Business Case Essay: Critical Analysis On The Case Studies Of Hilton And H&M
Question
Task:
1.Your task is to write a business case comparing two companies from the following web
site: https://www.worldsmostethicalcompanies.com/honorees/
1.Please make sure that you choose two companies from different countries.
2.Undertake a cross-case comparison, which correspond to week 2-4 topics, with a focus on
critically analysing the impact of a range of internal and external contextual factors on the performance and decision making of your chosen organization:
a)How are the business and governance structures of your chosen companies different/similar, and why might this be the case?
b)What are the environmental factors that influence your chosen companies’ performance and/or decision-making?
c)What are the top three risks your chosen companies face and how might this influence their decision making?
d)Make 3 suggestions regarding how the companies might improve their business practices.
Task description
1.Your business case analysis must include at least five (5) peer reviewed journal articles published after year 2009 from the list of journals (see next page) provided.
2.You must include the doi for each journal article on your reference list. Please note that this is a suggested list of reference sources, and you may use other journals, but please make sure that they are of a high academic quality. For example:
You should search the library databases via the online ‘advanced search’ function of the CQUniversity library. By choosing the ‘advanced search’ function you can select the actual journal you wish to search.
Answer
Introduction
When any enterprise starts a business, the management and owner are optimistic about achieving success and growth. In this business case essay, two different companies are taken of two countries such as H&M of Sweden and Hilton of the United States. Companies are involved in the business of the Apparel and hospitality business respectively. The case study of Hilton and H & M are described here with analysis and critical thinking by different journal articles. The governance and business structure of companies, environmental factors that influence performance and decision making or organizations, the major risk faced by the enterprises. The suggestions are also provided in the context of business case essay for the improvement of a business. Companies face certain challenges like technological issues, management issues; environment issues that effects business growth and performance.
Body
How are the business and governance structures of your chosen companies different/similar, and why might this be the case?
H & M is the retail clothing giant examined in the segments of business case essay and its headquarters is established in Stockholm having offices in more than 20 countries. H & M has also 20 production agencies in the world that are responsible for contact with 900 independent suppliers. Among them 11 agencies are located in Asia, 9 in Europe and 1 is in Africa. The stores of company has operational and ownership control. H&M headquarters decides what to produce and how to carry out advertising campaigns. The business structure of the Hilton Hotel is hierarchical because it's a massive size that includes 13 brands offering 140 million guests in 2015. The structure is divided into such divisions, ownership division includes 146 hotels with 59463 rooms that are leased and owned by Hilton (Styhre, 2018). Franchise and management division comprises 4419 hotels and 691887 rooms and the other one is timeshare division includes 45 properties and 7152 units.
The investigation carried on the business case essay signifies that the corporate governance of H&M includes shareholders, CEO, a board of directors to the executive management team and different country managers are based on regulations, external laws, recommendations, and internal rules. The board involves two deputies and two employee representatives, who are selected by the respective employee organization. CEO is appointed by BOD who is accountable for company management. The BOD of Hilton hotel acting based on the nominating committee and corporate governance that adopted and developed a framework of corporate governance rules and principles. The main responsibility of directors is to do their best judgment for the best interest of stockholders and company (Styhre, 2018). The Hilton hotel chain owner claims stolen computer documents were used to develop new luxury brands. In the current era, legal implications have cost a high loss to organizations. Both the companies have their specific benefits and their ownership is particularly related to property rights and individual rights.
What are the environmental factors that influence the performance and/or decision-making of the companies selected in the context of business case essay?
H&M and Hilton PESTEL analysis
Politica: The Company has franchised outlets in various countries and markets which are highly politically unstable like Lebanon and Egypt. Due to some regulatory factors, the company has to team up with franchising partners to function their brands in Kuwait, Oman, Saudi Arabia, and Thailand in spite of franchising not a part of the organization expansion strategy. Political factors in the hotel industry can influence a large number of tourists, business travellers directly or indirectly. Threats or risks of terrorism acts majorly affect the number of visitors in the UK and made a negative effect on the market performance of Hilton.
Economic: The sales of H &M are increased by 7% in 2017 from June 2016 in spite of the negative impact of Brexit on currencies. The savings rate, foreign exchange rate, inflation rate considers the investment and demand of the economy. Certain economic factors may affect the performance of Hilton when it is not considered such as unemployment rate, education level, the skill level of the workforce, etc (Blahová et. al., 2015).
Socio-cultural: H&M announced its trending designer creation because people are more influenced by celebrities and media to follow the materialistic and luxurious lifestyle. Attitudes and beliefs of people play a great role in the marketing of Hilton and to understand the demands of customers.
Technological: H &M develop their app for phone devices; currently introduce the use of the H & M club function that permits customers to receive award points from the store and online shopping (Solakoglu &Demir, 2016). The catering industry made a high impact on the performance of Hilton with the development of technological infrastructure.
Legal factors: In the last two years, H & M has been included in legal disputes of infringement by the clothing retailers. Now, the findings obtained from the study analysed in this business case essay clarifies that the company adopted a risk management system to ignore such disputes. Immigration procedures and rules of gaining a UK visa are very strict, and it impacts the performance of Hilton.
Environmental factors: The aim of H & M is purely renewable by 2030 that means all goods will be generated from old items of the firm, and that is durable and recycles materials. Tourism activities create pollution that disturbs the environment and animals’ at large (Blahová et. al., 2015).
What are the top three risks your chosen companies face and how might this influence their decision making?
Three risks are faced by Hilton Hotel are mentioned below within this business case essay:
Guest behavior: Guests are the energy for the hospitality industry, without them, the business cannot make money. Guests can be a threat directly and indirectly, for example. In October 2011, in the Maryland Department of mental and health hygiene exposed Legionella bacteria in water, people fell sick due to the disease. Hotels have to put internal controls to handle guests and ensure the safety of travelers during the stay.
Branding; Hilton rely on brands to make the customers, these are familiar with guest and made a trusted market. For example, Hilton led to infringement of copyright from prestige destinations and Lawsuits, which alleged that the hotel infringed on the trademark and unfair competition (Cheese, 2016). It can be solved by maintaining risk management software.
Staff: It is a typical risk, at the time of recession; it is difficult to join other places. When the economic situation improves, employees have both options in and out of the place. It means hotels have a high risk of retaining their skilled employees. Hilton launches new retention plans and latest strategies to support employees and motivating them towards the business goals and objectives to attract guests with their behaviour (Solakoglu &Demir, 2016).
Threats are faced by H & M:
Weather: the products of H & M are purchased for sale based on normal climate. Changes from normal climate conditions affect revenue and sales. It is correct at the period between two climates from summer to autumn and from autumn to cold. Foreign exchange; rapid and large exchange rate changes, in the respect of USD that is source currency, makes a significant impact on buying cost. The research on business case essay illustrates that the translation effects rose concerning nest assets on company consolidation on the foreign sales of H & m balance sheets (Cheese, 2016). Taxes; the H & M comply with international and national tax regulations, and pays taxes as per local regulations in the nation where the company operates. The guidelines of OECD on transfer pricing is affected in many ways, tax organizations in several nations as well, that questions on the outcome of H & M.
Make 3 suggestions regarding how the companies might improve their business practices.
H & M can improve its business performance and growth in the market in a certain manner such as:
Product test: test the clothes materials in the Market to take an idea for how can it perform or broad range. When any new design clothes are manufactured then surveyed market and collect the opinion of customers about their requirements. Social media websites are a good method to advertise products. Know your customer; to grow more in this competitive era, it is necessary to know your customers their demands. The services and products must reflect the wants of customers. The success of a company is based on fulfilling the desires of customers (Davis, 2018). Pricing strategy: it is to understand that the price of products is not so high and not much low; it must be in the budget of the customer. The price strategy discussed in this business case essay is based on supply and demand function. To be competitive, sometimes discounts and offers are provided to customers that increase sales of the company. Prices of H & M products are generally high from other brands that are why the company is facing the issue of dead stock all the time.
Hilton hotel enhances its business practices in such a manner:
Keep staff happy: The readings used to develop this business case essay mentions that employees are precious assets and it is necessary to keep them encourage and happy who focused on guests. Boost the morale of the team by cutting costs, increase customer service and enhance revenues and Extra benefits to be given for their efforts and ideas.
Private functions and special events: when the hotel has space, then improve group bookings by making business conferences, reunions, special events, family gatherings, and marriage parties. Special events such as Hot Tub gateways and lover's weekends at the time of winter season may fill rooms like normal seasons customers (Davis, 2018).
Far from competitors: provide the best reason to select the Hilton hotel, by offering them reasonable prices, free amusement, outstanding customer service by the pool, etc.
Conclusion
It is concluded from the business case essay that both organizations are from different industries and different countries but serve their products and services in many different nations. The business and corporate governance structure vary from its services. Learning diversity is a typical aspect for handling employees, decision-making processes, better performance and achieving the trust of guests and customers. There are certain problems faced by organizations but it can be solved by effective decision making, strong planning, and strategies, knowing the demands of customers. These are the basic strategies to be followed by companies for better business practices.
References
Blahová, M., Haghirian, P., &Pálka, P. (2015). Business case essay Major factors affecting the contemporary Japanese business environment. International Journal of Productivity and Performance Management, 64(3), 416–433.doi:10.1108/ijppm-09-2014-0138
Cheese, P. (2016). Managing risk and building resilient organizations in a riskier world. Journal of Organizational Effectiveness: People and Performance, 3(3), 323–331. Doi: 10.1108/joepp-07-2016-0044
Davis, P. J. (2018). Getting employees involved in strategic planning. Journal of Business Strategy. DOI:10.1108/jbs-04-2018-0060
Solakoglu, M. N., &Demir, N. (2016). The role of firm characteristics on the relationship between gender diversity and firm performance. Management Decision, 54(6), 1407–1419.doi:10.1108/md-02-2015-0075
Styhre, A. (2018). Corporate governance varieties: Locke and Hegel’s philosophy of right and the roots of corporate governance traditions. Business case essay International Journal of Organizational Analysis, 00–00.doi: 10.1108/ijoa-02-2017-1127
