Situation Analysis

Hilton Hotels

Situation Analysis

In the industry of hotels, Hilton is synonymous with quality. Hilton is already one of the industry leaders in the hotel industry. However, how does an established quality hotel chain break into other existing crowded markets where competition is already fierce? Due to the low level of product differentiation and the high number of product alternatives in the casino gaming industry, head to head marketing is one of the only ways to increase market share. In order for Hilton to successfully penetrate the established casino gaming industry, a successful strategy of product differentiation, presenting it in the proper place, with the appropriate promotional effort, all with a price that consumers will pay. This analysis will evaluate other successful hotel/gaming combinations as well as evaluate instances of this phenomena occurring in other industries.

The Hilton Hotels Corporation has been an industry leader that specializes in owning and managing hotel and casino type operations. Hilton Hotels Corporation also sells furnishings, equipments and supplies to hotels, motels and inns, as well as operates a computerized reservation system that serves others within the hotel industry.

In the 1990's, in an effort to boost sales and become a more aggressive operation, Hilton decided to shift its business focus toward the already crowed casino gaming industry. The corporation decided to invest heavily into several gaming casinos in several states and countries. A number of these gaming operations became successful, while others did not meet expectations. Hilton encountered problems that are common to the gaming industry: high costs to enter established markets, low product differentiation with multiple alternatives, and difficulties finding the right mix of entailment and gaming activities ("Casino Capitalism", 1998). Hilton faces many challenges in the gaming market. There are some strategies that Hilton can execute to increase its chances of success.

Product wise, Hilton Hotels Corporation desired to venture into concept of packaging gaming with theme entertainment to create a total recreational destination resort. The success of this service is finding the balance between gaming and entertainment for multiple market demographics that would be attractive and affordable to customers of low, middle and high economic levels. Success also depends on producing a product that is different than the ones presented by other organizations. One way to package the gaming product that will encourage new market share is to offer frequent gaming incentives in the form of free rooms and meals (Pomerantz, 2003). This method has long been used on high profile gamers but can also be effective at a lower level with ordinary customers as well.