilton Hotel and Marriott Hotel. It states the external environment of the two businesses and compares their capabilities in terms of competitiveness, market and technology. It contains the CSR initiatives and social and environmental innovation of two businesses. The report includes advantages of CSR like increase in reputation, customer loyaltyand employee retention and shareholder value. The risk includes increased cost, decreased profitability and toharm to business image on non-fulfilment of CSR. The report will highlight some potential CSR policies and the role of sustainability in the profitability and growth of the market.

TASK 1

External Business Environment and comparison of capabilities of two companies

External Business Environment of two hospitality companies Hilton and Marriot are as follows:

• Political Factor- Hilton and Marriott hotels are the most well-liked global hotels. The political environment of the country in which hotels operate must be stable. A country with a less stable political environment affects hotel revenue adversely (Leroi-Wereld, 2021). People will fear to go those countries as a result number of visitors will decrease.
• Economic Factor- A business must examine the economic condition of a country, before commencing a business in the specific country. Economic factors like interest rate, inflation rate and GDP of a country directly and indirectly affect the business. The business of hotels should operate in countries where people have high disposable income. It helps generate more revenue.
• Social Factor-These hotels are globally popular. Social factors like consumer lifestyle, demographics, income, and culture affect the business. With the change in income spending habits also change. An increase in income influences people to spend on things which give them comfort, as a result, the revenue of the hotel business increases.
• Technological Factor- It is essential to make improvements in technology to remain in a competitive world. It improves customer experiences and reduces the cost of the company. In the world of digitalization, hotels should accept modes of payment and provide service of online booking for the convenience of customers.
• Legal Factors- The country in which the hotel is operated is affected by laws and regulations of that country like employee law, and customer law (Hilton PESTLE Analysis, 2023). To avoid government interference, hotels should follow these rules. Hotels keep a check on laws as this may amended by the government. This factor increases the cost of the hotel and impacts the revenue of the hotels.
• Environmental Factor- People are becoming aware of the environment. They focus on things whether the hotels have proper waste management or what they are doing to protect the environment. Every country has different standards for the environment. People encourage hotels that make efforts to protect the environment as a result goodwill of hotels increases.

There are various complexities in, the VRIO framework used to understand. It stands for valuable, rareness, intimation risk and organizational competency. It is used to evaluate hotels' internal resources and their capabilities to know the hotel`s superiority over its competitors, for maintaining a higher position in the market.

The competitiveness of both hotels

Marriott is a market leader and gives strong competition to Hilton. For the safety of customers during the pandemic, Hilton introduced a cleaning program for disinfection and cleanliness for 18 brands. Marriot Hotel has a strong code of conduct for providing quality services to its customers. For market development, Hilton launched a franchise in Asia-Pacific in the Chinese market in 2021. Marriott became larger by purchasing profitable brands.To be successful in a business, offering services to the customers that help in making an unforgettable experience. Reviewing feedback from customers aids in making some innovations in the chosen industry. Providing good services makes trust in customers and a good experience makes them visit again. Corporate social responsibility is important for competitive advantage in the hospitality industry it enhances goodwill, customer experience and profitability of the business (Kushniruk, 2023).

The globalization of market and technology

Hilton is spread worldwide. Its hotels and resorts are spreading in 91 countries. The owner has 3890 hotels with 642000 rooms. It is an expensive hotel. The Marriott hotel is spread across 127 countries and is kind of affordable.To provide more satisfaction to the customers and to improve their experience of hotels,the hotels have started use of technology. In the time of digital innovation, hotels use every mode to make payments. The hotels improve their online booking system, which helps improve customer experience at their hotel. Technology keeps connected with the customers. The hotels use a digital key system, unlocking rooms without plastic cards. The technology helps customers to stay connected with hotel associates for requesting services.

TASK 2

Analyzing and comparing the CSR practices of both the companies

CSR of Hilton Hotel

Corporate social responsibility is a responsibility that is fulfilled by the business to protect society and the environment from adverse effects from the activities done by the business. Every business plays a crucial role by fulfilling its corporate social responsibility. This practice helps the company improve its reputation by developing a good customer experience and boosting the revenue of the business. CSR initiatives by the Hilton to impact employees, the local community and the environment.

• Waste Management- To reduce waste, the company promised to reduce waste by 50% in 2030. For this, the company reduce waste produced in hotels. The company use a recycling process to decrease waste.
• Recycling of Soap- Hilton is the first hotel that recycles soap. The business introduced a Soap recycling program, in this, all used soap is collected by housekeeping and sent to the soap recycling partners. By sanitizing the soap, new bars are made for donation. This makes able to businesses stop sending soap to landfills.
• Avoid single-use plastic- To avoid using single-use plastic, the company has taken various steps. Hilton removed plastic straws, cocktail picks and sticks from the hotel. Remove water bottles of plastic from all meetings and events of the hotel.
• Education initiative- For education awareness among young people, Hilton is committed to helping the young generation reach their full potential by 2019. For this, young people are connected to the world of travel to experience new cultures, providing mentorships to develop professional skills and employment in their hotels worldwide.

A CSR initiative increases the goodwill of a company, attracts more loyal customers towards a business and increases the revenue of the business and share value.

Some of the criticism faced by Hilton Hotel for non-fulfilment of corporate social responsibility-

• As a CSR initiative, the Hilton must remove single-use plastic usage from their work area by 2019, but the business has not fully removed its use. The company remove plastic use by 2023.
• The Hilton Hotel failed to fulfil its corporate social responsibility, it failed to protect children against sexual exploitation.

Environmental and Social Innovation of Hilton

The Hilton Hotel has an Environmental, Social and Governance Strategy named as Travel with Purpose for operating responsible travel and tourism. Travel with Purpose has an environmental goal to cut down carbon emissions of the managed portfolio by 75%, and the franchised portfolio by 56% by 2030 (Aksoy et al.,2019).The social goal involves creating5 million opportunities for learning and career, achieving the standard of gender equality by 2027. The governance goal measures public affairs to support public policies that help in advance Travel with a purpose goal (Woodworth, 2020).

CSR practices of Marriott

The corporate social responsibility is essential to fulfilling, it provides a competitive advantage to the hotels. The Marriott launch SERVE 360 program as a CSR strategy. The aim of the strategy is doing business growth and keeps a balance between customer, stakeholder, environment and society (Marriott Hotels’ Corporate Social Responsibility Essay,2023).

Get Extra 10% OFF on your WhatsApp order!

use my discount

• Serve 360 program- CSR, thehotel builds a Serve 360 program. This CSR initiative of Marriott focuses on individuals, the environment and profits. This helps Marriott attract customers and remain competitive in the industry. In this program focus is on four areas-
• Protect Our World- Only providing quality services to clients is not enough. It is important to know the role of the local community,in creating better workplaces according to their needs and skills. Marriott Hotel promoted disaster relief to restore the lives of people after natural disasters.
• Sustaining Responsible Operations- To improve the environment and its growth, Marriott Hotel use modern technologies to reduce its environmental footprint. Appropriate education is given to employees for the management of energy and developing an idea to use water and renewable energy. Meters are installed to know the consumption of water by each hotel. Avoiding the use of single-use bottles and reducing food waste aids individuals in learning about their contribution to protecting the environment.
• Opportunity to Empower- Marriott Hotel provides opportunities to young people for education and training. The Hotel allows women to lead their departments (Ge, 2020). The hotel industry invites disabled people to work to remove inequality. It also helps immigrants find better opportunities for living.
• Respect Human Rights- To create awareness about forced labor, human trafficking and exploitation at the workplace, Marriot Hotel prompted education. The hotel gives respect towards tradition, culture and values, the people spend money to visit such type of places. Understanding culture is essential for creating human relationships and its worth for global tourism.

The business promises to reduce water use by 15%, food waste by 50% and carbon waste by 45%, providing help to 15 million people to benefit from business skills. The Marriott emphasizes the issues regarding housing and hunger needs, a greener and healthier environment, education for hotel careers, helps for poor and sick children and providing opportunities to disabled people.

The Marriott Hotel face some of criticism for not fulfilling their corporate social responsibility, these are as follows:

• The CSR of Marriott hotel regarding poverty alleviation is not good. For this, the method used by the hotel is not appropriate has to reduce the real challenges.
• The Marriott Hotel uses low temperature laundry for the cleanliness of the cloths used by the guest`s and employees of the hotel. Because of this, Marriott failed to fulfill its sanitation responsibility towards its guest and this lead to risk of high bacteria in clothes, become the reason of spreading disease.
• It is responsibility of any business or hotel to construct their business premise within the set guidelines but Marriott is unable to fulfill this because Marriott premises was established when the guidelines were not formulated.

Environmental and Social Innovation of Marriott

Marriott Hotel, as their environmental and social innovation, the hotel donates the time of pandemic like food to needy persons, necessary items that are needed by hospitals and frontline workers (Dionisio,2020). The Marriot organized 500 blood camps and was enables to contribute 1400 units of blood. The Marriott donated for training in human trafficking awareness and was able to aware thousands of hotel workers.The hotel is obliged to reach the level of net zero emission of greenhouse gases by 2050.To achieve global gender equality by 2023 a plan has been announced.Marriott follows practices within the hotel, to protect the natural environment where the business operates to keep the place good for work and visit.To address the problem of biodiversity, the Marriott is involved in environment sustainability projects and make investment in natural capital. For this, the hotel aids in protecting and re-establishment of habitats.

Advantages of CSR

There are various advantages of CSR as follows:

• Recognition of Brand- Corporate social responsibility always makes a positive impact on people, industry and the environment. CSR grabs the attention of people towards business. Making efforts to promote education, and donate for the betterment of society allows businesses to come in the eyes of customers (Wang, 2022). A positive impact through CSR attracts customers towards a business and enhances brand recognition.
• Increase Reputation- CSR plays a significant role in increasing the reputation of the business. Fair business activities, investment in practices for a better environment and charitable giving make a business efficient and create a good reputation among customers and society. A positive approach of customers towards business helps in increasing reputation.
• Enhance Customer Loyalty- Awareness ofthe environment increases in people. There are positive impacts of CSR, on society. The fulfilment of social responsibility attracts customers to visit hotels.An education initiative of Hilton and a contribution tothe blood bank of Marriott aid the business in enhancing customer loyalty towards the business (Ashour, 2020).
• Increase Employee Retention- The fulfilment of CSR includes creating awareness about working conditions, forced labor and exploitation. The business that is concerned about this type of issue is always able to create a suitable environment for their employees. This increases employee retention. Also, employees like to work with businesses that engage in fulfilling corporate responsibility.
• Increase shareholder`s value- CSR attracts more loyal customers to the hotels and their good experience at the hotel makes them visit again. It helpscreate a positive business outlook, and as a result, increased revenue of the business leads to increased shareholder value as well.

Risk relating to CSR

There are some risk related to CSR that are as follow-

• Increase Cost of Business- To reduce waste management and single-use plastic usage the business has to spend money. Donation of money for awareness programs and training of employees needs money. CSR activities increase the cost of business.
• Risk of harm to image- By fulfilling corporate social responsibility the business comes into the public eye. Every small action of business is evaluated by the people. Business commitment towards society is not fulfilled then it affects the customer base. It is the biggest risk faced by businesses regarding CSR.
• Decrease Profitability- A negative image is created if the business is unable to fulfil its social responsibility as it committed. It creates a negative impression on customers so they discontinue from taking services from such businesses. As a result, the revenue of the business decreases and overall profitability also declines.

TASK 3

Potential CSR strategy that enhances organizational success

CSR strategy is an activity of making a plan and performing activities that help in the improvement of people, organizations, society and the environment (Shao, 2021). This strategy helps businesses identify problems and aids in finding solutions by taking corrective actions. Potential CSR strategy that should be followed by business.

• Expansion of Research and Development- The hospitality business must expand its research and development process. It helps the business in improving technology. Technology aids businesses in enhancing their guest`s experience by offering services with the help of technology.
• Offering Organic Products- The business must offer organic products to their customer which are eco-friendly in nature. In today's time, customers are highly aware of the environment, so they demand organic products. This enables businesses to earn long-term profits in the business and success (Achmad, 2022).
• Program for Greenary- The hospitality industry is facing a challenge regarding food waste. The business as a social responsibility plants trees for spreading greenery. The main food comes from trees on which the hospitality industry operates its business. The business has to organize events for planting.
• Zero Waste Packaging- The business should more focus on zero-waste packaging. Packaging involves the use of plastic and businesses with no recycling policy adversely affect the environment. Therefore, Zero-waste packaging aids in reducing costs and increasing profitability and success.
• Sponsor Education- The business should sponsor the education of individuals as well as their employees. It creates a reputation for a business, by sponsoring education, businesses can get suitable and the best employees and employees feel confident and this increases productivity.
• Donate fund- The businessdonates funds for the relevant causes. For example, the hospitality industry donates funds for the training and development of employees, to eradicate poverty and to make schools and hospitals. This can aid in establishing a good brand image and a bond between businesses and persons who benefit from this.
• Composition of Waste- For waste management and to reduce greenhouse gas emissions, the composition of waste is essential. The hospitality industry is highly responsible for food waste. The business works on the composition of waste to protect the environment and society from its harmful impacts.

The role of sustainability offerings for long-term profitability

Businesses that focus on sustainability can always improve their efficiency, reduce costs and earn long-term profits.A business that sustainably operates a business is likely to engage more customers towards business by offering organic products. The customers create a positive mind for a business that sustainably operates a business, it engages more customers, and hence revenue increases as a result profitability of a business increases (Ertuna, 2019). Engagement of more customers aids businesses to expand their business globally, it also attracts more investors in the business, it increases the capital of the business which is essential for fulfilling more responsibility.

The 3R`s strategy of reduce,reuse, and recycle helps the hospitality industry increase its profitability. The 3R`s strategy emphasizes reducing the use of plastic and reducing the emission of gases. A business that uses 3R`s strategy has a positive image in the market and can attract investors, this leads to increased financial value of the business.The hospitality industry uses most of the energy. It is essential to save energy without affecting the client`s experience. Reduction in energy consumption with the use of technology leads to reduced cost and enhanced efficiency and aids in the long-run profitability of the business.

Customers prefer to visit such hotels that run a business with the purpose of profit-making with a responsibility towards society and the environment. This creates a good brand image in front of their clients as a result more customers are attracted. It enables businesses to enjoy higher profit margins or success of the business.Thus, when a business performs its corporate social responsibility, it always gives a competitive advantage to that business by changing the public point of view towards business, maintaining goodwill enhancing customer loyalty and stakeholder relationships. All points help the business achievethe success of the business.

Role of sustainability in the growth of the market, partnering with society and government

Sustainability helps the business in the growth of the market. It helps in creating a healthy and safe working environment for employees. It enhances the quality of life and makes a better future for the society. A business that emphasizes sustainability can attract customers, and investors enhance the reputation of the business and help the business to grow in the market. The partnership of businesses with the government aids in addressing social issues and finding a better solution by supporting people in society and encouraging cultural preservation. This enhancesthe brand reputation of a business and advancement for society with government initiatives.A business that focuses on waste management, and pollution control directly and indirectly works for the betterment of society. The business saves society from harmful impacts that cause several diseases while providing good services and experiences from their business. The partnership of business with the government is always beneficial (Matteucci, 2020). Fulfilment of responsibility by the business by constructing an environment full of greenery creates a healthy and happy environment for society. This attracts people to visit such places leading to an increase in customers towards the business.To promote sustainability, the government made some policies. The government give benefits to businesses such as exemption in tax, and grants for using eco-friendly technologies.

The CSR policy of a business establishes an environment that equitably treats people and ensures that the human rights of employees are protected. The business should eliminate bad working conditions and unethical behavior at the workplace leading to a better society. By finding a better solution for a societal problem, the CRS policy of the business makes a better society and enhances the growth of a business.

Conclusion

As expressed, global strategic management is essential for every business to expand its business in the global market. By making a suitable strategy businesses increase their sales, revenue and brand awareness. This report stated the market expansion by the Hilton and Marriott Hotel at the global level. It stated the corporate social responsibility that is fulfilled by the two hotels to enhance customer loyalty and brand awareness among the customers. It highlighted the corporate social responsibility of Hilton such as waste management, avoiding the usage of single-use plastic, and recycling soap. It also included the corporate social responsibility of Marriott Hotel regarding the Serve 360 program.The report stated the external environment of the Hilton and Marriott Hotel with the help of PESTLE. To understand the dynamic complexity of the two businesses, the VRIO framework is used. The report contained environmental and social innovations done by the two hotels. Thus, for success of the business strategic management and fulfilment of social responsibility is essential.

References

Books and Journals

• Achmad, W. and Yulianah, Y., 2022.Corporate social responsibility of the hospitality industry in realizing sustainable tourism development. Enrichment: Journal of Management, 12(2), pp.1610-1616.
• Aksoy, L., Alkire, L., Choi, S., Kim, P.B. and Zhang, L., 2019. Social innovation in service: a conceptual framework and research agenda. Journal of Service Management, 30(3), pp.429-448.
• Ashour, M.L., Ali, N.N. and Allan, M.S., 2020. Corporate social responsibility and competitive advantage: Relationships and mechanisms.
• Dionisio, M. and de Vargas, E.R., 2020. Corporate social innovation: A systematic literature review. International business review, 29(2), p.101641.
• Ertuna, B., Karatas-Ozkan, M. and Yamak, S., 2019. Diffusion of sustainability and CSR discourse in hospitality industry: Dynamics of local context. International Journal of Contemporary Hospitality Management, 31(6), pp.2564-2581.
• Ge, X., 2020. Exploring factors of corporate social responsibility in luxury hotels: The case of Marriott Hotel (Doctoral dissertation).
• Kushniruk, H., 2023. A STRONG BRAND AS A COMPETITIVE ADVANTAGE IN THE HOTEL BUSINESS. Publishing House “Baltija Publishing”.
• Leroi-Werelds, S., Verleye, K., Line, N. and Bove, L., 2021. Value proposition dynamics in response to external event triggers. Journal of Business Research, 136, pp.274-283.
• Matteucci, V., 2020. How can the hospitality industry increase corporate value aligned with sustainable development goals? Case examples from Hilton, Meliá and Sun. Worldwide Hospitality and Tourism Themes, 12(5), pp.509-523.
• Shao, J., Mahmood, A. and Han, H., 2021. Unleashing the potential role of CSR and altruistic values to foster pro-environmental behavior by hotel employees. International Journal of Environmental Research and Public Health, 18(24), p.13327.
• Wang, Q.J., Wang, H.J. and Chang, C.P., 2022. Environmental performance, green finance and green innovation: What's the long-run relationships among variables?. Energy Economics, 110, p.106004.
• Woodworth, W.P., 2020. Incubator for social innovation: HELP International as an NGO start-up for deep impact. Journal of Research in Business and Management, 8 (5): 1, 8.

Online

• Hilton PESTLE Analysis. 2023. Online. Available through: <https://pestleanalysis.com/hilton-pestle-analysis/>
• Marriott Hotels’ Corporate Social Responsibility Essay. 2023. Online. Available through: <https://ivypanda.com/essays/marriott-hotels-corporate-social-responsibility/>