Westward Hilton Strategic Management

Context and Scope. The Report basis its concept on the innovative ideas, vision, culture, and strategy applied to turn around the performance of Westward Hilton in the hotel industry. The scope captures strategic management policies and concepts subdivided into various chapters and subtopic for analysis and understanding. The report contains different Chapters that capture the roadmap to follow. The first one comprises a brief introduction to Westward Hilton and the framework of the whole Report. Section Two lays down the strategic direction which has the mission and vision statement of the organisation, and goals. Additionally, in Chapter Two, there is an analysis of values, mission, and culture. The third section illustrates how to identify the corporate and generic business strategy with Westward Hilton case study.

The next chapter examines the five forces that Porter discussed of strategic management. The next Chapter has the identification of the resources and competencies necessary for the success of the hotel. Chapter five also focusses on a more in-depth internal analysis of capabilities of the organisation and point of differentiation. Finally, Chapter Six contains issues such as recommendations, remedies, and limitations. The analysis in this report involves a case study and not a real situation that is currently happening on the ground. Additionally, the research is limited to a specific time and given context. The hotel industry was changing and growing first in Arizona. Despite the changes happening, Westward Hilton was facing competition from other competitors which almost lead to its bankruptcy until a new acquisition by Hiller hotel occurs. Hiller hotel owners employ Peter Green and task him with the responsibility of turning things around. Green identifies the challenges leading to poor performance such as organisational culture, lack of vision and mission and organisation own strategy. In conclusion, there is the discussion of problems identified and suggested recommendations. 1.2

Introduction to the organisation Hiller hotels acquire the bankrupt Westward Hilton with the aim of turning the fortunes around. For five years in a row the hotel was making losses, and therefore there was a need for change. The hotel's owner employs Peter Green in the capacity of general manager upon acquisition of the new property. Green who has been passionate about the hotel industry since he was a teenager develops a new strategy and innovatively engaging employees in a turn-around to the culture. The vision that he has for the Westward enables him to change the image of the hotel, build a good employee relationship, and make employees a part of the success through different ways of motivation. Currently, Peter is the executive vice president who oversees the operations of more than twelve international hotels branches of Hiller Enterprises that was the founding business of Hiller hotel and the other subsidiary hotels.

However, despite all the success for Hiller hotels and Green, today they have a big decision to make; the owners are contemplating selling Westward Hilton. Green will get a promotion into corporate position, but he cannot help worrying about the employees he will be leaving behind. During the seven years period, the hotel enjoyed success in profit, image and employees loyalty and thus Green wonders the impact the news will have on the culture, attitude and the morale of the people. Chapter 2 Vision, mission, and culture of the organization After drafting a clear roadmap, the next step involves pinpointing the specific Strategic Directions that can guide the plan. Strategic Direction is a vital driver to success because it provides direction and guidance to achieve the set goals. It also outlines the internal roles of each department and its staff and the plans they should implement while moving towards success (Mckeown, 2012). Corporate planning involves identifying overall financial objectives and applying them to the necessary areas of the business (Proctor, 1997). Failing to have a strategic direction means, running a business that lacks a clear vision of success even if it has the best management. The main components of a strategic direction are a vision, mission, core values, and strategies. 2.1 Components of the Mission and Vision Apart from a clear plan for the success of a business and ways of achieving it, there is also the question of the number of resources. Ideally, the whole idea of strategic direction is in the diagram below. Goals Measures and targets Strategies Results Desired outcomes In the case of Westward Hilton Hotel, a more elaborate approach was a requirement to capture the vision, mission, core values, and strategies. (Okumus, Altinay & Chathoth, 2010. The following is a strategy framework for the hotel.

Mission and Vision Strategic Analysis Strategy Implementation Strategic Formation Strategy Control Opportunities and Threats Strengths and weaknesses

A mission statement is a clear statement of the set targets and the means of achieving them (Hugh, 2003). Missions vary depending on the purpose of a company; therefore, it defines a company’s role, targeted markets and competitive advantages (Fallon, 2015). The mission should be made clear to all employees. A vision statement articulates the mid-term and long-term goals of an organisation. It is essential in directing the present and future goals of the business. Values and culture are interrelated in that the former determines the outcomes of the latter. Values provide guidance and assess the overall performance of an organisation; they directly influence the attitude and the means of resource allocation. Most companies make known their core values to their staff, clients and the general public. It is the employees’ attitude towards the Values that determine the organisation success. There is no permanency in Values because they are adjustable with changes in the technological and marketing environment. The Westward Hilton hotel did not have a clear vision or mission; its culture and operations were unrealistic because the management tried to imitate the Malcolm Baldrige Award (Enzy, 2009). The employees were not concerned with the success of their hotel but that of the hotel across the street; they were awed by the maximum flow of customers and such topics dominated their everyday discussions.

Green, however, tries to help the staff to see the essence in focusing on their hotel and the challenge of imitating the other. He argues that they do not have to capture large groups of clients but rather the corporates. Additionally, he wants them to use the available resources in propelling the hotel to the next level. They are then tailored to provide superior quality and exemplary service. The process of creating a new face for the hotel began with the injection of capital and unending support by the initial owners. After renovating the hotel to a have a modern, cosy look, it is possible to achieve mission and vision of the hotel. The renovation entailed changes to the general structure and acquisition of new furniture and other hotel equipment. Apart from the refurbishment, Green noted the importance of appreciating and incorporating the interests and needs of the owners, clients, and staff as the basis for creating a vision. The first step of generating a Vision was changing the ways of thinking and attitudes of the management and the employees; the idea was to become the number one top corporate hotel. The employees' attitudes transformed by often speaking about the vision and bringing a deep understanding and belief of the same. Green’s vision of the Westward hotel later became the formal vision of not only the hotel in question but for all Hiller hotels.

The guiding principles embedded in the vision and mission included dignity where there was an emphasis on treating all the staff equally. Core values comprised of honesty, trust, integrity, respect, and fairness when determining any decision. The other guiding principle was focus and emphasis was laid on deciding priorities and working on them first. The policy of achievement was included to ensure that all employees and management put together efforts aimed at achieving the set targets. The last guiding principle was a balance where the hotel sought to strike a balance among the staff, clients, and owners. The most uncomplicated yet strong vision that Green developed was “the friendliest place to visit.” It meant that the hotel was committed to creating a friendly and hospitable atmosphere for both employees and customers; that, every client and employee will feel comfortable each time they visit the hotel. The mission statement was “making people’s lives better through business.” Green further notes that achieving the set vision called for a need to better the lives of all stakeholders that is the owners, employees, and customers. Unlike in the former management where there was no communication or relationship with the employees; under the new vision, employees would be treated with dignity and in recognition of their contribution towards success. Additionally, for employees to concentrate on achieving the laid out goals, they have to be provided with a safe, flexible and fun working environment. On the part of the customers, the emphasis was on creating a secure and friendly environment where they feel valued and appreciated.

In motivating employees, Green ensured that all employees received dignified treatment irrespective of their position or background. He decided to tailor the staff wages with the current market rates; that way; they would be content and in turn offer exemplary services to customers. Green connected with the customers by spending time in the lobby where he communicated with the customers and even performed some tasks delegated to the employees. With the intention to monitor the progress of their realigned customer service, all customers were asked to fill comment cards when leaving the hotel. The new method of obtaining customer feedback was a significant deviation from the norm of sending them to the guest rooms. With the new approach, the management received more feedback. Once they shared the comments with the employees, they either improved on the areas that failed to gain excellent ratings or perfected those which impressed the customers. For the owners, their lives would be better by ensuring both short-term and long-term investment returns and that the business is beneficial to the community. Green was keen to ensure that the vision and mission were lived up to by all the stakeholders. Both the management and employees had to accept the Vision and practice it. Green inculcated a Culture of the free flow of communication between the employees and management (Enzy, 2009).

Previously, there was no communication between the administration and the staff; they expressed dissatisfaction in hushed tones. Under Greene’s supervision, information flowed freely from and to employees. Additionally, staff meetings were held monthly to evaluate customer feedback and seek ways of improving service delivery and distribution of quarterly bonuses. Furthermore, the employees and management strived to create a family environment. The family culture created saw the families of employees attend the hotel’s parties where the administration distributed school supplies. Chapter 3 Strategy identification A strategy describes the way an organisation is going to run to achieve the set goals and have a competitive advantage over other rival firms. A good approach will take into account the strengths and weaknesses of reaching targets of the company. Additionally, the plan should capture the mission, culture and vision needs of the organisation and the resources necessary to achieve such goals. Later, the body should consider the internal and external environment possible attacks and find the ways to handle the threats. In the case of Westward Hilton, Green identified and implemented three kinds of strategies that included Corporate, Business and Functional strategy. With an excellent strategic plan, all the employees get a direction and to follow to ensure the success of the company (Luecke, 2010).

However, all the strategies must be in line with the corporate strategy. Westward Hilton strategy aims to fight the possibility of bankruptcy and expand outside Arizona. A critical analysis of this hotel shows that there are issues that are adversely affecting its performance which in turn result in a low turnover. However, with new management in Green, the organisation is ready to turn things around. 3.1 Corporate Strategy According to Hill, Jones & Schilling (2012),

Corporate Strategy entails all the measures and strategies that the firm adopts with the aim of achieving its objectives and get a competitive advantage over the others in the industry. Employee motivation enables the company to utilise the workforce to the maximum and earn the loyalty of all the staff. Additionally, the organisation sets the long-term goals with an aim to initiate a productive corporate value by seeking new investment. However, for a successful corporate strategy, the company should carry out a regular review to assist in identification of areas that need strengthening or change. The main Corporate strategy that many companies adopt is product differentiation and cost leadership (Hill, Jones & Schilling, 2012). Peter Green upon arrival picks product differentiation strategy by ensuring all the staff gives better services to the satisfaction of the client in a place where customer needs and opinions did not matter initially. It is only through such a framework that the firm will achieve the long-term goal, which is growth-oriented or expansion. Hiller hotels adopt the growth strategy when they acquire properties almost going bankrupt and facilitating growth both locally and overseas. Green continues to earn promotion and more responsibility as the Hotels continue to expand. Upon arrival, Peter Green notices that for any hope of growth, the organisation required to motivate the staff to improve quality of services they offer to their clients.

The two factors to give the Hotel a competitive advantage over the others are cost and product differentiation to ensure quality products (Chapman, 2005). However, this was an extra cost to the organisation, but it yielded profits and expansion of the hotel. In turn, there are benefiting that everyone associated with the Westward Hilton is reaping such as increased income due to the rising profitability, job security, and promotion position. The organisation also enjoys employees’ loyalty, quality service to the client that results in growth, which eventually increases the profit and chances for expansion. Additionally, they could benefit from the economies of scale associated with buying in bulk, get things from local suppliers, and secure stock on credit or at a discount. However, to remain relevant in a competitive market, Westward Hilton should devise ways that will reduce operational cost for sustainability of the business in the industry. 3.2 Generic Business Level Strategy According to Porter, the company will have a competitive advantage over other if it can create a low-cost structure and product differentiation. The two make the two primary business strategy referred to as cost leadership and differentiation strategy (Gupta, Gollakota & Srinivasan, 2007). Additionally, to create a generic business level, Porter adds business scope and Focus on the business. The table below shows how the company derives its competitive advantage. Industry wide Single segment Scope Cost leadership/differentiation Focus Any industry can use the above strategy and hence the name, Generic Strategy.

Focus: Westward Hilton never focused on a specific market segment or otherwise niche market segment. The strategy here concentrated on doing the critical things first. They presented their brand uniquely without trying to copy their competitors at rates affordable in the industry.

Differentiation: Westward Hilton through the new management analysed itself and the market and realised that the problem was people trying to copy the competitors and not satisfying the customers. Green insisted on offering quality service in a bid to retain the existing customers and to attract others. Differentiation was the first thing initiated to increase the market share of the Westward. Cost leadership: Westward did not alter the prices of their service because Green felt that was not the factor affecting the performance of the business. However, there was the renovation of the hotel and improvement in of quality service. Additionally, the wages to employees and other motivation packages added to the cost of expenditure but with more returns derived from that strategy. Chapter 4 Industry analysis 4.1 Porters five forces Porter in his argument states that a Firm technical and financial resources determine its ability to compete with others in the industry. The framework he proposed in his book competitive strategy has five forces based on the scope of the organisation (Tripathi & Reddy, 2008). The five forces are universal and fit to determine the competitive level of any business in the market.

The summary of Porter’s five forces include can be illustrated in the model as shown below: Threat of substitute product Threat of new entrants Bargaining power of suppliers Bargaining power of buyers Competition among existing rivals, Threat of new entrants Threat of substitute product Bargaining power of suppliers Bargaining power of buyers All the forces listed above threaten the performance of the company, and therefore, the manager in charge should analyse these forces critically and create a framework that will help overcome the threats. The porter’s model applies to the case of Westward Hilton. Competition among exist existing rivals: There is a cut-throat competition in the hotel industry especially in Arizona. Before the acquisition of Westward by the new management, it was making losses. The original owner sold it out of bankruptcy after facing stiff competition from other hotels such as Sheraton, Radisson Blu, and Westin among others. However, to beat off competition, Hilton invested in quality service production and employee motivation tactics which in the long-run resulted in massive profit and hotel growth. From the case study of Hilton Worldwide, in the first three months of the financial year, its income grew by 106.67% while that of the rivals was 61.98%. The threat of new entrants who pose a new challenge to the existing hotels. The fact that new entrants want to have a portion of the market share, the competition increases and may result to lowering of service and product prices as well as other clients shifting their loyalty to the newly opened business. In Arizona, with the entry of renovated Westward Hilton and claiming a market share, improving its quality of service could have adverse effects on the profits of the other hotels. The threat of substitute is also available in the hotel industry. When a competitor makes a Substitute to a product offered by the rival, then there is a risk of losing the customer or the loyalty shifting to the competitor. Additionally, the demand for a particular food or drink diminishes if there is a cheaper substitute in the industry. New entrants in the area might consume substitute food without realisation, and the rival will stand to win because the client may never to differentiate the substitutes. Substitute for service delivery is in the form of people opting to stay at home or a friend’s house instead of a hotel.

Additionally, advancement in technology is substituting the roles of hotels through video conferencing unlike in the past when physical presence was a must. The bargaining power of the people who that avail the products (suppliers).According to Porter (2014), suppliers can raise the price and lower the quality or quantity of their supplies. However, however, a supplier can have a more influential bargaining power when the wholesalers are few. From the Hilton case study, the suppliers have a low bargaining power because there exist thousands of them worldwide lowering their negotiating power. Westward Hilton also has Diversity Program for all the suppliers which give them a higher purchasing power over the rivals. Bargaining power of buyers will depend on the number and costs of the product. In the case of Westward Hilton, Green decided not to lower the prices because he understood that the strategy would not benefit them. Although the customers concentrated in the rivals place at first, eventually his approach was working. When the customers bargaining power is high, especially when they can buy goods in bulk and concentrate other buyers, then such a client power of bargaining is higher than that of the other buyers. 4.2 Industry competitiveness Westward Hilton has created a right image for itself regarding the quality of food and service they offer. Their hospitality to the customers sells the brand of the Hotel. According to Parnell et al. (2014), a hotel is a place that requires quick service delivery; it is easily accessible with helpful and polite staff. Westward hotel is at the top of the hotel industry after registering a tremendous increase in pin annual income before deducting other fixed charges from 50.2% in 2001 to 72.5% in 2007.The hotel continues to be among the top ten of the best performing hotels in Phoenix.

However, the owners are considering selling the business because of the expected shocks expected in the U.S.A and the world at large. Some of the factors resulting to the shakeup of this industry and hence the need for speculators to consider selling their business is due to the recent breaking of the Subprime mortgage market and a likelihood of the looming recession in the U.S.A. However, despite the challenges the industry can still stand if the following features of competitiveness, higher production than the demand to avoid substitutes overshadowing the sector and ensuring staff loyalty to avoid costs of hiring and training new staff. 4.3 Strategic group map The success of any firm depends on the strategy formulated to lead towards achieving the set goals. Therefore, a wise manager will design a tool called the strategic group map that will lay a framework towards achieving the organisation target (Porter, 2014).It is a four-step process involved in group strategising as shown below: Identification of competitors Determine key variables Strategic group variables plotting Choose yes/no In Auckland airport, the likely direct competitors are: Hotel providing accommodation Gastro bar Fresh food retailer Café serving coffee Sandwich restaurant Indirect competitors include: Sushi shop Fitness Centre Donut shop The next step is to identify vital variables Menu Average price The below graph shows the key players in Auckland Airport showing the relationship between the competitors that is Westward Hilton and competitors in the industry. The X-axis represent the prices that different competitors in the industry are willing to offer while the Y-axis represent the product range/menu available in different outlets that are competing directly Key Indirect competitors such as Sushi and donut shop Direct competitors with Westward Hilton such as Gastro bar, Hotel providing accommodation, sandwich restaurant and Fresh food retailer 4.4 Decision From the graph, it is evident that there is fierce competition in Auckland Airport. The above analysis justifies the fact that price and menu should guide Westward Hilton before joining the new market. Thinking and planning will be a necessity for entering the new market Chapter 5 Analysis of organisational competencies 5.1 Core/distinctive Competencies of the Westward Hilton Hotel

According to Marino (2017), internal review of an organisation helps in the identification of the available resources, its potential, and essential competencies. In an organisational setup, competence refers to the ability to perform efficiently. Skills are also strengths that an organisation possesses as well as its openings for growth and the quality of customer service. Distinctive capabilities refer to the Strengths and opportunities which place a company ahead of its competitors. These factors influence the competitive advantage of an institution. According to Bryson et al. (2004), distinctive competencies are better than their core counterparts because they reveal the real potential of an organisation. Both the core and distinctive competencies are useful in increasing the viability and profitability of any business. In the case of Westward Hilton Hotel, the core and unique skills included its location, organisational culture, and rebranding as well as the human resource. The hotel location was in a different restaurant which attracted more clients before Green came in as the new manager. Since the competing restaurant had long queues, Green figured that this hotel would be the perfect place for corporates. He, therefore, created a unique niche for the hotel that was different from the rival hotel. Also, he instilled a new culture of friendliness and family-like setting among all the stakeholders. That way, the employees, management, and customers felt comfortable every time they were in the hotel. The new culture saw the increased flow of customers and employees whose dedication was to achieving the Mission and Vision of the hotel. The hotel employees got motivation from various occasions including the provision of quarterly bonuses and forums for airing their issues.

Their families also attended parties held at the hotel where they received schools supplies. The mentioned core competencies saw an increase in sales and general satisfaction among all the stakeholders. 5.2 Strategies of building value into the Westward Hilton Hotel product and service delivery Some of the Values that the Westward Hilton Hotel tried to build were customer service where both the manager and employees were actively involved in ensuring that customers felt safe and comfortable while at the hotel. By standing in the lobby for long hours, Greene instilled a sense of friendliness and enthusiasm in customers who were free to ask for any help from him or the other staff. Additionally, because of the excellent customer service, customers willingly responded to the comment cards where they had to rate the services they had received. The other value on which the management built its success on was ensuring that customers saw the value for their money. That is why they started by renovating the hotel and acquiring new furniture. That way, they were able to attract the corporate consumers to the hotel. Additionally, customers experienced efficiency in the enthusiasm displayed by the employees. Unlike in the old management where the staff rarely communicated and only wished to achieve the objectives of the hotel across the street, Green helped them own their Vision and Mission and brought in initiatives meant to accomplish the same. Innovation was another value that the hotel capitalised on. For instance, Green realised that most customers never filled the comment cards because they were sent up to their rooms with no follow-up. Green ensured that all customers filled the cards when checking out; the customers did not feel compelled to fill them because they had already received superior quality service. Chapter 6 Conclusion The provided information touches on the success of Green, a new manager of the Westward Hilton Hotel.

He successfully created a new hotel Mission and Vision, which changed the attitude of all employees, staff and owners. He also analysed the competition in the market and decided to choose a corporate niche. His vision for the hotel was one where customers and staff felt safe and comfortable while providing the owners with maximum returns for their investments. Greene utilised resources maximally in ensuring that customers saw the value for their money in the food, services, furniture and equipment in the hotel. For employees, Greene increased their wages to a competitive range and went ahead to add quarterly bonuses and other family-oriented motivations such as parties for their families. He also instilled a culture of owning the set objectives of the hotel; that way; all stakeholders worked collectively in achieving the hotel’s goals. The corporate approach and the memorable Vision and Mission appealed to clients who boosted the profits of the hotel. Additionally, the Westward Hilton Hotel exploited the core and distinctive competencies in increasing her profits. In the use of Porters five forces model, the hotel can identify worthy competitors around the same location. Porter proposes a five-force model that any business strategist can get a competitive advantage over the rivals. Additionally, the Westward Hilton case can identify strategies that are beneficial to their business such as product differentiation and cost leadership.

Moreover, creating a culture that pushes towards the achievement of organisation goals. Also in strategising, the owners can identify the SWOT of their business and base their decisions on such assessment. Recommendations Based on the understanding of the case study, the following recommendations are necessary Carefully select the location of the next hotel. It is vital to select a location that is in line with the drawn business plan. The plan dictates whether the new place will be in a commercial street, in a mall or any other strategic position. Devise alternative income generating avenues in the hotel. The new business plan should include alternative ways of gaining revenue especially during a recession and other harsh economic times. New marketing strategies The stiff competition posed by other hotels requires regular rebranding for survival. The plan should also include a marketing budget for implementation of new Strategy depending on those used by the competitors. Documentation of all procedures For purposes of accountability and transparency in the conduct of business, documentation of all the operations by the staff and the management.

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