Hospitality Business Strategy

This report discusses the business strategy of Hilton company with the impacts on macro analysis on company with frameworks such as swot and pestle analysis as well as internal environments and its organization capabilities.

HOSPITALITY BUSINESS
STRATEGY

Table of Contents
PART A...........................................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Analysis of macro environments and its business strategies.......................................................3
Merit criterion: ............................................................................................................................6
Analysis the internal environments and its capabilities at Hilton: ..............................................7
Merit criterion:.............................................................................................................................7
Porter five forces analysis............................................................................................................8
Merit criterion:.............................................................................................................................8
PART B............................................................................................................................................9
Strategic direction available to Hilton Hotels..............................................................................9
Justification and recommendation of appropriate growth platform...........................................11
Application of range of theories, concepts and models for interpreting and devising strategic
planning......................................................................................................................................12
Production of strategic management plan..................................................................................13
Critical interpretation of information and data application of environmental and competitive
analysis.......................................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

PART A
INTRODUCTION
Hospitality business strategy is referred as the effective strategic management in the hospitality
industry. It helps manager o make decision and use resources to achieve the business objective is
known as the business strategy. It also secures the competitive position of company in the
marketplace. The chosen hotel is Hilton hotels and resort at United Kingdom. It is the American
multinational hospitality industry and it is the largest hotel brand on world. This report will
discuss the business strategy of Hilton company with the impacts on macro analysis on company
with frameworks such as swot and pestle analysis as well as internal environments and its
organization capabilities. This report will also elaborate the porter five forces of hospitality
sector and also apply the models and theories to analysis the strategic direction of company.
MAIN BODY
Analysis of macro environments and its business strategies
There are many factors that affects the operational activities of the hospitality industry.
The macro environment factors consist the external factors that doesn't control but is certainty
affected company. There are various macro environments factors such as political, technological,
economic, social, demographic, environmental and legal factors that factors either negatively and
positively affect the company.
PESTEL ANALYSIS
Pestle analysis is the framework which is imperative for Hilton company. It helps in
improve business continuously and its market dynamics.
Political factors  Political stability of company is most
important for business and political
situation of business in which business
is operated.
 These factors influence the tourist,
visitors and business travellers to visit
country because if visitor is reduced
than the revenues of hotel will also
reduce.

 Lock down also affected the hotel
industry but sometimes it also helps in
increase their revenues.
 Trade war between countries also affect
the business profitability and its
operations.
Economic factors  Economic factors affect business in
direct and indirect ways. This is not
control by business but its affects the
business revenues because it incudes
the growth rate, interest rate, GDP and
inflation rate of country.
 Pandemic affects the operations of
company because people are left with
low income and not able to spend on
leisure activities such as hotel so, it is
not good for hotel because Hilton hotel
is luxurious hotel and it should target
the people who have disposable
income.
Social factors  Business also effect various social
factors such as population growth rate,
gender ratio, consumer demographic,
culture, etc.
 if people income will increase then
they will spend also because they able
to send on leisure activities and its good
for hotel industry.
 Covid also affects business because
people stay at their home due to the fear

of interaction so business doesn't
control the social factors.
Technological factor  Hotel upgrade its technology and its
helps in improve hotel facilities and
value proposition which offer to
customers as well as helps in enhance
the customer experience (Mekhruza,
2022).
 Social media technology also helps
business in developments because
customer book hotels easily at any
time.
Legal factor  Law and regulation also affect the
business operation in hotel industry.
 Customer laws, employees laws and
other laws followed by hotel which
regulate by governments. Example
Covid regulation made by governments
to maintain social distance and safety in
hotel rooms (Linxi, 2021). It includes
in cost of operations and its directly
affects the business profitability.
Environmental factors  Climate change is threat for hotel
company so hotel need to maintain laws
and standards relate to environment.
 Maintain environmental factors within
organization helps in improve business
goodwill and its beneficial for long
term.

SWOT analysis:
SWOT analysis of Hilton resort is analysed by its strength, weakness, opportunities and
threats. There are two types of factors such as internal factors and external factors. The internal
factors are strength and weakness. The external factors are threats and opportunities.
Strength:
 Hilton company has high brand
recognition.
 It has 540 hotels on 78 countries.
 It maintains good reputation and
goodwill in marketplace.
 Company have various technical
innovation to improve business process
and customer experience.
Weakness:
 Hilton's resort have limited market
share.
 Business operations are also affected by
the global parameters and governments
policies.
 It's also effected the customers
perceptions and their perspectives.
Opportunities:
 Hilton is innovative in customer
services.
 Company can use better technology and
digitalization.
 Large potential in emerging market.
Threats:
 company competition on price points.
 Political and economical instability.
 Ethical issues in Hilton hotel (Yap,
Saha and Alsowaidi, 2022).
 Loss of key personnel and key talent.
Merit criterion:
Hilton company operating is business in united kingdom. Company have competitive
environments. With the analysis of PESTLE and SWOT business has been analysed. legal,
social, political and environmental factors of business, all helps company by various external
opportunities and strength at the same time. Hilton company offer various facilities to customer
and helps in attract more customer and company also have good profit margin in due to leisure
hotel. With the implementation of good strategies within the organization company have
competitive advantages and also generate the revenues of business and their country.

Analysis the internal environments and its capabilities at Hilton:
McKinsey 7's model is helps in analysis the internal environment of organization. It consists the
various internal elements such as systems, style, shared, staff, skills, structure in order to
determine the business effectiveness of business and achieve the goals of business organization.
That all elements are divided into hard's and soft's.
Hard elements
 strategy: Hilton resort strategies are classified as service differentiation. The major
difference of company is its competition with communication technologies and high
quality services into various aspects of Hilton. The main strategy of company is stay with
customer perceptions and also focus on business achievements and its recognition.
 Structure: the organizational structure of Hilton company is hierarchical due to the
larger business size. Hilton organizational can also be divisional into timeshare,
ownership and management (Xia, 2018).
 Systems: Hilton company have wide range of systems such as employees recruitments,
quality control systems, performance evaluation employees, etc.
soft elements
 Shared values: Hilton encourages the culture which celebrate the diversity and ensure
that organizational culture must diverse as well as ensure that task and roles must be high
with core values.
 Styles: participative leadership style have Hilton companies for effectively achieve
business goals and vision of business. Company also have cooperative and supportive
organizational culture.
 Staff: Hilton company have large number of employees as well as have human resources
departments which helps in retain employees within the organization and also fulfil the
skill's gap of employees.
 Skills: Hilton company focus on improve the skill ad capabilities of employees with
training and developments programs as well as provide growth and developments
opportunities for employees. It also helps in meet competitive advantages of hotel.

Merit criterion:
It is the best framework to achieve the which used the business organization systems to
find out business internal powers. This all elements are most important for business to identify
effectiveness of business. Hilton company system is very effective and its working style are also
flexible. company strategy are working effectively and share valued also carried to the other
parties with systems. Company gain competitive advantages and create non substitutable
competency for Hilton. Staff and team member's of company also the important part of business
success for Hilton as well as skills is sufficient to achieve business goals.
Porter five forces analysis
Porter five forces helps to determine the industry attractiveness and also helps in
understand the competitive position in market. This also helps in make strategic decision that can
improve performance of Hilton company and long term survival.
Threats of new entrants: Hilton will face low new threats is existing regulatory framework
challenges too new firms to enter in market. For entry in hotel industry company require more
capital and resources investments so, there is low risk of threats of new entrants.
Threats of substitutes: the substitutes can make the competitive challenges for Hilton company.
Cheap substitutes products and service can also avail from another industry. Switch cost are also
low. In terms of quality and performance threats of substitutes are low for Hilton (Anastasiu,
Gavriş and Maier, 2020).
Competitive rivalry: rivalry among existing firms also low for Hilton because there are limited
number of payers in market, industry growing at faster rate,consumer switching cost is high and
exit barriers are low.
Bargaining power of suppliers: it is high for Hilton because it helps in increase the competition
in industry and also reduce the growth and profit for business. There are also low suppliers
power can make business more attractive because of growth potential and profitability.
Bargaining power of buyers: bargaining power of buyer indicate the business high quality
products at low cost with customer services as well as make industry more competitive. It helps
in increase the growth opportunities and profitability.

Merit criterion:
There are various strategies which helps in improve the competitive edge of business and
market position on outcomes with leverage new technologies and also invest in deeper customer
relationship (Indrarathne, Ranadewa and Shanika, 2020). Business can create strong culture to
attract the best talent and retain talented employees within the organization with training ad
developments and promotional strategies. Product differentiations and cots leadership strategies
also helps in improve the business effectiveness and also gain the competitive edge of business
in the competitive marketplace with better outcomes.
PART B
Strategic direction available to Hilton Hotels
Bowman’s strategic clock is going to be the theory that will be used as a strategic tool for
providing options for positioning within a market based around price and perceiving value.
Source: Bowman’s Strategic Clock – How to position your product?, 2021
Low Price and Low Value Added:
At this position the firm keeps the price relatively low in order to meet the requirement of
the competitive method used by the company. The price of the services is going to be low and
the customers will also be perceiving low value due to the inferior quality of services. These

prices are developed for attracting the customers to motivate them for increasing the volume of
sales.
Low Price:
The strategy often is able to produce large quantities of products which in the contrast of
the previous strategy is going to help the company and its services (Echchakoui, 2018). The sales
of these products at the low price is going to help with the margin on the individual services. Due
to the high output the business would be generating high profits.
Hybrid:
It is the highly effective strategy which the company can clearly articulate through the
addition of value and offering the products at the consistent quality on regular basis. This is the
strategy that is the combination of aspects of low price and product differentiation. This model
would be attracting the customers by offering services at lower prices with differentiation which
the competitors don’t offer.
Differentiation:
At this strategy the goal would be to provide customers with maximum level of services.
Hence, the company would develop some unique form of value through its services. This would
increase the value proposition (Kasamani, Omido and Chepkulei, 2021). The product quality and
brand play is going to be crucial role in this strategy. Result of this customers will pay more for
these products.
Focused Differentiation:
The focus differentiation is to target the position of the services at the utmost price level
in which the buyers would pay for the high perceived value. These services are high priced and
their target customers are going to be pay 10 to 2 times of their economy competitors. The profit
margin of the company would be high.
Risky High Margins:
According to the suggests given there is going to be high risk in positioning strategy.
According to which the argument this to be sooner or later is doomed to fail is valid. Consumer
continuing to purchase at such high prices would exploit the market supply disequilibrium.
Hence, the customer will look for better quality services in similar price range or similar services
at lower cost.
Monopoly Pricing:

On this strategy the company is going to be in less at position during their concern about
the perceived customers value or pricing (Kim, 2020). The consumer is going to rely on the
company for their products and what it offers. It would make the customers have two choices of
either buying the products or not.
Loss of Market Share:
The loss of market share strategy involves products with low perceived value with
disproportional high pricing. It is also essential for setting the standard or middle-range price for
a services or product with low perceived value is implausible to win over many customers. It
also involves taking of an inferior product and pricing it to match the value proposition.
Justification and recommendation of appropriate growth platform
For the measurement of success, the growth is going to require some measurement that is
needed for the development of Hiltons business. There are different ways to measure the growth
of the business in terms of employees, customers base and international pressure.
Ansoff’s Growth Matrix is a tool of strategic planning which would help the business develop
and decide upon strategies for their growth. It has been designed for effectively providing four
different strategic options.
Source : Understanding the Risks of Different Strategic Options, 2022
Market Penetration:
It is the action of promoting existing services in the existing markets. The hotel industry
utilizes the market penetration in ways for development of strategy of having an aggressive

market that would be facilitating across suitable market channels (Gurcaylilar-Yenidogan and
Aksoy, 2018). It helps the market attract customers through offering suitable discounts during
certain times of the year. Hilton hotel can also pursue their regular customers and offer them
specialized discounts to motivate them to use their services.
Market Development:
At this the existing services are launched in new markets. For the hotels the prime
method of market development is going to help open new branches at new locations. It can be in
a same city or country or can also be in a new nation. Hilton can use this option due to being
famous in the world for its services.
Product Development:
In this the company promotes its new services that is going to be the key factor for its
growth. These new services offered can help the guests stay and can enhance the value offered to
them. It is also marketed for the generation of awareness in the target population (Khajezadeh
and et.al., 2019).
Diversification:
According to the diversification a great extent of the cooking of their food is important
for the laundry and having cleaners and other services. This is said to have further diversification
in vertically planting and growing of different crops and animals for the purpose.
It can be recommended to Hilton hotels according to this discussion of Growth matrix is
that hotel would benefit from market development as it has the brand name that would work in
the different markets.
Application of range of theories, concepts and models for interpreting and devising strategic
planning
Vertical integration strategy
The value creation chain is commonly represented as a vertical series of stages in which
it creates and deliver value to the customers. This vertical integration means that the firm is able
to assume control over more stages in the value chain. For this organization the services value
chain is going to include the development of services process, logistics and delivering of services
(Ahmed and Ahmed, 2018). Hilton is going to integrate the because the London Heathrow
controls the Hilton business within the airport such that this can increase the company’s power in
the marketplace.

Horizontal integration strategy:
This is the strategy in which the organization is able to undergo horizontal integration for
increasing the size, diversity, products or services offerings or the reduction of competition. In
this kind of integration, the business collaborates with an organization of same calibre for being
able to gain success in the market.
Production of strategic management plan
Mission:
Serving people and our team members with extended passion for hospitality beyond of
the walls of the hotel every day.
Vision:
To be able to fill the world with best delivering of hospitality experiences through
exceptional management related to hotel, guests and time.
Goals:
 Increasing the hotel’s average occupancy level by two percent in comparison to that of
the previous year.
 To increase the volume of repeat guest business by 10%.
 Reduction of Check-in and Check-out times by two minutes.
 Achieving increase in returns in comparison to the market by 20%.
Critical interpretation of information and data application of environmental and competitive
analysis
The strategic direction of Hilton is going to be towards focusing on the quality of customer
value proposition for being able to generate the success. Being able to generate the success the
competitive analysis though the market development (Wu, Zhang and Luo, 2020). The growth of
this organization will be the development of operational practices which is going to be effective
for the management of the operations. Hence, it was considered that the application of theories
and concepts is going to help the business generate the success that is important in the hospitality
industry. Being able to focus on the practices regarding the ways in which the business can
achieve growth.

CONCLUSION
From the above project it can be concluded that Hilton with the help of proper strategic
planning can be successful in overcoming competition. Analysation of the impact and influence
of the macro environment is done through Pestle and Swot analysis. In this project a critical
analysation of the hospitality macro environment is considered for the determination of
information regarding strategic management decisions. The internal environment of this
organization has been elaborated with Mckinsey’s 7 Framework. In this project application of
Porter’s Five force model is evaluated for the competitive forces of the market. In this project a
strategic management plan is going to be devised. In this project the different strategic directions
have been show through Bowman’s strategic clock. This project recommends the appropriate
growth platform for this organization through Ansoff’s market growth matrix has been used.
Different range of theories such as horizontal and vertical integration approach has been used for
this project.

REFERENCES
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Mekhruza, V., and et.al., 2022. PERFORMANCE OF HILTON: HOW HILTON TACKLES
THE EPIDEMIC COVID-19 DISEASE. Thematics Journal of Business
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Online
Understanding the Risks of Different Strategic Options, 2022 [Online]. Available through: <
https://www.mindtools.com/pages/article/newTMC_90.htm>
Bowman’s Strategic Clock – How to position your product?, 2021 [Online]. Available through: <
https://thinkinsights.net/strategy/bowmans-strategic-clock/>

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