Wiktoria Sobel
Unit 5: International Businesses
For this assignment I will be discussing two international businesses and analysing them in aspects of
exploring their activities, reasons for oversea trades and markets that they operate in as well as
evaluating the impact of globalisation that one of the businesses has. The reason why I chose Delta
for one of my businesses is because I think it would be interesting to explore the airline industry
from an international businesses point of view. I chose Hilton Hotels as I feel like it’s quite hard to
have an international hotel because of how much money and customers it requires.
P1- Companies working internationally
What do they do?
Delta is an international airline based in the US, they are the global airline leader in safety,
innovation, reliability and customer experience. They are the world’s most awarded airline; they
have been recognised as a fortune’s top 50 most admired company and the most admired airline for
the 8th time in 9 years. Delta has their headquarters in Atlanta, the company itself serves as many as
200 million people a year. Delta tried their best to be socially responsible, trying to make a
difference in communities where their employees live, work and fly as Delta gives 1% of the
company’s annual profits to their local communities. Another thing that Delta does is they make sure
that they have diversity, equity and inclusion as they are described as the ‘ core to Delta’s culture ‘
and they believe that their views should be reflected on their people. (Corporate Stats and Facts,
2020)
Hilton is a luxury hotel chain with lots of different brands. They offer a variety of products and
services other than the Hotels itself, the offer a range of food and drink which lives up to their luxury
hotel’s expectations. Hilton has multiple Hilton Hotel restaurants. They also provide a range of
services like gyms and spas. This is to make sure that the Hilton Hotel is meeting all of customers’
needs when the are traveling abroad. The Hilton hotel is also big on inclusivity as they comply with
the Discrimination Disability Act by having different rooms, lifts and toilets to make sure that all
kinds of customers are included. (The Hilton Hotel , 2020)
Where do they operate
Delta travels to 300 destinations in over 50 countries, they have hubs and key markets at airports in
Amsterdam, Atlanta, Boston, Detroit, London Heathrow, LA, Mexico City, NY JFK, Tokyo and so many
more.
Hilton Hotels have Hotels everywhere, North America, South America, Central America and
Caribbean, Europe, Middle East, Africa, Asia and Australia/ Pacific Islands. With Hotels in at least 10
countries in each continent and over 30 states in the U.S.
What type of business activity are they involved in? Exporting, importing, multinational
Delta is involved in the multinational business activity as Delta has offices outside of the US with one
of it’s companies being in London supplying a lot of UK citizens with jobs within the company as well
as making their flights more accessible for people All around the world. Multinational companies
also tend to inspire innovation as it allows the company to have a budget for research and
development. (DElta Airlines, INC, 2020)
Hilton Hotel is a multinational American company as Hilton Hotel works all around the world just like
Delta does creating jobs for people all around the world. The company does not have many imports
or exports as the company provides services instead of products.
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Reasons behind them going international (growth, market leadership, exploiting their brand or it
may be economics of scale
Delta is an airline meaning that they could not really operate if they were not international as
airlines take you from one country to another, that is their service. However, Delta did not really
have to expand to so many different countries or even not all states. I think that the decision to be
so universal for Delta opened a lot of new opportunities as the company grew a lot more than it
technically had to. If Delta wasn’t so global they wouldn’t be on top of the airline market like they
are now, as being accessible for an airline is a very big deal as customers won’t take your flight if the
plane doesn’t go to their desired destination or if there is too many plane changes as that tends to
be time consuming and draining for customers. Another reason why Delta would go international is
to gain more possible customers as every time Delta expands to a new country there is a possibility
of new customers who need their service.
Hilton Hotel decided to go international for similar reasons to Delta and for the reasons any business
would decide to go international. Going international helped Hilton Hotel grow as a company.
Reflecting on the graph shown next to the paragraph (Number of Hilton Worldwide Holdings Inc.
hotels from 2013 to 2019, by geographical
region, 2020) you can clearly see that in 2013 Hilton Hotel has around 4,000 hotels all
together. From 2013 to 2019 the numbers grew to 6,000 hotels, comparing this with the amount of
money the Hilton Hotels made in 2019 and 2013
is quite significant as in 2013 the business made
$2,210 million which in 220 grew to $3,575
(Hilton Reports Second Quarter Results, 2020)
which is a pretty significant increase for a
business. Having hotels in so many different
locations allows Hilton Hotel to lead the Hotel
market as people tend to be loyal to services like hotels
as a lot are already taking a risk in traveling to a
different country and might not want to take
another risk and not have the hotel they thought
they were getting which is why its good that Hilton is
always a safe bet for loyal customers.
What choice of markets do they operate in (developed economies, emerging and less developed
Looking at the locations of airports that Delta operates in which were listed above, you can tell that
most of them are developed economies and maybe a small part in emerging economies. This is
because Delta has a reputation of being quite a luxury brand as a couple years back, they went viral
for having one of the most exclusive cabins in the sky. Delta marketed this product with 5 key words:
recline, dine, power up, watch, refresh, which has pretty much anything you could possibly want
when traveling on the plane. This has helped Delta build their luxury brand however they have other
VIP features like the points cards. This means that there is no point in Delta flying to places where
people are less likely to use these luxury features as it would make the company less profit as less
people would buy even cheaper plane tickets because of the assumption that Delta is expensive.
(Luxury at a Higher Altitude, 2020)
Hilton Hotel is again a Luxury brand meaning it would too operate in developed and emerging
economies. When looking at the target market for hotels you must pay attention to the countries
tourism rates instead of their communities and locals as locals are less likely to stay in a hotel. It has
been statistically proven that less developed countries are more likely to have less tourists as the
country do not have as many funds to make the countries look nice and there’s less tourist
attractions. Less developed countries have a very specific target market of people who are most
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likely to go there to experience the countries culture, which is why even if they had the option, they
probably wouldn’t stay in a luxury hotel.
Think about a company entering the Chinese market, what impact would this have on business
operations and management practices, look at the size of the market, the cost of labour, access to
raw materials.
Delta has entered the Chinese market as they operate in 3 different airports in China, Hong Kong,
Macao and Taiwan. China is a very specific country that has quite strict and different legal and
cultural aspects. On Delta’s Delta Professional site, it states that China is leading the way in
international growth. Therefore, Delta is so committed to being the most Chinese-friendly U.S.
airline. Some of the features the have added to make it more suitable for Chinese customers is
Alipay and UnionPay through their website, WeChat functionality upgrades, Chinese meals on board,
Chinese speaking employees onboard and on ground, new loungewear on China flights and arrival
videos and airport way-finding signage in Chinese. (DELTA IN CHINA , 2020)
Hilton Hotels also aims to win Chinese customers at home and abroad, this is because ‘China
emerges as a global superpower and sees its economy continue to surge, tourism is also on the rise.
Not only does China comprise the world’s largest outbound tourist market, it is also the fourth-most-
popular tourist destination, behind France, the United States, and Spain, according to the China
Power Project at the Centre for Strategic and International Studies.’ It also shows that about 11% of
China’s GDP and estimates that by 2028 China will benefit from tourism sector more than any other
country. Therefore, it is so important For Hilton Hotel to get in that market the best and earliest as
they can. This is exactly what Hilton has done with their first property in China opened in 1988 and
now has 177 hotels in the country. One of the things that Hilton Hotel has done especially for china
is their first in-language mobile app for the Chinese market as well as other digital and mobile
innovations that improves guest experience. Hilton also helps develop hospitality with their first
Hilton School of Hospitality Management in partnership with China’s Sichuan Tourism University 14
years ago. This is because Hilton wants to provide china with trained professionals and exciting
careers across the country. (Hilton Aims to Win Chinese Customers at Home and Abroad, 2020)
P2- Types of finance and support available for international business
Explain and give examples of methods used to finance international trade (prepayment by the
importer, letters of credit, export credits and bank loans and give examples.)
The most expensive expense for Delta is the actual manufacture cost of their aircrafts. The models
that Delta uses are Boeing 717, the Boeing 757, and Boeing767 as well as Delta being one of the two
airlines using Boeing 767-400ER worldwide. An average Boeing model costs from $58.5-69.5 million
per aircraft. Delta uses manufacturer support and bank loans/ finance leases to pay for their
aircrafts so they can afford the most aircrafts that they can buy. When it comes to Delta’s ground
facilities they are mostly leased, this includes things like land and buildings that the business
occupies in one of Delta’s documents it is stated that ‘ We lease ticket counters, gate areas,
operating facilities and other terminal space’ This relates to landing fees as under their agreements it
states that their fees are based on the number of landings and weight of the aircraft. Delta also pays
their shares using their $5 billion share repurchase program which was announced in May 2017.
Delta has also reported $1375000 in trade debtors for its second quarter of 2020 this is because of
the coronavirus airline debt that Delta is currently in. The debt is now over $9 billion destroying
Deltas credit score long term, this is why now Delta pays a lot of their suppliers with trade creditors
as if not they would simply not have enough money to pay off everything in time. (2020) (source of
finance trade creditors, 2020) Delta is also one of the few companies that shares profits with their
employees, each employee receives an equal to 14% of their annual pay last year Delta has spent
over $1.3 billion on this profit-sharing scheme
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