Strategic Analysis of Hilton Hotels Corporation in Australia

This report includes the strategic analysis of the business of a well-known brand in the hospitality sector, ‘Hilton Hotels Corporation'. The strategic analysis is conducted for the business of Hilton in Australia. The report covers SWOT analysis, PESTEL analysis, Competitor’s analysis, Porter’s Five Factor Analysis and recommendations for the organization to increase the business and improve the goodwill of the business.

Running head: INNOVATION ANS ENTREPRENEURSHIP
Innovation and Entrepreneurship

INNOVATION AND ENTREPRENEURSHIP 1
Table of Contents
Introduction...........................................................................................................................................2
Overview of Hilton Worldwide.............................................................................................................2
Corporate Strategy of Hilton.................................................................................................................2
Micro and Macro Analysis of Hilton Corporation.................................................................................3
SWOT Analysis.....................................................................................................................................3
PESTEL Analysis..............................................................................................................................4
Competitor’s Analysis.......................................................................................................................5
Porter’s Five Factor Analysis............................................................................................................6
Recommendations.................................................................................................................................7
Introduction of Diversified Force......................................................................................................7
Travel Packages.................................................................................................................................7
Conclusion.........................................................................................................................................7
References.............................................................................................................................................9

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Introduction
Strategic analysis is a process of analyzing the strategies of an organization on the basis of
strategic analysis tools to find the actual position of the company. It also helps the
management to find the sections which need improvement to increase the profitability of the
organization. This report includes the strategic analysis of the business of a well-known brand
in the hospitality sector, ‘Hilton Hotels Corporation'. The strategic analysis is conducted for
the business of Hilton in Australia. As Hilton is an international organization, it is working
efficiently in more than 103 countries and Australia comes on the second number after its
home country (Ahsan, et al., 2014).
The main tools of strategic analysis like SWOT analysis, PESTEL analysis, and Competitor's
analysis is being used to analyze the strengths, weaknesses, opportunities, and threats existed
in the business environment along with the effect of main factors on the profitability of the
business. Further, based on analysis, some recommendations have been provided which can
be used by the organization to increase the business and improve the goodwill of the
business. At the end of the report, a conclusion has been drawn to provide an overview of the
entire report.
Overview of Hilton Worldwide
Hilton Hotels Corporation is a conspicuous hospitality organization at international level
having more than 5000 hotels with approximately 812,000 rooms in 103 countries. The
corporation also holds and manages some franchises and some major hotel brands. It is
owned by Blackstone Group, a private equity firm. Hilton is included in top ten corporations
providing the services in the hospitality sector of the world. The major brands of Hilton are
Hilton, Conrad, Hampton Inn, Hilton Garden Inn, Hampton Inn & Suites, The Waldorf
Astoria Collection, Homewood Suites by Hilton and many more. With a large range of the
Hilton brand, Hilton offers their guest a different type of services in best quality in at most of
the places in the world (Anon., 2017).
Corporate Strategy of Hilton
At earlier stages, Hilton used to concentrate on owning and securing additional real estate.
But the management had changed the developmental strategy at later stages and now it
focuses on distributing its services with the help of franchises. This helps the organization to

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earn the revenue from providing services in the hospitality sector. Enlarging the number of
franchises also helps the corporation with a foreseeable and stable stream of income and
enables the management to deal with any type of unforeseen events or situation of the
recession in the industry.
As per the other corporate strategy of Hilton, Hilton prefers to aim business class travelers in
order to tie up with the airfares, which often results in enhancing the capability of a client to
spend on a hotel room, resorts and other facilities (Dudovskiy, 2016).
Micro and Macro Analysis of Hilton Corporation
SWOT Analysis
This tool helps in analyzing the internal strengths and weaknesses in context with the
emerging threats and opportunities in the environment of the organization.
Strengths
 Hilton Corporation has expanded its services and branches all over the country
providing high end, corporate and business class products and services to the
customers.
 The corporation also owns some firms that manufacture it fittings and also have
invested in online booking advertisements for the hotel to increase the sales of their
products.
 The employees are well educated and highly trained to treat the high profile
customers.
Weaknesses
 The charges of the products and services provided by the organization are too high to
afford middle-class professionals and businesspersons.
 The Human Resource management of the corporation is not so strong and this can be
verified from the yearly reports on employee satisfaction (Anon., 2015).
Opportunities
 Due to the popular brand image of the firm, it is easy to attract investors to provide
their services with the collaboration of Hilton.

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 The management can also make use of strategic human resource management to
utilize the talent of the employee in the organizational growth and success. It would
also help in increasing the satisfaction level of employees.
Threats
 Hilton also provides gaming and betting facilities to the customer at a very high level
which can create in cutting profits of the firm (Nair & Amresh, 2016).
PESTEL Analysis
Political Factors
Although Australia is a democratic country, the rules and regulations related to the labor laws
are highly fluctuated. Along with this, cancellation of Visa for the foreigners due to the
political reasons also affects the business of hospitality sector.
Economic Factors
Australia is considered as a developed country, which enforces the development of travel and
tourism sector. There are many big level business establishments, which provides a maximum
portion of the business to Hilton.
The economic flexibility during the elections and recession may lead to decline the
international tourism, which would directly impact the profits, revenue, and turnover of the
organization (Lehr, 2015).
Social Factors
The market of UK incorporates a large number of well-known international brands and
chains. Hilton is making its presence by cooperating with the charity organizations and
NGO's in an effective manner.
Technological Factors
The easy access to the internet has made it easy to book rooms and suites for the customers
worldwide. Hilton is also spending a huge some on making the advertisements through
electronic and social media.

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Along with this, the management is also providing all the advanced technology-based
services in the hospitality sector which helps in increasing the attractiveness of the provided
services (Bardis, 2012).
Environmental Factors
Due to the Islands, the flights generally took time to travel to most of the places in the UK,
which directly affects the volume of customers and thus the revenue of the hotel. Apart from
this, there are many natural attractions in the environment of the UK which attract a large
sum of high profile as well as business class customers every year and gives business to
Hilton (Gupta, 2013).
Legal Factors
In the UK, it is required to follow the various food and safety laws and to manage the private
recodes of the customers with full confidentiality. Hilton has a good image in this regard
(Kim & Oh, 2014).
Competitor’s Analysis
Hyatt Hotels Corporation is the main competitor of Hilton Hotel Corporation, which started
its business on September 27, 1957, by acquiring of the Hyatt House. Currently, Hyatt has
total 490 hotels all around the world. It is the formest organization in global hospitality
business with a full inheritance of making customers feel more than a hotel or a banquet
(Bradic, et al., 2013).
Corporate Strategy of Hyatt Hotels
The corporate strategy of Hyatt Hotels includes a detailed analysis of the organization's
business to explore its progress in the travel and tourism market at the international level.
This strategy helps in understanding the financial strategy and thus to work with development
prospects and brand strategy inefficient manner.
Key features
 The families of a personal name as Jack D, who initiated the business, run the Hyatt
Corporation. The concept of managing through the board of directors does not exist in
the case of Hyatt.

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 It purchases the inputs and materials from the outside vendors, which increase the
overall cost of the services. Along with this, it does not own any franchises as in the
case of Hilton, which is the main reason behind the limited area of services provided.
 It does not invest in other fields like venturing and gaming like Hilton Corporation
(Chu, 2014).
Porter’s Five Factor Analysis
Bargaining Power of the Suppliers
The bargaining power of suppliers is moderate to high in this sector of the industry. To deal
with such high bargaining power, it is required to establish an effective supply chain system
and maintaining good relations with the suppliers.
Bargaining Power of the Buyers
The bargaining power of buyers is very high due to the availability of a number of offers
from different organizations. To deal with this factor, the organization needs to develop and
provide core product and services, which cannot be copied by the competitors and can also
attract the customers.
The threat of new entrants
The threat of new entrants in low in the hospitality industry as an organization would need to
a very big amount of sum to start the business to the level at which Hilton is operating
(University, 2018).
Threat of Substitutes
The threat of substitutes is comparatively high in the tourism sector as all the organizations
are providing almost the same services at different prices. To deal with this threat, Hilton
needs to work by a being service oriented instead of profit oriented.
Competitive Rivalry
The level of rivalry is very high as the competitors are providing the same services either at
discounted rated or providing extra services such as free breakfast and lunch facilities on the
special occasions. To deal with such high rivalry, the organization needs to collaborate with
its competitors to enjoy the win-win situation (Njambi, et al., 2016).

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Recommendations
On the basis of the above analysis, the main innovative recommendations that can be
provided to increase the business and profitability of the business can be summarized as
below:
Introduction of Diversified Force
Hilton deals with the customers from different regions and countries. To provide the best
level services to them, it is required to hire the professionals from different parts of the world
to know and adopt the good qualities of different cultures. It would help the management to
deal with the customers as per their preferences and likes.
For this purpose, there should be diversified forces of employees in each department of the
hotel including dining department, food and beverage department, food and beverages
department, finance department, operations department and human resource department.
This would also help the organization to attract a large number of customers because if the
customers would find the food and living culture similar to their religions, then they would
definitely go to try them. It will also make the organization service oriented that can also be
used in dealing with the threat of substitute services and products existed in the market
(Anon., 2008).
Travel Packages
Hilton is highly involved in the hospitality services which includes providing accommodation
to the travels and businesspersons. The organization is yet not engaged in providing the
traveling and vacations services to the customers. Most of the customers prefer to go for the
deal which provides traveling, tours and accommodation packages in a single deal. If Hilton
introduces the same for the customers, then it would have a great impact on its sales in a
positive manner. For this purpose, the management has to invest in the research and
development of the overall scope of the concept. This would help the customers to get all the
services at a single point with the superior quality (Sufi, 2010).
Conclusion
On the basis of the above report, it can be concluded that Hilton is working very well as in
the Australian Business environment. It has some very strong strength like brand image and
availability of financial resources which can be used to take the opportunities emerging the
environment. Along with this, it can also be concluded that the business is facing the threat of

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substitute at a serious level, which can be solved by taking the above recommendations into
consideration. The competitor analysis also shows that Hilton is providing far better services
than the main competing firm in Australia. But in order to continue such services, the
management is required to focus on the effective management of human resource
management by enabling upward as well and downward communication processes so that
employees may feel free to coordinate with each other and thus to increase their capacity to
serve the customers in an effective manner. All the data and information written in this report
is derived from the official website of Hilton Hotel in Australia and the articles and journals
published in this regard. This report provides the understanding of the overall strategies on
the basis of analyzing strategic management tools.

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References
Ahsan, L., Qazi, B. & Syed, S., 2014. [Online]
Available at: https://mpra.ub.uni-muenchen.de/58366/1/MPRA_paper_58366.pdf
[Accessed 1 September 2018].
Anon., 2008. [Online]
Available at: file:///C:/Users/System04086/Downloads/Hilton+Hotels+Case+Study
%20(2).pdf
[Accessed 1 September 2018].
Anon., 2015. MARKETING STRATEGIES: A CASE OF HILTON HOTEL IN UK. [Online]
Available at: https://www.assignmentclub.co.uk/attachments/article/369/MARKETING
%20STRATEGIES.pdf
[Accessed 1 September 2018].
Anon., 2017. Business Analysis of Hilton. [Online]
Available at: https://revenuesandprofits.com/hilton/
[Accessed 1 September 2018].
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sequence=1
[Accessed 1 September 2018].
Bradic, M., Kosar, L. & Kalenjuk, B., 2013. Business Guests Satisfaction in the Hotel
Industry: Business Guests Satisfaction in the Hotel Industry. TURIZAM, 17(2), pp. 60-70.
Chu, Y., 2014. [Online]
Available at: https://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=4920&context=etd
[Accessed 1 September 2018].
Dudovskiy, J., 2016. [Online]
Available at: https://research-methodology.net/hilton-hotels-business-strategy-and-
competitive-advantage/
[Accessed 1 September 2018].

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Gupta, A., 2013. Environment & PEST Analysis: An Approach to External Business
Environment. International Journal of Modern Social Sciences, 2(1), pp. 34-43.
Kim, B. Y. & Oh, H., 2014. How do hotel firms obtain a competitive advantage?.
International Journal of Contemporary Hospitality Management, 61(1), pp. 65-71.
Lehr, D. D., 2015. [Online]
Available at: https://scholar.dominican.edu/cgi/viewcontent.cgi?
article=1189&context=masters-theses
[Accessed 1 September 2018].
Nair, C. & Amresh, P., 2016. Development of Strategic Plan for Hotel Industries through
Swot Analysis. SSRG International Journal of Mechanical Engineering, 3(3), pp. 6-10.
Njambi, E., Lewa, P. & Katuse, P., 2016. Relationship between Threat of Substitutes and
Competitive Advantage of Large Multinationals in Kenyan Beverage Industry. The
International Journal Of Business & Management, 4(7), pp. 412-423.
Sufi, T., 2010. HOSPITALITY INDUSTRY: AN OVERVIEW OF STRATEGY, STRUCTURE
AND GLOBALIZATION. [Online]
Available at:
https://www.researchgate.net/publication/278968574_HOSPITALITY_INDUSTRY_AN_O
VERVIEW_OF_STRATEGY_STRUCTURE_AND_GLOBALIZATION
[Accessed 1 September 2018].
University, F. F., 2018. [Online]
Available at: http://fernfortuniversity.com/term-papers/porter5/analysis/2856-hilton-
worldwide-holdings-inc-.php
[Accessed 1 September 2018].

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