BSc Accounting and Finance Assignment Sample Introduction
In 21st-century, globalisation has led to a complex marketplace where organisations find different opportunities to exist in competition. Focusing on this note, most organisations globally performing encounter dynamic external environments which affect their business principles and help them to get adopted to ongoing business trends.
Focusing on hundred best large company’s 2021 list, a Hilton worldwide holdings, an American multinational hospitality company, has been chosen to understand its business principles.
Question 1
(a) Company background identify its type
Hilton Worldwide Holdings INC is an American MNC operating in hospitality industry thereby providing customers with high-quality lodging and food services. This hospitality team has world-class hotels and resorts that attract customers from different parts of country where this company has been operating. Founded in 1919 by Conrad Hilton, this organisation with its headquarters in Tyson, Virginia had its first hotel in Texas and currently operates in 105 countries with more than 1 billion rooms globally (Hilton, 2022).http://BSc Accounting and Finance Assignment Sample
Currently, Hilton is operating as a fully independent publicly traded company after the exit of Blackstone and HNA. In 1964, Hilton spun off and became a public company with Conrad Hilton as its president. Since 2017 this organisation has been operating with its two properties in publicly trading companies including Park Hotels & Resorts and Hilton Grand Vacations (Company-histories, 2022).http://BSc Accounting and Finance Assignment Sample
Hilton hotels being a public company have been highly benefited by the government in terms of potential investments and stakeholders. At same time, this organisation has transparency in maintaining financial statements that help in determining their market value and shares.
Benefits and limitations of a public limited company on Hilton’s performance
Benefits of public limited company
- Being a public limited company, Hilton enjoys more potential opportunities of getting exposed to market demand, investors, customers and employees. In this context, Hilton is more attractive to customers, employees and suppliers thereby, making them enjoy better brand recognition and increase sales (Informdirect, 2022).
- In times of financial crisis, Hilton, being a public limited company has greater ability to raise share capital as it can sell its shares to the public and anyone can invest their money in this organisation. With this, Hilton has the possibility of having stock listed on an exchange thereby attracting investments and heavy funds in times of financial need.
Limitations of public limited company
- As a public limited company, Hilton is mostly dependent on board of directors and shareholders in taking any decision. Sole rights of owner do not get applicable and therefore if majority shareholders agree to bid, Hilton has a chance of getting holistic takeover (Guillet and Chu, 2021).
- Hilton is highly exposed to increasing legal regulations implied on them that restricts them from freely operating. This has been one of the major disadvantages of being a public limited company as most legal and regulatory requirements need to be maintained with transparency in service and financial statement maintenance.
(b) Comparison of two organisation with Hilton belonging from public limited organisational type
| Criteria | J Sainsbury Plc. | Marks & Spencer Group Plc. | Hilton |
| Sector | Retail | Retail | Hospitality |
| International presence | No international offline presence | 57 countries | 105 countries |
| Organisational structure | Hierarchical organisational structure | flat organisational structure | Divisional organisational structure |
| Leadership style | Democratic Leadership style | Consultative Leadership style | Transformational Leadership style |
| Number of Board of Directors | Chairman, three Executive Directors and six independent Non-Executive Directors | 7 directors and 2 key management personnel | 9 directors |
(c) Two contrasting legal structures of businesses
Sole Proprietorship and General Partnership are two contrasting legal structures that are greatly evident in recent businesses. Sole proprietorship refers to businesses that are entirely owned and run by one individual with no legal distinction between owner and business.
It is mainly used by small businesses and owners have unlimited personal liabilities for business risk, insurance and contracts (Zhang et al. 2020). On other hand, general partnership refers to association between two or more people in seeking business profit. General partnership is more formal as partners come into formal agreements and have their own shit result which calculates profit and loss percentage. In general partnership, organisations share liabilities and also seek decision-making help from partners.
Two advantages and disadvantages for each of identified legal structures
Sole Proprietorship
Advantages
- Sole proprietorship with one individual owner is much easier and cheaper to establish and operate business in market.
- The owner has control over the business and is responsible for all decisions that they make.
Disadvantages
- In sole proprietorship, owner has high exposure to risk as it is responsible for all liabilities incurred by its business.
- Investors generally do not invest in sole proprietor organisations as it is more exposed to this and investors find it much challenging.
General Partnership
Advantages
- General partnership is much easier to maintain as there are two or more members responsible for business.
- Profit and loss both are shared by owners based on their investment shares.
Disadvantages
- Partners get personal liability for business debts which creates a burden on them.
- Disagreements and conflicts among partners lead to poor managerial decisions in businesses that bring down productivity.
Question 2
(a) Two analytical tool for analysing Hilton’s external business environment
PESTLE
| Factors | Impact |
| Political | ● Currently, US has experienced a severe drop in its rank in political stability from rank 17 in 2020 to rank 28 in 2022 (US News, 2022).
● US-China trade war has created a disruption in different sectors operating in US market thereby affecting the tourism and hospitality sector mostly in receiving international guests. |
| Economic | ● Hilton with its headquarters in US is highly exposed to external economic factors which includes 7.1% inflation rate in March 2022 (Scotsman, 2022).
● A decrease in real GDP by 1.4% in the first quarter of 2022 has been evident with an estimation of an increase of 6.9% in GDP by end of fourth quarter (BEA, 2022). |
| Social | ● Changing taste and preference of customers towards luxurious stays in hotels and resorts has compelled organisations like Hilton to take up global market trends.
● Increasing population and other social factors like pandemic situations have greatly affected the hospitality industry with a severe shutdown for long-term with zero productivity. |
| Technological | ● US market has been one of the leading countries that gives rise to best technological innovations.
● US government has made high investments in technologies and R&D Department so as to benefit companies are with digitalisation and technological advancement (Özdemir et al. 2019) |
| Legal | ● US hospitality industry after outbreak of COVID-19 pandemic has been exposed to a large number of legal regulations set by WHO (Chalupa et al. 2021).
● US hospitality industry has been in favour of giving benefits to employers in terms of maintaining employee rights and minimum wage set by US government. |
| Environmental | ● US is considered to be one of the first countries who have taken initiative in maintaining net zero carbon emission by 2050.
● US hospitality industry has been coming up with digital and more sustainable methods of operation using renewable energy sources and waste management so as to contribute to environmental factors. |
SWOT
| Strengths | Weaknesses |
| ● As a public limited company, Hilton has high brand image in market with brand recognition and visibility
● Operating in 105 countries Hilton has established internationalisation trade with other stakeholders of different operating markets. |
● High market competition has been one of major weakness for Hilton as it has increased its chance of substitutability
● Hilton also has burden of understanding cultural diversity of different countries and frame their policies accordingly making it difficult for maintaining uniformity |
| Opportunities | Threats |
| ● With a brand image, Hilton gets opportunity of seeking potential investors and stakeholders with proper financial sourcing and better performance in international market
● Season has been first choice for global tourists because of its international presence and brand loyalty |
● Price for Hilton has always been kept marginalised because of increase in competition with lowers down their profit margin
● Hilton has a high level of debts that fixed their low market share and brand value in US market. |
(b) Implication of analysis to Hilton’s operational planning
Hilton’s operations have been greatly impacting human resources and procurement in terms of giving high-quality to customers and stakeholders (Perko and Smigoc, 2019).
Focusing on external business environments analysed using pestle and swatch, it has been evident that Hilton operating in multiple countries have emphasised on having a good understanding of employed culture and procurement. With high awareness of employee culture, Hilton has been successful in maintaining professional staff in their business operation.
Regular training based on global trends prevalent in the hospitality industry have helped Hilton in modifying their organisational policies and employee benefits. In addition to it, procurement reference to the action of obtaining raw materials from different sources of supply chain is mainly taken into consideration (Alibegović and Karalić, 2019).
Hilton with its global presence has enhanced its place in management with a constant financial resourcing from its stakeholders and maintaining hotel facilities and culinary items based on local vendors in different countries.
(c) 2 important environmental factors affecting Hilton
Waste management and usage of renewable resources in business operations are two most important environmental factors affecting the hospitality industry. Operating in the global hospitality sector, Hilton has great liabilities in maintaining waste from hotel and restaurant operations so that local surroundings do not get polluted.
Tourists who stay in resorts in popular hotels need to follow environmental guidelines in terms of proper waste disposal and management (Vudric et al. 2019). At the same time, Hilton has been making an effort in using renewable resources like solar panels, windmills and hydroelectricity so as to reuse and recycle energy for assistance. This has been one of major CSR policies of Hilton that have resulted in high financial investment in R&D.
Question 3
(a) Two main drivers of increasing international trade for Hilton
Competitiveness
Increasing competition in hospitality sector has been a key driver for International trade in Hilton in order to increase brand popularity (Chen, 2019). Operating in US initially, Hilton experienced great opportunities in other countries’ hospitality industry and therefore the increasing competition has compelled them to enter foreign markets and grab better productivity. Along with great opportunities, foreign collaboration with investors and partnership have also sought international trade in multiple countries thereby making Hilton one of the most globally found companies in the hospitality sector (Appiah, 2019). At same time, increasing competition has also allowed Hilton to formulate international strategies in understanding foreign culture.
Foreign currency exchange
Foreign currency exchange has been another factor for International trade affecting Hilton in terms of different currency value. This driver has helped Hilton in gaming but profit and loss based on the current evaluation (Alrawadieh et al. 2021). In operating in dollars, Hilton has experienced issues in doing transactions and pounds and euros which have to some extent restricted them in international trading. In majority of cases, Hilton preferred to set overall cost valuation in dollars which often made them Experience losses because of the high market value of dollars.
(b) Ways in which Hilton is impacted positively and negatively by international trade
With international trade, Hilton has been both positively and negatively impacted. In positive impacts of international shading and expansion, Hilton is currently experiencing a new customer base with potential partners and investors in the international market. Invading in foreign market, Hilton has high exposure to growing economies with proper balance between expenditure in profit margin (Mijatov et al. 2018). In contrast to this, Hilton has been negatively impacted with increasing market competition for international trade as being a global company, this organisation experiences competition from both local as well as international hospitality organisations. Along with increasing competition, foreign currency exchange has also been another issue for Hilton in operating internationally. International trade with other foreign currencies have made it difficult for analysing the profit margin and overall operating cost for Hilton.
(c) Impact of globalisation on Hilton and hospitality industry
Increasing globalisation has been a major factor that has caused organisations to internationalise as customers are trying to change their livelihood and increasing their expense on luxury stays in hotels and resorts. With international tourism and globalisation, Hilton has mainly emphasised on expanding their businesses globally as well as to give customers of all countries a better experience of living (dos Santos et al. 2020). In this context, it can be stated that organisations like Hilton have used globalisation as a great opportunity in formulating business strategies for international trade and partnership along with formulation of easy customer metrics.
Question 4
(a) Two specific operational activities are undertaken by Hilton
The operational activities that are mainly undertaken by Hilton include effective hiring of professional staff and training them so as to maintain the high efficiency in services. In Hilton, staff efficiency and transparent hiring is one of the major operational activities on which customers experience depends (Breda et al. 2020). Secondly, revenue management is one of the major operational activities of hotels like Hilton so as to examine the property valuation and the amount of revenue they generate from customer visits. Revenue management also helps in maintaining the equilibrium of the overall global expense from older branches of Hilton along with revenue from these international sub brands.
(b) Brief operational plan based on selected operational activities to achieve its corporate objectives
| Company name |
| Hilton Worldwide hotel Inc. |
| Corporate objectives |
| Hilton aims to fill the Earth with the warmth of hospitality and give customers an exceptional experience of comfortable stay and high-quality food.
Its main corporate objectives include ● To increase sales and profit margin although global sub brands that come under Hilton. ● To ensure customer loyalty to every guess, colleagues and investors with high profitability and bitter experience of services. ● To ensure environmental sustainability through effective implication of CSR policies so as to contribute positively to the environment. ● To maximise service efficiency with reliability and be ahead of market competition with strategy decisions. |
| Existing strategies |
| Currently, Hilton have been mainly emphasising on coming into partnership and seeking investment from foreign brands so as to make it easier for them to internationalise. Internationalisation has been their most top priority along with maintaining sustainability with technological advancement. In this context, it can be further stated that Hilton has emphasised on maintaining health and hygiene, safety and security of customers, especially after the outbreak of COVID-19. The outbreak of COVID-19 has changed the overall legal formulations of Hilton where digitalisation in online payment mode and booking have been made easier for customers. |
| Key performance indicators |
| ● Increase in sales and profit margin.
● More investments from stakeholders with long-term contracts. ● Increasing repeated visits of customers. |
(c) Three key considerations for managing and leading effective operational plans
The three main considerations for managing and leading an effective operational plan include
- Analysing corporate objectives so that employees from the very beginning can be clear about the aims and objectives that they need to strive for.
- Planning a specific budget so that the overall expenses can be counted and an estimate can be made there by forecasting an easy and quick method for structuring the revenue and profit margin (Chen, 2019).
- Risk assessment is also a part of an effective operational plan so that identification and mitigation of risk can be done beforehand thereby leaving no scope for losses.
Conclusion
Hilton, being a public limited company has been highly benefited in terms of transparency, capital investments and brand value. On other hand, this organisation has also been exposed to an increasing number of legal regulations and are more vulnerable to takeovers and ownership control issues. Hilton hotel operating as a public organisation since 1964 and global hospitality market have received severe attention from media and investment professionals.
References
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