hilton hotel change management

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  • 1. AGENDA Key Issues/Opportunity Areas Industry Analysis Financial Analysis Possible Alternatives Implementation of selected alternatives Contingency Plan Summary Q&AOPPORTUNITY SWOT PORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A

2. KEY ISSUE/OPPORTUNITY Brand differentiation Monitoring Performance Customer Personalization Alignment and ExecutionOPPORTUNITY SWOT PORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 3. KEY ISSUE/OPPORTUNITYIMPORTANCELOW HIGHBrand DifferentiationMonitoring Performance LOW URGENCYCustomer Personalization Alignment & Execution HIGHOPPORTUNITY SWOTPORTERS 5FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 4. KEY ISSUE/OPPORTUNITYIMPORTANCELOW HIGHBrand DifferentiationMonitoring Performance LOW URGENCYCustomer Personalization Alignment & Execution HIGHOPPORTUNITY SWOTPORTERS 5FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 5. KEY ISSUE/OPPORTUNITYIMPORTANCELOW HIGHBrand DifferentiationMonitoring Performance LOW URGENCYCustomer Personalization Alignment & Execution HIGHOPPORTUNITY SWOTPORTERS 5FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 6. KEY ISSUE/OPPORTUNITYIMPORTANCELOW HIGHBrand DifferentiationMonitoring Performance LOW URGENCYCustomer Personalization Alignment & Execution HIGHOPPORTUNITY SWOTPORTERS 5FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 7. SWOT STRENGTHSWEAKNESS Strong global brand Principal-Agentrecognition Pre-assignment Diversified Portfolio Multiple ERP systems Owner Appreciation Proprietary IT SystemOPPORTUNITYTHREATS Brand Consistency Intense Competition Customer Relation Exposure to cyclical downturnsManagement Rising cost of air fare Increasing WorldTravel & TourismOPPORTUNITY SWOT PORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 8. SWOT STRENGTHSWEAKNESS Strong global brand Principal-Agentrecognition Pre-assignment Diversified Portfolio Multiple ERP systems Owner Appreciation Proprietary IT SystemOPPORTUNITYTHREATS Brand Consistency Intense Competition Customer Relation Exposure to cyclical downturnsManagement Rising cost of air fare Increasing WorldTravel & TourismOPPORTUNITY SWOT PORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 9. SWOT STRENGTHSWEAKNESS Strong global brand Principal-Agentrecognition Pre-assignment Diversified Portfolio Multiple ERP systems Owner Appreciation Proprietary IT SystemOPPORTUNITYTHREATS Brand Consistency Intense Competition Customer Relation Exposure to cyclical downturnsManagement Rising cost of air fare Increasing WorldTravel & TourismOPPORTUNITY SWOT PORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 10. SWOT STRENGTHSWEAKNESS Strong global brand Principal-Agentrecognition Pre-assignment Diversified Portfolio Multiple ERP systems Owner Appreciation Proprietary IT SystemOPPORTUNITYTHREATS Brand Consistency Intense Competition Customer Relation Exposure to cyclical downturnsManagement Rising cost of air fare Increasing WorldTravel & TourismOPPORTUNITY SWOT PORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 11. THREAT OF NEW ENTRYPORTERS 5 FORCESLowCapital Intensive marketIndustry dominatedby 2 playersStrong brand presence COMPETETIVE RIVALRY WITHIN SUPPLIER POWERINDUSTRYBUYER POWERLowModerate High Large global brand High barriers to exit Access to informationCommodity based productUtilizing capacity Buyers are price sensitive Cost of switching is low Buyer power is highLow switching costs Moderate level of product diff THREAT OF SUBSTITUTION ModerateVaried optionsEasy substituteOPPORTUNITYSWOTPORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCYSUMMARYQ&A 12. THREAT OF NEW ENTRYPORTERS 5 FORCESLowCapital intensive marketIndustry dominatedby 2 playersStrong brand presence COMPETETIVE RIVALRY WITHIN SUPPLIER POWERINDUSTRYBUYER POWERLowModerate High Large global brand High barriers to exit Access to informationCommodity based productUtilizing capacity Buyers are price sensitive Cost of switching is low Buyer power is highLow switching costs Moderate level of product diff THREAT OF SUBSTITUTION ModerateVaried optionsEasy substituteOPPORTUNITYSWOTPORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCYSUMMARYQ&A 13. THREAT OF NEW ENTRYPORTERS 5 FORCESLowCapital intensive marketIndustry dominatedby 2 playersStrong brand presence COMPETETIVE RIVALRY WITHIN SUPPLIER POWERINDUSTRYBUYER POWERLowModerate High Large global brand High barriers to exit Access to informationCommodity based productUtilizing capacity Buyers are price sensitive Cost of switching is low Buyer power is highLow switching costs Moderate level of product diff THREAT OF SUBSTITUTION ModerateVaried optionsEasy substituteOPPORTUNITYSWOTPORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCYSUMMARYQ&A 14. THREAT OF NEW ENTRYPORTERS 5 FORCESLowCapital intensive marketIndustry dominatedby 2 playersStrong brand presence COMPETETIVE RIVALRY WITHIN SUPPLIER POWERINDUSTRYBUYER POWERLowModerate High Large global brand High barriers to exit Access to informationCommodity based productUtilizing capacity Buyers are price sensitive Cost of switching is low Buyer power is highLow switching costs Moderate level of product diff THREAT OF SUBSTITUTION ModerateVaried optionsEasy substituteOPPORTUNITYSWOTPORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCYSUMMARYQ&A 15. THREAT OF NEW ENTRYPORTERS 5 FORCESLowCapital intensive marketIndustry dominatedby 2 playersStrong brand presence COMPETETIVE RIVALRY WITHIN SUPPLIER POWERINDUSTRYBUYER POWERLowModerate High Large global brand High barriers to exit Access to informationCommodity based productUtilizing capacity Buyers are price sensitive Cost of switching is low Buyer power is highLow switching costs Moderate level of product diff THREAT OF SUBSTITUTION ModerateVaried optionsEasy substituteOPPORTUNITYSWOTPORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCYSUMMARYQ&A 16. DEBT-EQUITY STRUCTURE2007Hilton Corp.Avg. CostCapital Structure Debt = 6.8%Total Debt $32,67086.27% DEBT EQUITY Total Equity$5,198 13.73%14%Total Cap. $37,868100%20042005 2006 2007 86%Hilton Corp.2.21 2.113.42 6.29Marriott Int. 1.12 1.622.28 5.25 Hilton Corp. Capital Structure (as of 2007 year-end)OPPORTUNITY SWOTPORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 17. BRAND ANALYSISBrand 20012006 $3,500.00 $3,000.00 $2,500.00Annual Revenue (in Millions) $2,000.00$1,500.00Waldorf Astoria$258.56$351.12 $1,000.00$500.00$0.00 2001Conrad$5.60$342006 International Hilton Hotels$2,565.87$3,334.15Embassy Suites$1,144.36$1,581.90Doubletree$1,023.60 $1,256 Hilton Garden Inn $368.69$1,045 2001 2006 % Growth Homewood Suites $284.50$566Avg. RevPar$88.25 $113.634.3%Hampton Brand$1,787$3,208.90 Avg. REVPAR 106.23109.51 3.28%IndexRevenue Matrix Across all BrandsOPPORTUNITY SWOT PORTERS 5FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCYSUMMARYQ&A 18. CALL CENTRE PERFORMANCEYearNet Revenue/Call Hilton Corp. Call Centre Performance$110.00$100.00 2001$73.09$90.00 $80.00 $70.00 2002$77.64 $60.00 Net Revenue / Call $50.00 2003$84.39$40.002001 2002 2003 2004 2005 2006 2007 2004$85.57 Year 2005$90.30Conversion Ratio2007 2006$99.29Hilton Corp. 41.4% 2007 $102.55Hospitality Industry28.4%OPPORTUNITYSWOT PORTERS 5 FIN. ANALYSISALTERNATIVESIMPLEMENTATION CONTINGENCY SUMMARY Q&A 19. OFF THE SHELF Opt for an off the shelf ERP software like SAP or Oracle Customize it to the companys needs Cost Estimate: $125Million/5 years PROS CONS Lower maintenance costs Lose competitive advantage Outside IT support and Lose customizability consulting Timelines Cost saving on staff Training costs Reduces front deskpersonalizationOPPORTUNITY SWOT PORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 20. OFF THE SHELF Opt for an off the shelf ERP software like SAP or Oracle Customize it to the companys needs Cost Estimate: $125Million/5 years PROS CONS Lower maintenance costs Lose competitive advantage Outside it support and Lose customizability consulting Time lines Cost saving on Staff Training costs Reduces front deskpersonalizationOPPORTUNITY SWOT PORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 21. CONSOLIDATION Integrating existing System Add Customer Personalization and Feedback Component Coach Front desk Staff Monthly Performance Reports Cost Estimate: $392.5Million/5 yearsPROS CONSLower maintenance costs High front-end costCost saving on Staff Potential data lossBrand alignment Managing two systemsFront desk personalizationOPPORTUNITY SWOTPORTERS 5 FIN. ANALYSIS ALTERNATIVESIMPLEMENTATION CONTINGENCY SUMMARY Q&A 22. CONSOLIDATION Integrating existing System Add Customer Personalization and Feedback Component Coach Front desk Staff Monthly Performance Reports Cost Estimate: $392.5Million/5 yearsPROS CONSLower maintenance costs High front-end costCost saving on Staff Potential data lossBrand alignment Managing two systemsFront desk personalizationOPPORTUNITY SWOTPORTERS 5 FIN. ANALYSIS ALTERNATIVESIMPLEMENTATION CONTINGENCY SUMMARY Q&A 23. CUSTOMER RELATIONSHIP MARKETING Using the guest data to target market segments Launch a Marketing Campaign Utilize existing system Cost Estimate: $100M/5 Years PROSCONS Quick implementation No increased personalization Low cost Does not address front-desk Sustainable over long-termstaff issues Profitable to gain new Tailor marketing campaign for customers diverse client base Marketing builds loyaltyOPPORTUNITY SWOTPORTERS 5 FIN. ANALYSIS ALTERNATIVES IMPLEMENTATION CONTINGENCY SUMMARY Q&A 24. CUSTOMER RELATIONSHIP MARKETING Using the guest data to target market segments Launch