Business Strategy for Hilton Hotels: Internal and External Analysis, Competitive Environment Analysis, and Strategic Options

This report provides an in-depth analysis of Hilton Hotels' internal and external environment, including a PESTLE and SWOT analysis, competitive environment analysis using Porter’s Five Forces model, identification and justification of the organization’s existing and/or potential competitive advantage, and valid strategies and tactical objectives to achieve overall strategic objectives. It also critically evaluates and justifies strategic options for the organization.

Unit 32 – Business Strategy

Table of Content
Introduction p
Part A: An internal and external analysis that provides a platform
for strategic decision making: p-p
1. PESTLE and SWOT of the organisation and an evaluation of the
organisation’s resources and capabilities p
2. Competitive environment analysis using Porter’s Five Forces model
p
3. Identification and justification of the organisation’s existing and/or potential
competitive advantage p
4. Valid strategies and tactical objectives to achieve overall strategic objectives
p
Part B: On the basis of this analysis critically evaluate and justify
strategic options for the organisation: p-p
1. Critical evaluation of the different types of strategic directions available to
the organisation p
2. Justification and recommendation of the most appropriate growth platform/s
and strategies p
3. Evaluate ways and means by which the chosen strategy/ies can be
monitored in order to ensure success p
5.0 Conclusions p
References p

Introduction
Hilton hotels is a very big brand name all across the world. In the hospitality industry it has been
working for a long time now and has gained a lot of experience as well as goodwill too
(Loughnan., 2020). This report in particular gives a description regarding the external factors that
impact the working of the overall organization as well as the internal factors too. First, the
PESTEL analysis is discussed and then the SWOT analysis is discussed in the report in particular.
Next, the report describes the resources as well as the capabilities of the organization that is
selected for the research in particular. Next, the report also analyses the competitive environment
of the company in particular through using the porter's five forces model and supports critical
evaluation of existing and the potential competitive advantage that the company has in particular.
Further, the tactical objectives and the strategies that are valid for the purpose of achievement of
the strategic objectives of the organization in particular are also discussed below. Lastly, the
different types of the strategies and then the most suitable and appropriate growth strategies and
platforms are also recommended in the discussion. And lastly, the ways of monitoring these
strategies are given.
Part A: An internal and external analysis that provides a platform
for strategic decision making:
1. PESTLE and SWOT of the organisation and an evaluation of the
organisation’s resources and capabilities
Determination of environment under which business functions is foremost or first step that a
organization must take. The SWOT as well as PESTLE analysis gives the correct knowledge of the
macro environment by undertaking as well as studying all factors that generally affect the smooth
going of company. The following analysis is done on the Hotel Hilton:
SWOT analysis
This is an tool that is mainly used by every business to guess the external environment, it
generally consists of strengths, weakness, opportunities and threats (Teoli, 2019). This tool helps a
business to know their strength and weaknesses to hold as well as to eliminate them and even helps
firm to determine right opportunities and threats that are normally available in external environment
for grab the chances and also take precautionary measures.
Strengths of the business:
 The brand comprises 14 other businesses under itself consider the most famous organizations
such as Embassy Suites, Waldorf Astoria, Conrad and Hilton resorts and hotels etc. The
brand serves in above 100 countries and has served over 140 million guests.
 The business has good employees' retention, so it gives positive impact on the company
performance as well as have good reputation in market place.

 Hilton offers one of the best service to its customers, by offering a luxurious comfort, quality
products and by offering good discounted prices, late checkouts, free access of internet and
many other things which are generally appreciated by customers over the world.
 The Hilton has technical innovation to enhance the customer experience as well as constant
upgrade of business processes.
Weaknesses-
 Limited market share with good brand image. And there operations are generally affected
globally due to various government policies as well as parameters.
 Dependence on the home market of US is the one major weakness of Hilton as 80% of revenue
generation is done from the US market and only 6% of the revenue is generated from Asia
Pacific market.
 The Hilton has high amount of debts that is recorded in the year 2015. It had a debt of around 5
billion, including non-recourse debt of USD726 million.
Opportunities-
 The brand has a scope of further expansion in global market. through focusing more on their
R&D Hilton can enhance its services and operates on a much bigger level in the future.
 High potential in the markets.
 Digitalization as well as better use of the technology.
 Hilton can also introduce its services in the mid-level market and by forming strategic
alliances and changing its approach. And the business can also innovate in the customer
services.
Threats
 As the business operates internationally there is always threat of the political instability as well
as terrorism that can also affect the functioning of the organization.
 Competition on the price point.
 There are various threats that are also observed in Hotel chain such as ethics related issues
which are arising as well as complaints by customers in review, feedback column which also
increasing. So this can affect growth or success of the hotel in the future (Puyt, De Graaf, and
Wilderom 2020).
PESTLE analysis
PESTLE is an strategic tool that generally stands for the political, economic, social,
technological and legal factors. With the help of PESTLE analysis a business can analyse all external

factors that are generally present in their business operating country and can affect the working of the
business. The following is brief of Hilton PESTEL analysis for UK market in particular:
Political factors-
This factor is generally connected with the politics of a particular country. For the growth or success
of business political stability becomes a important factor as it generally helps in smooth functioning.
The Hilton operates on a large scale, as it is exposed to this very risk. In the recent years the visitors
to United Kingdom had reduced because it has left the European Union and this a result the profits or
revenue of the Hilton hotel has also declined. So the political factors have significant impact on the
organization (Madsen, and Grønseth, 2022).
Economic factors-
This factor is related with economic condition of country. The economic factor is very important for
the hotel industry as it is not under the control of the industry but can directly impact the operations
of the hotel. Hilton by proving a luxurious experience, should generally focus on the country areas
where the income of the people is stable.
Social factors-
Social factors belong of all things like latest trends, lifestyles, cultures, fashions and many more. On
being a well recognized brand around the globe the revenue of the business can be affected by
different factors like the consumer demographics, growth rate, gender ratio, cultures etc. Hilton by
content luxurious services is targeting such high class customers.
Technological factors-
These factors are involved with all technologies that are generally evolving day to day and making
the lives easier. Hilton is engaged in providing luxurious experience so, it should focus on updating
its technologies.
Legal factors-
Legal factors are also connected with the laws as well as rules of a country in which the organization
operates. Hilton should also consider the factor and the laws that are made by the government related
to the safety issues due to Covid-19 in different country.
Environmental factors-
These are connected with the environmental activity that are followed by many people and undertaken by
many firms. Hilton is also involved itself in different activities that generally protect environment. Here,
the climate change is threat for the Hilton hotels.
2.Competitive environment analysis using Porter’s Five Forces model
PORTER FIVE FORCES

This framework is generally used by many businesses when there is a need of complete analysis of
the macro environment to find out competition in the market (Hole, Snehal, and Bhaskar, 2019). Here
is the Porter Five Forces used on the Hilton, so these forces are:
Threats of new entrants-
Hilton is a wide-ranging hotel brand that is operates globally. For any new entry, it is generally
impossible to compete with Hilton hotels and resorts. Thus, there is no such threat to the brand.
Rivalry amongst existing firms-
The hotel offers premium services to their customers so the competition of the organization is with
the similar business only, like Marriott, Hyatt Regency, Radisson Blue, Westin, and other premium
brands of chain (Carraher, 2018). But these premium segments Hilton enjoys the highest profits.
Threat of substitute-
There is no significant threat to Hilton hotels as, when individual choose a substitute, they often end
up choosing relatives or friends homes. Slight threat that exists is between the similar premium hotels
as Hilton of United Kingdom.
Bargaining power of buyers-
The Hilton is provide services to the premium customer so there is less power in hands of the
customers for the bargaining. So the high class people frequently tend to apply the coupons that are
particularly made available to customers by the organization only, but there is no bargaining other
than that (Bruijl, and Gerard, 2018).
Bargaining power of suppliers-
The power of suppliers is generally low as the Hilton purchases from 4000 suppliers or even more, thus
they automatically lack the uniqueness therefore the bargaining power is less.
3. Identification and justification of the organisation’s existing and/or potential
competitive advantage
The competitive advantages of the hotel is they offer quality or premium services to their customers.
Even the customers are also satisfied with the services of the hotel. The another competitive
advantage of the hotel is they have coved global market as well which generally cove the hole
market. The hotel is also innovate their customer services as well. The best use of the technology and
digitalization is also given competitive advantages to the hotel. The hotel also make strategies to
make cove more customers, so they also focus on marketing through the social media platform. These
social media platform are Facebook, Instagram, LinkedIn, websites etc. so by theses they cover or
even attract more customers. The hotel is well-established so it generally attracts more customers.

The another competitive advantage is the cost strategy of the business. It generally helps to determine
aspects which normally helps to attain advantages over its competitors in term of cost. The another
competitive advantage of the Hilton hotel is they are well updated their technology time to time. Even
they also follow all the rules and regulation of the different countries where their business is operated.
The Hilton has good brand recognition so that why they have positive impact on their customers.
Even the customers are satisfied with the hotel services so inspire their friends and family members to
visit the hotel. It creates brand awareness particularly. They also cover international market that is
they open hotel in many countries. They also offer many discounts as well as offer to their customers
so it generally attracts the customers more.
4. Valid strategies and tactical objectives to achieve overall strategic objectives
The valid strategies or the tactical objectives are basically set for the major purpose of the achievement of
the overall organizational objectives of the company in particular (Górska-Warsewicz. and Kulykovets.,
2020). This is totally dependent on the strategic goal or the objective of the organization or the company
in particular. The main or key strategy of Hilton hotels in particular is travelling with purpose in
particular. This specifically aims at sustainable travelling in particular which is the major requirement of
the environment as well as the market in the world in particular. The major aim of the company is to
redefine as well as advance the sustainable travel and tourism on a global level in particular. Through this
particular strategy the company aims at reducing its environmental impact till the year 2030 in particular.
One of the major tactics or strategy in particular that is used by the Hilton hotels in particular is
enhancing the customer demand through encouragement of loyalty. Loyalty and trust is one of the main
aspects that is required by the customers of the market in current times. This is because there are a lot of
fraudulent activities and crimes happening related to financial aspects in the hospitality industry in
particular too. Hence, the company is ensuring and sustaining the levels of loyalty and trust in between
the company and its customers through which the goodwill is also enhanced and the traffic is also driven
towards the company in particular.
The key reasons for Hilton hotel's progress in particular which is the major strategic objective of
the company is the ongoing commitment for the recruitment of the talent that is aligned with the
company's values in particular. The company follows the concept or the approach that states that through
efficient hiring process in the short term, the company is able to be successful and also develop more in
the long term in particular. Also, as the company is wanting to move towards the sustainable growth and
double its impact on the society by the year 2030 in a positive way, the company requires efficient as well

as proficient employees or staff that can help or support the company in doing as per the plan in
particular.
Part B: On the basis of this analysis critically evaluate and justify
strategic options for the organisation:
1. Critical evaluation of the different types of strategic directions available to
the organisation
Each and every business in particular desires or wants their organization or company to be stable in
particular in the market that is highly competitive and is also consistently changing. Similarly, the Hilton
hotels also desires to have a tag on them of the ruler of the industry they are working in which is the
hospitality industry in particular, which is a process that is very challenging and also the company can
consider strategies that are introduced by Porter which can also be referred to as the Porter's generic
strategies in particular. These are as follows:
The cost leadership strategy
The cost leadership strategy is considered to be a very common type of, a strategy in particular
that specifically allows or supports a particular organization or company for the purpose of giving neck to
neck competition to the competitor companies present in the market. And not only that this strategy often
helps or supports the company in grasping the title of the industry ruler in particular (Islami, Mustafa and
Topuzovska Latkovikj, 2020). Which is obviously considered to, impact the goodwill and the market
recognition of the company positively for sure. For Hilton hotels in particular the company can precisely
consider the cost leadership strategy to gain competitive advantage in the market and also become highly
competitive in particular. Also, for the purpose of gaining the cost leadership in particular the company
has to reduce the cost of the products as well as the services. This might impact the brand image of the
company however.
The differentiation strategy
This strategy is also one commonly used strategic direction within the market in particular (Omsa,
Abdullah and Jamali, 2017). This strategy basically allows the firm to differentiate the products or the
services of the company from that of its rivals present in the market in particular. This is done through
implementation and sustainability of the process of innovation within the company. There is a
requirement of major levels of modifications within the products and the services. Hilton in particular is
able to consider such a strategy for capturing the market, but this is highly risky too.
The focus strategy
The focus strategy in particular refers to a strategy in which the organization focuses on a specific
or a niche market within which the target audience are required to be segmented, this strategy is limited

and might also affect the sales of the organization (Braun. Latham. and Cannatelli., 2019). But still
continuous growth is present. This focuses on both cost leadership and differentiation only the market
becomes niche.
2. Justification and recommendation of the most appropriate growth platform/s
and strategies
Business are abided by the ultimate motive of growth and recognition. Every business that runs in a
market has some or the other plan for attaining the maximum growth that is possible. Some business
plan on introducing new revenue generation source in the business while some plan to expand the
current business by adopting various different strategies that can provide business with huge profits
and spread as good awareness of the business’s brand (Cooley and Prescott, 2021). Here Hilton is a
great brand and has a huge customer base because of its beautiful offerings, but to expand more and
enhance its reach, the business should definitely consider using Ans-off matrix as that will provide
the business with a great knowledge of where the business can expand its market, what kind of new
offering the business can put forward, what is the base that the hotel brand should target and a lot of
other things.
Ans off matrix is a growth strategy that is used by the businesses all around the word to identify right
opportunities for increasing the revenue of the business (Dawes, 2018). The opportunities can be in
form of any strategy for example, developing a new product or entering a new market for better
results and outcomes. Here are the 4 following strategies that are used under ans-off matrix.
Market penetration:
This very strategy of the matrix is the most widely used strategy as it involves no risk and
mostly results in better outcomes for the businesses. This strategy is concerned with increasing the
number of sales in the current market in which the business operates. Typically, it is the boosting of
the present sales in the present market (Cleberg, 2019). It does not involve any new development of
product or it does not involve any expansion of market. Hilton should definitely consider this strategy
as this can provide better results to the hotel without any further investment. The hotel can simply
introduce new offers and discounts to attract more and more customers.
Market development:
Market development is engaged with developing a whole new market for a business. This
strategy is concerned with the businesses entering new markets in order to boost the number of sales
and expand more and more business awareness. This kind of strategies are highly used by the big
international businesses. Here Hilton is also already engaged with market development strategy and
so has a great brand image also in the market. For this kind of strategy, the businesses should already

hold a good image in the eyes of customers in order to get successful and avoid any risks and losses
in the future.
.
Product development:
This strategy is associated with bringing a new product to the market. In this strategy a
business gets to test a new product in the current market. Product development strategy does not
ensure any guaranteed success as the new product can turn out to be successful or can also turn out to
be a failure in the market (Cooper, 2019). It completely depends on whether the new product is able
to survive or not in the market. Here Hilton already has a good customer base and a good image in the
eyes of the customers, while introducing a new product can bring threat to the company and harm the
reputation of hotel’s brand.
Diversification:
Diversification strategy is termed as the most dangerous strategy as it is engaged with
introducing a new product of a business into a new market. Both the product and the market are new
in this strategy which brings along a huge risk of failure. To adopt this strategy a business should first
collect all the essential information related to the customer’s taste of the following market. Hilton has
a great image so the hotel chain can definitely consider this very option, as it will only enhance the
revenue of the company and will lead the hotel chain to a bright future ahead.
3. Evaluate ways and means by which the chosen strategy/ies can be
monitored in order to ensure success
Monitoring the performance of a business is an important step as its shows the actual progress of the
company and the strategies that are used to serve a particular purpose. It is way to check that the
strategies that are made for the purpose are actually serving the purpose in an organization or not
(Agarwal, 2020). Here, Hilton has also used many strategies for the growth concern and to evaluate
the progress and monitor the strategies, Balance scorecard model will be used.
Balance scorecard:
4. Financial performance: The financial performance of the business clearly shows that the
strategies made for the business growth is resulting in progress or not. Hilton can also balance
it strategies accordingly, either by reviewing its financial performance or by analysing the need
of the firm.

5. Stakeholder performance: It is the process that is linked with the financial projection. This is
common kind of component in the balance scorecard, which focuses on reviewing the
performance of the stakeholders and craft the following strategies accordingly.
6. Efficiency: Companies need to evaluate the efficiency of the strategies that they applied in the
internal environment and then bring on the changes accordingly, they should look on the
internal environment and observe improvements while judging and reviewing their strategies.
7. Organizational capacity: This refers to going through the company' capacity and acting
accordingly but also, capacity of a company is irrelevant at the time of strategic planning.

5.0 Conclusions
From the above report it has been concluded that business strategies play a very important role in
the entire life cycle of every business. Making right strategies for the businesses is an important
responsibility of a business in order to be successful in the market. Here, Hilton is a great hotel
chain which serves a huge customer base and a huge share of market. The report comprises a
detailed SWOT an PESTLE of Hilton in order to determine the both the external and the internal
environment of the business, analysis of competitive environment by Porter Five forces model,
identification of competitive advantage and tactical goals and valid strategies for achieving overall
objectives. Lastly, the report also showcases strategic directions for Hilton, ans-off matrix and
ways to monitor these strategies.

References
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