Hospitality Business Strategy

This report analyzes the impact of macro and micro environment on Hilton's business strategy. It evaluates the internal environment and capabilities of Hilton by using VRIO Framework and applies Porter’s Five Forces model to evaluate the competitive forces of the hospitality industry. It also recommends the most appropriate growth platform and strategies with the help of Ansoff Matrix.

Hospitality Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART A...........................................................................................................................................3
Analyse the impact of macro environment on organization .......................................................3
Micro Environment analysis........................................................................................................4
Critically analysis macro environment to determine and management decisions.......................5
Analyse the internal environment and capabilities of Hilton by using VRIO Framework..........5
Critically evaluating the internal environment to assess strengths and weaknesses of an
organization’s internal capabilities, structure and skill set..........................................................6
Applying Porter’s Five Forces model, evaluate the competitive forces of a given market sector
for a hospitality organization.......................................................................................................6
Appropriate strategies to improve competitive edge and market position based on the
outcomes......................................................................................................................................7
PART B............................................................................................................................................7
Evaluating different types of strategic directions available to the organization:.........................7
Justifying and recommending the most appropriate growth platform and strategies with the
help of ansoff matrix:...................................................................................................................8
Applying a range of theories, concepts and models and devising strategic planning for a given
hospitality organization..............................................................................................................10
Producing a strategic management plan that has tangible and tactical strategic priorities and
objectives...................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The business strategy is clear set of actions, goals and plan that figure out how company will
compete in a particular market with the products and services (Ali and Anwar., 2021). It refers as
the ability of handling or develop innovative ideas to compete with the rivalries for the
sustainability in market. Hilton is a global brand offer full services resorts and hotels, located in
united states. Organization offers good range of services to attract customers. This report will
discuss the impact of macro environment factors on organization. Furthermore, this report
analyses internal environment of the company by using VRIO framework. This report also
evaluates porters five forces model to analysis competitive forces of the organization. Moreover,
report will apply different range of frameworks that interpret in the strategic management plan of
the organization.
MAIN BODY
PART A
Analyse the impact of macro environment on organization
PESTEL analysis is a framework used to evaluate the macro environment of businesses.
PESTEL analysis stands for Political, Economic factors, Social, Technological, Legal and
environmental factors (Madsen., 2022).
Political factors: Hilton resorts and hotel are popular in global hotel chain. So, political stability
in country become important factor because hotels need to deal with political situation in
different countries in which organization operate.
Economical factors: before starting any business in another country, organization must check
economic conditions in which they expand business. The factors such as inflation rate, interest
rate, GDP, growth rate of that country is not control by business but it affects business
operations. Hilton has a great chain of luxurious services so they target countries which have
individuals a high disposable income.
Social factors: Hilton hotel affected by various social factors such as population growth rate,
gender ratio, culture, consumer lifestyle etc. With increase the people’s income, leads to change
the spending habits of the people. So social factor also affects the hotel industry as well.
Technological factors: in today’s competitive world there is need to improve technology. Hilton
must update its technology where is required to improve business value propositions that is offer
to the customers. Adopting technology will helps organization in reduce its cost and enhance

their customer’s experience. Hotel need to accept different modes of payment that is important in
today’s world. Due to rise of digital platform and development website has help customers to
check and book hotels from anywhere at any time (Çitilci, and Akbalık., 2020).
Legal factors: laws and regulation of country also affect the business operation of the
organization. These factors are interlinked with the political factors. Hilton hotel may look at
various laws and follow rules and regulation of the country in which company operate.
Environment factors: as now people are more protective towards environment. So, they keep
check on organization is having a proper waste management or not and what they do for
environment. Climate change is environment threat for the hotel. PESTLE analysis highlights
various elements which give great impact on the performance.
Micro Environment analysis
SWOT analysis is framework for analysing and identifying business strengths, opportunities,
weaknesses and threats. The purpose of doing SWOT analysis is increase awareness of factors
that affect the business decision and business strategy (Puyt., and et.al., 2020).
Strengths:
 Hilton has good brand recognition
 Good employees’ retention
 Hilton has good reputation in the market
 Hilton has 540 plus hotels in over 78 plus countries
 Technical innovation to enhance customer’s experience
 Strong property profile
 Extensive experience and great scope of business
 Good market share
Weaknesses:
 Lack of flexibility because of large size
 Limited market share in global market
 Operations affected globally due to various government parameters and policies.
 Overdependence on US market.
Opportunities:
 Great potential in the emerging markets
 Better and digitalization use of technology

 Make innovation in the customers services to attract more customers
 International market expansion
Threats:
 Threat of political and terrorism instability
 Stagnated growth
 High competition on price
 Political and economic turbulence in many countries
Critically analysis macro environment to determine and management decisions
Hilton hotel is operated in UK market. It is operating business in very competitive market. By
analysing PESTLE and SWOT model the strengths and weakness of hotel has been analysed.
Hotel having good profit margin because of luxury goods. When it comes political, legal,
economical and social condition of the business, is support by different opportunities and
strength of the hotel. The Hilton hotel is more focuses on target customers, so they get more
profits and give quality services. Hotel affected by the political and legal factors but due to good
strategies implementation they are able to manage it, so they offer good services.
Analyse the internal environment and capabilities of Hilton by using VRIO Framework
VRIO framework is internal analysis that helps organization to identify resources and advantages
that give business a competitive advantage. VRIO analysis of hotel will look at each and every
internal resource that provide sustainability in competitive environment. VRIO stands for
Valuable, Rare, Inimitable and Organization (Ariyani, and Daryanto., 2018).
Valuable: hotel shows that employees are valuable resources to organization. An important
portion of employees is trained, and leads to get more outcomes for the business. The employees
are loyal towards business and organization level of retaining employees is very high. For hotel
distribution networks are valuable resources.
Rare: Competencies that rare in nature are developed and possessed by handful of business in
the industry and also help in creating competitive advantages. It involves availability of the
recourses and how business accessible that to get competitive advantage. Financial resources of
hotel are found rare as per VRIO analysis.
Imitability: The food products are not costly to imitate. Theses can be acquired by competitors
and if hotel invest amount in R & D (research and development). The distribution networks are
very costly and competitors have invested good amount in research and development.

Organization: Hilton hotel distribution networks are well organized but their patents are not
organized well that means hotel not use their patents to their potential. The financial recourse is
well organized, so they used to get opportunities and make competitive advantages.
Critically evaluating the internal environment to assess strengths and weaknesses of an
organization’s internal capabilities, structure and skill set.
The Hilton hotel has the capability and skill set to grow and develop more successfully
where the strength of the Hilton hospitality are good employee retention, technical innovation
and good hare market which helps them to create and maintain the reputation of the hospitality
(Demil, Lecocq and Warnier, 2018). However, the weak areas has been evaluated which includes
lack of flexibility and over dependence on the US market which is a quite weak point.
Applying Porter’s Five Forces model, evaluate the competitive forces of a given market sector
for a hospitality organization
Porter five forces model is a strategic tool used for evaluating the competitive forces in
the market field of the Hilton hospitality. Here, explaining the entire five forces factors of the
model.
Threat of new entrants: The hospitality industry is quite huge and essential part for the growth
of the economy of the country where the hotel Hilton is having a threat of new entrants of the
hospitality industry in wider manner. It has been already known that the new hospitality will
bring the innovation in the market which helps them to attract and approach new consumers
widely. Hilton can manage their productivity and business by offering the affordable ranges and
prices to the consumers.
Threat of substitution: The hospitality industry is growing and developing day by day in wider
manner where the Hilton hospitality has a threat of being substituted due to customer increasing
demands and requirement where if the hospitality do not able to fulfil them accordingly.
Bargaining power of supplier: The supplier are more dominant and can decrease the margins of
the Hilton industry which they can earn in the market (Sanchez and Zuntini, 2018). The
hospitality industry has required to buy the raw materials from the various suppliers where the
supplier can increase the prices of the raw according to them where the consumer or hospitality
industry has to pay and buy the materials in essential manner.
Bargaining power of consumer: Consumers always demands higher than the market functions
and areas where they want affordable and best offerings available for the product and services.

The bargaining power of consumer is dominant when the similar services with less pricing are
provided by the another hospitality industry where the customers will obvious moves towards the
less pricing structure.
Competitive Rivalry: The Hilton hotel has the competitive rivalry organization such as
Marriott, Premium Inn, Radisson Blu and such more where it is important for the Hilton to create
a differentiation among these hospitalities to grow and develop in definite manner.
Appropriate strategies to improve competitive edge and market position based on the outcomes
The Hilton hospitality is required to improve their competitive strategies so that they can
be able to obtain the set goals and targets in definite manner (Ferras‐Hernandez and
Nylund,2019). The Hilton can use the Porter five forces model in effective way as it will allow
them to identify the competition and also help and support to bring the solution effectively which
will deliver the successful outcome.
PART B
Evaluating different types of strategic directions available to the organization:
Every business organization need strategic direction that can lead to continuous success
in the market, firm who focus on their growth focus on strategic adaptation of one method.
Sometimes business have to think innovative and have to focus on adopting those common
method which provide competitive advantage to the business (Bayraktar and et.al., 2017).
However, strategies have higher risk of failing that is why research become important part before
implementing strategies to get competitive advantage in the market. Hilton has to use porter
generic strategies to have clear direction who they need to act in the market, there are certain
elements of these strategies, these are:
The cost leadership strategy: This is one of the most common but important type of strategies
used by the firm to get competitive advantage in the market, cost leadership simply means
company have to reduce price of product to attract customer. Reducing price of product and
service allow company to gain competitive advantage and market leadership because no other
competitor will be ready to reduce their prices as low as possible. Hilton have to adopt this
strategy to become effective, reducing price will help them to capture market share but this will
impact their brand image as well.
The differentiation strategy: This is another important strategy which can be adopted by the
business to gain competitive advantage in the market, in this strategy, business have to

completely differentiate their product from product of competitor which simply means adding
innovative feature with same price will help company to attract customer. Hilton can adopt this
strategy to add some new feature in their hotel and professional service to attract customer, but
they still need lower their price because innovation need new pricing. In differentiation,
company need to add new feature to make product differentiate from its competitors.
The focus strategy: The focus strategy allow company to focus on niche market which means
targeting those market which have less competition and less arrangement of resource. Niche
market is already segmented which means company have to just focus on enter and survival
process. The focus strategy include both cost leadership and differentiate strategy, Hilton can
select one of the strategy to make their organization effective in competitive market, these are: Focused leadership: This simply means business have to service price as low as possible
with uniqueness in each product and service, however, business face slow speed of
growth with focused leadership because keeping price low in niche market may be failure
for the company that is why Hilton have avoided this strategy.
 Focused differentiation: This simply means business have to provide well specified
product and have to focus on differentiating their product in niche market, one of the
biggest benefit is company become stable with niche market targeting because innovation
in product provide competitive advantage in niche market where competition is already
quite low.
Justifying and recommending the most appropriate growth platform and strategies with the help
of ansoff matrix:
Every business want continuous growth and expansion in the market, even segmentation
of target market become small for business growth. Hilton is one of those companies who have
rapid growth, this company focus on adding new hotel to capture new market, Hilton is well-
known for its best expansion strategy allowing them to even survive in different market across
the world (Dawes, 2018). Using ansoff matrix, business can understand the best strategy or
growth platform to be used to increase or enter new market or perform expansion, there are four
important expansion strategy, these are:
Market penetration: This is one of the most common type where business try to sell existing
product in existing market which means company only focus on marketing efforts allowing them
to achieve this strategy successfully. Hilton can perform market penetration where they can

increase room capacity in existing market providing them competitive advantage in existing
market. Hilton's need to have best marketing strategy to make this goal possible, company need
to focus on continuous efforts to capture existing market. Hilton enjoy increase in sales with the
help of penetration strategy as exploring existing market is beneficial for the firm.
Market development: This is another effective growth or expansion strategy allowing firm to
focus on existing product but the market will be new, this concept is commonly used by
multinational business as they want to explore different market with their existing product
(Islami, Mustafa and Topuzovska Latkovikj, 2020). Hilton already have this growth strategy
allowing them to explore different market, they use existing product to enter new market, this
strategy is commonly used by every multinational business. This strategy carry the least amount
of risk which means business do not have to worry about failing in the market. Hilton can reduce
risk of failing with the help of market development where new market is explored by business.
Product development: Product development means new product in same market, this strategy is
commonly used by small scale business organization who want to introduce new product and
want to capture the marke0t (Loredana, 2016). Almost every business organization use this
method of making business successful, however, new product will face risk because existing
market might not allow new product to survive. Hilton have to consider this strategy to introduce
new product in existing market, they can provide new service to each room to attract customer of
existing market, for Hilton there is no risk because this company carry brand image and
reputation to manage product development process.
Diversification: This is one of the rare strategy used by any business organization because this is
most risky, diversification simply means entering new market with new product. Business do not
have any experience and knowledge of new market, and they introduce new product which
means high risk that even impact company's position in different market (Schawel and Billing,
2018). Hilton need to avoid this strategy because this carry most risk, however, if this strategy
able to become successful then company have higher and wonderful chance of becoming market
leader.
Applying a range of theories, concepts and models and devising strategic planning for a given
hospitality organization
The hospitality Hilton has to adopt some relevant and effective strategic strategies
planning process to achieve the set goals and targets from where they can increase their

productivity in efficient manner. Strategic planning simply defines and include the developing
the plan, mission, vision and stated goals. However, the Hilton hospitality should implement
some steps to create a well-structured plan for the successful growth and development of the
Hilton. Here, mentioning major three steps which the hospitality industry should adopt and
implement at their organization to obtain effective result and outcome.
Product and service innovation: The hospitality industry is required to understand the
innovation concept and should bring at the workplace from where they can obtain the good result
and outcome (Aula and Mantere, 2020). The Hilton hotel can adopt the unique and different
services at their place which will create a differentiation among the other hospitalities and enable
the customers to visit the hotel.
Marketing planning: The marketing process is the second important factor and procedure
Hilton hospitality should consider from where they can be able to easily market and advertise
their services and hospitality business in definite manner and provide the successful growth and
development.
Customer connection: The Hilton hotel also required to keep their focus on the customer
satisfaction where the connection or interaction is important to be considered which will result
effectively. The Hilton hotel can hire and recruit the staff who are expertize in customer handling
relationship which will allow them to convey the good communication with them and can obtain
effectiveness.
Producing a strategic management plan that has tangible and tactical strategic priorities and
objectives
The hospitality Hilton has required to adopt a strategic management plan where they can
be able to achieve their set goals and targets in definite manner (Czakon, Klimas and Mariani,
2020). The planning should include the factors like, creation of mission and vision,
implementation of the tactics and strategies, marketing planning and procedure and such more.
Thus, this entire process and planning in relation to developing of the Hilton hospitality will
provide the successful outcome and improves the productivity.
CONCLUSION
The report has concluded the meaning and brief about the contemporary issues the
hospitality industry faces in daily lifestyles. The mentioned hospitality has required to
understand the important functions of the hospitality from where they can be able to improve

themselves in definite manner and can grow and develop accordingly. This report has also
included the internal and external analysis of the environment, competitive forces, theories and
concepts for strategic planning to achieve the set goals and targets.

REFERENCES
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