Positioning And Differentiation Strategies Of Intercontinental And Hilton Corporations Research Paper Examples

Introduction

The modern dispensation is constantly and persistently engaged in establishing measures that can enable them have a competitive advantage over their competitors. Ideally, the objective of every company is to increase their market portfolio as a measure of enhancing profitability. Positioning and differentiation strategies employed by each entity determine the success rates of the individual companies. The hospitality industry is one of the areas where competition and constant expansion is witnessed on various occasions depending on market volatility. Hilton and the intercontinental hotel are some of the companies in the hospitality industry that have experienced immense success through their strategies are fundamentally different. This paper offers a comparative analysis of the differentiation and positioning strategies employed by the two companies.
The principle basis of positioning, as a strategy is to ensure that an organization can identify with precision various opportunities and challenges in the market and effectively devising measure of achieving the predetermined objectives. Differentiation on the hand is a strategy employed by companies or organizations to develop products that are aimed a particular target group (O’Neill et al., 2006). The approach that was previously taken by Hilton hotel has to a greater extent proven to be detrimental to its well-being. Case in point is that Hilton has previously embraced the stand-alone approach in the hotel industry. Such an approach has exhibited a number of challenges such as capital risks. The hospitality industry is highly competitive and inherently exposed and with the approach Hilton stood at a crossroad. Developing the brand has experienced immense challenges because of the volatile operating environment. The strategic position that has been adopted by the company over time has ensured continual relevance in the market (O’Neill et al., 2006). Essentially, Hilton has adopted a strategy where it focuses on building the brand other than laying emphasis on profitability.
There are fundamental positioning elements that can be employed in discussing the extent to which the company has gone in reinventing itself. To begin with, Hilton has tremendous lodging and boarding facilities that are characterized by luxury, average pricing and extensively upscaled. Moreover, Hilton group of hotels has a brand campaign in almost all the locations where it is established (Applegate, 2008). Such tendencies have ensured an increased competitive advantage over its competitors. However, through its immense branding campaigns, increased competition has the potential of affecting the pricing strategy of the company effectively leading to losses. The strong brand that is manifested by Hilton group of companies is effective in ensuring growth in terms of revenue collection (Applegate, 2008). Consequently, the fact that the company has a wide range of hotel services has strategically positioned it as significant choice in the market.
The differentiation strategy at Hilton is focused on enhancing the relationship between the company and the clients. The company focuses on building a strong relationship with the customers as a consequence of building a broad customer base as well as maintaining loyalty (Applegate, 2008). Hilton focuses on three major strategies as a consequence of dealing with constant competition. The relationship between the company and the clients is based on meeting the needs of the customers as appropriate. Ideally, the principle agenda as established by Hilton hotel is to meet the needs and expectations of the customers through offering standardized services as appropriate. While the company focuses on building its brand, the agenda is to enhance its relationship with the customers to ensure customer satisfaction. It is, therefore, important to note that despite the volatile and competitive hospitality industry, Hilton has remained as a favorite brand in most markets (O’Neill and Mattila, 2004). Effective positioning and differentiation strategy have enabled the company to establish itself in the market as appropriate.
The influence and strategic position of the Intercontinental group of hotels in the hospitality industry cannot be overemphasized. Intercontinental hotel that has got British orientation is by all standards the best on the market and surpasses most of its competitors to a greater extent. Even though Hilton has a strong brand, Intercontinental has proved to be a significant player in the hotel industry. The company has over 535 000 guest houses and about 3500 hotels spread on a planetary scale (O’Neill and Mattila, 2004). It is estimated that close to 120 million customers choose to get accommodation in the prestigious facilities of the Intercontinental hotel (Intercontinental Corporation, 2007). The company has a unique positioning strategy that focuses on various segments of the market. Consequently, the company focuses on the mid-markets globally.
The Intercontinental hotel has a strategy that focuses on the quality and pricing. Quality is based on the services offered by the company is the respective segments. Intercontinental group of hotels has got the strongest brand compared to Hilton hotel (Enz, 2010). There are extensive holiday inns operated by the company. Each of the brands is spread based on an elaborate market segmentation program. Moreover, compared to Hilton has great loyalty program that is manifest in all brands. The ‘Priority Club Rewards’ program is a membership program where all the customers are allowed entry. Close to 24 million members worldwide subscribe to the intercontinental loyalty program (Intercontinental Corporation, 2007). The Intercontinental hotel has a huge financial base that is capable of funding its project to the logical conclusion. An influential capital base that is rivaled by a few companies supports the brand of the company. Essentially, Intercontinental is strategically placed to influence the market in a number of dimensions due to its competitive advantage (Enz, 2010). The bed capacity at the Intercontinental Hotel is the leading compared to Hilton group of hotels.
The fact that Intercontinental has specific segments it targets with its products makes it have a tremendous competitive advantage on other hotels such as the Hilton hotel. Case in point is that the brands serve various categories of clients in the market making it the best in terms of strategic positioning. The differentiation strategies employed by the Intercontinental hotel is not homogenous and are diverse based on the market. For example, the Canadian market is served by different brands targeting various segments of the industry (Enz, 2010). The economy brand serves a number of customers because it has relatively favorable prices that a number of clients can afford. Such incentives are rare among the competitors who are specifically focused on profitability.
Hilton until recently had the primary focus on the traditional objectives of profit making. However, the increased competition compelled the company to focus on the brand other than the primary objectives. While Intercontinental hotel focuses on the brand as a primary objective, it has specific segments of the market that it emphasizes on as appropriate (Noe 2011). The brands are specifically positioned for different markets effectively increasing its competitive advantage in the market. Intercontinental group of hotels is, therefore, the market leader in the hospitality industry.
A comparative analysis between Hilton and Intercontinental group of hotels indicate wide disparities. For instance, Intercontinental has better positioning and differentiation strategy than the Hilton hotel. The brand of Intercontinental hotel is efficient and has a good position in the market and has a specific orientation to various markets around the globe. Essentially, the brands are oriented and are meant to serve different customers (O’Neill and Mattila, 2004). Consequently, the brands have different pricing strategies that meet the need and objectives of the customers. The strategic positioning and differentiation strategy employed by Intercontinental hotel has ensured its huge customer base that is established on a planetary scale. Even though Hilton hotel has a positioning and differentiation strategy, it has a narrow objective. However, it is important to note that Intercontinental and Hilton's hotels are some of the global leaders in the hospitality industry with a huge customer base around the world.

Conclusion

Positioning and positioning strategy are some of the most important aspects of ensuring that a company’s competitive advantage is ensured in the market. The hospitality industry is one of the most competitive with players constantly and persistently embroiled in outwitting each other in terms of increasing the market portfolio. Hilton promotes its brand through enhanced relationship between the customers and the company. The relationship between the company and the clients is based on meeting the needs of the customers as appropriate. Ideally, the principle agenda as established by Hilton hotel is to meet the needs and expectations of the customers through offering standardized services as appropriate. The positioning and differentiation strategy employed by the Intercontinental Hotel is based on its brand that has a specific orientation to various segments of the market.

References

Applegate, L. M. (2008). Hilton Hotels: Brand Differentiation through Customer Management. Retrieved from <.faculty.mu.edu.sa//1361962401.026customer%20relationship95.pdf>
Enz, C. A. (2010). Hospitality strategic management: Concepts and cases. Hoboken, N.J: John Wiley & Sons.
Noe, R. A., & Noe, R. A. (2012). Human resource management: Gaining a competitive advantage. New York: McGraw-Hill Irwin.
Intercontinental Corporation. (2007). InterContinental Hotels Group PLC: Holiday Inn Division. Pearson Education Canada.
O’Neill, J. W., and A. S. Mattila. (2006). Strategic hotel development and positioning: The effect of revenue drivers on profitability. Cornell Hotel and Restaurant Administration Quarterly, 47 (2): 146-54
O’Neill, J. W., and Mattila, A. S. (2004). Hotel branding strategy: Its relationship to guest satisfaction and room revenue. Journal of Hospitality & Tourism Research, 28 (2): 156- 65.