This report analyzes the impact of macro-environment on Hilton and its tactics, critically evaluates internal environment and capabilities of Hilton, applies Porter's five forces model and evaluates competitive forces, and recommends the most appropriate growth strategy for Hilton.
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HOSPITALITY BUSINESS STRATEGY
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Table of Contents INTRODUCTION...........................................................................................................................3 PART A...........................................................................................................................................3 Analysing the impact and influence of macro-environment on Hilton and its tactics.................3 Critically examine hospitality macro environment to identify and inform strategic management decisions.......................................................................................................................................5 Analysing internal environment and capabilities of Hilton.........................................................5 Critically evaluate internal environment to assess strengths and weaknesses of Hilton.............6 Applying porter's five forces model and evaluating competitive forces.....................................7 Devising relevant tactics to improve competitive edge and market position..............................7 PART B............................................................................................................................................8 Evaluating the different strategic directions that are available for Hilton...................................8 Recommending and justifying the most appropriate growth strategy or platform to the organization..................................................................................................................................9 Interpreting strategic planning for Hilton....................................................................................9 Strategic management plan having tactical and tangible strategic objectives...........................10 Competitive analysis for producing a set of valid strategic directions......................................11 CONCLUSION..............................................................................................................................11 REFERENCES..............................................................................................................................12
INTRODUCTION A business strategy, plays significant role in development and growth of hospitality organizations, either they are small or large. It is considered as strategic element that utilized to make a company productive and profitable as well as competitive in varied terms. The current assignment will be based on Hilton, which falls under the category of leading hotels in the UK. The study will explain the influence and impact of macro-environment on chosen hotel and its strategies. It will also define the internal analysis of Hilton and its capabilities by applying suitable frameworks. Furthermore, the report will specify porter's five forces application to define competitive forces. It will justify varied forms of essential directions accessible in company context and justify suitable suggestions through application of Ansoff' growth matrix. Lastly, the report will clarify the range of theories and models and explanation of key planning procedure that apply in selected hotel context. PART A Analysing the impact and influence of macro-environment on Hilton and its tactics. In case of Hilton, PESTLE and SWOT analysis as strategic frameworks may apply, which enable organization to identify the key factors that put impact on or influence business and strategies, either in negative to positive manner. Political factor- Political stability, tax rate, trade policy and other terms are included in political factor (PESTLE Analysis for Business Analysis,2022). Any form of change related to each term may put direct impact on Hilton and its venture tactics, such as expansion, marketing, customer service, etc. In the UK, political stability is the best force that allow firm to grow rapidly in form of expanding venture. Economic factor- Modifications related to economic growth, income level, employment, GDP, etc. as economic factors affect directly upon organizational growth and success in the hospitality sector. In case of Hilton, it may affect positively in form of driving the attention of hotel toward taking pleasure of increasing profitability (Srdjevic, Bajcetic and Srdjevic, 2018). It may affect current and further tactics in term of developing plans to enhance customer satisfaction even better than last few years. Social factor-
In the recent time, online purchasing and technology usage are the best trends that considered as social factors and impact on Hilton positively. It may affect its strategies in form of driving management attention toward forming plan to make brand capable accessible online. Technological factor- Technology advancement plays significant role in the context of Hilton growth and tactics effectiveness as it influence in positive way. It may enable management to form plans and strategies by using digital marketing platforms that allow promoting venture globally as well as initiatives that it may take to satisfy customers and other stakeholders. Legal factor- Change in the context of employment law, business practices and other terms related to corporate world, affect negatively upon Hilton in term of increasing a lot of pressure to make possible alter in current practices. It may affect any tactic of firm in similar manner, which is not suitable for stakeholders expectations and outcomes that they are expecting to gain. Environmental factor- Environmental sustainability related concern, among customers, governmental bodies and stakeholders, may put direct impact on Hilton and its effective strategies, positively. As organization already take initiative to become a sustainable brand in the hospitality sector in form of developing sustainable strategies. SWOT analysis- Strengths- Excellentbrandrecognition,skilledworkforceandeffectiveemployeeretention strategies are those strengths that Hilton may have and utilize to gain competitive advantages, still having complex business environment (SWOT Analysis,2022). By using each strength, hotel may take gain benefit of achieving target aims. Weaknesses- Limited market share, lack of training plans and over-dependency on US market, are the major weaknesses that Hilton may have. As it may put negative impact on its success and strategies related to that. It may lead to decrease the effectiveness or efficiency of company operational practices. Opportunities-
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Technology advancement, talent accessibility and appropriate leadership styles, are those opportunitiesthatHiltonanditsmanagementmaygrabinappropriateway, informof developing plans. They may take approach to implement new technology, and hire people to enhance organizational productivity. Threats- Intense competitive, pandemic and regulatory framework changes are the key threats that may create more challenges for Hilton to grow in competitive and productive manner. It is quite essential for organization and its administration to consider each threat appropriately, for purpose mitigating all. Critically examine hospitality macro environment to identify and inform strategic management decisions. It can be critically analysed that by using and applying PESTLE and SWOT analysis, the strategicmacroenvironmentalfactorshasdeterminedthatinformstrategicmanagement decisions in positive term. It has enabled them to develop appropriate strategy that might be utilized to overcome the adverse impact of legal factor. Along with that, the implementation of both models inform management decisions in term of developing plans to implement new technologies that they may utilize to gain competitive benefit and stand in similar term. Analysing internal environment and capabilities of Hilton. There are different forms of strategic models accessible in the corporate world that applied in the context of varied companies (McKinsey 7S Model,2022). In case of Hilton, Mckinsey’s 7s model is apply, which allow managing and organization to identify their internal environment and determine capabilities. McKinsey’s 7s framework- Structure- Hilton is able to utilize specific organizational structure that enhance its capability and internal business performance. It may utilize hierarchical organizational structure that allow firm to take pleasure of increasing productivity and improving venture performance. Strategy- By applying current model, it can be analysed that Hilton may have appropriate strategies that it may utilize to retain skilled people and hire the same, who may make guest happy and
satisfied (Chmielewska and et.al., 2022). Its effective management teams may have capability to conduct this practice in collaborative and coordinative form. Systems- For purpose of achieving aims and objectives as well as forming further, organization may able to utilize the best systems, and keep them update all the time. This internal venture practice allow Hilton to grow and give tough competition to rivals. Style- In the chosen company leaders are able to utilize the best leadership styles, which enable them to create positive working environment in the workplace. As it allow Hilton to be capable to stand competitive for longer, which is quite essential and beneficial too. Staff- For purpose of aim achievement, organization may able to work with those candidates who are working in the human resource department. With these employees, it may develop plan to enhance staff performance in form of training and development in which each candidate is accountable to take part connotatively. Skills- In the Hilton, management may have number of candidates who have set of skills and capable to utilize the same in appropriate way. They are able to use their competencies for purpose of aim achievement and formulation of new goals by considering further organizational development needs. Shared values- In the chosen hotel, managers and leaders may take initiative to share key message with employees, which make them productive and confident about what they practice achieving a goal. Critically evaluate internal environment to assess strengths and weaknesses of Hilton. It can be critically evaluated that internal environment of chosen company is full of strength and weakness. Skilled employees in return provide hotel a lot of benefits, while they may affect negatively when each candidate may do not fulfil their needs. On the other hand, its weaknesses such as over dependency may impact negatively upon firm in form of decreasing effectiveness to grow independently.
Applying porter's five forces model and evaluating competitive forces. Porter's five forces model- Bargaining power of customers- The extent of this force is low, because there were zero substitute of accommodation and other hospitality related services as well as products accessible in the world. It may enable Hilton to gain competitive benefit in form of retaining potential guest and building wide customer base. Bargaining power of suppliers- The degree of this force is low, because number of suppliers available in the hospitality industry, from with Hilton may work collaboratively (Martinez-Contreras and et.al., 2022). It may enable organization to take pleasure of managing expand ventures productively and competitively. Threat of new entrance- The threat of new hotels or organizations entrance in the sector is low, because of additional requirements that is not possible for each and every company to do that. This force may also provide benefit to Hilton in term of increasing profitability by building strong brand image. Threat of substitute products and services- The extent of this force is low, which may put positive impact on chosen hotel in form of retaining and acquiring new potential guest who are able to conduct word of mouth promotion activity after obtaining appropriate satisfaction. Competition between existing rivals- Due to intense competition in the existing hotels of hospitality sector, Hilton may face challenge to sustain for longer and manage venture appropriate as it may drive its attention toward making the best tactics and changing the same according to competition level. Devising relevant tactics to improve competitive edge and market position. The organization may provide their customers with several discounts and offers which are helpful in order to attract them towards the brand. These additional offers and useful in increasing the interest of the customers towards the products and services which are offered by the business to their customers. This is beneficial in order to gain a significant competitive advantage in the industry and reduce the dominance of the competitors in the market. With the
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help of these tactics the business will be able to enhance their overall performance in the industry and have a better impact on their customer's buying behaviour. PART B Evaluating the different strategic directions that are available for Hilton Strategic directions are referred as plans which are implemented for an organization to fulfil its aims and objectives.It provides better assistance to the business to follow a specific path and achieve success in the industry. The Porter's Generic Strategies is an effective framework which helps in determining the direction strategies available for the organization. It includes 4 different strategies which are as follows: Cost leadership strategy A broader market may be targeted by different organizations by using this strategy which suggests that the business should keep their prices as low as possible in order to increase the customerengagement.Thisstrategyisusefulforacquiringmorecustomersandgaining competitive advantage in the industry. Differentiation Unique features are developed by organizations in their products under this strategy which helps in attracting the customers (Aladag and et.al., 2020). It focuses on improving the product and providing a high quality experience to the consumers. Cost focus A niche market is targeted by an organization under this strategy by evaluating different market segments and fulfilling the demand of the customers. The costs remain low under this strategy which is useful for improving the overall growth in the market. Differentiation focus According to this strategy the products with unique features are offered to niche market segments which helps in developing strong brand loyalty among the customers. It helps the business to gain competitive advantage and be aware of the strengths and competencies of the business.
Recommendingandjustifyingthemostappropriategrowthstrategyorplatformtothe organization Ansoff Matrix is an effective framework which is used by analysts and management teams in order to develop strategies for evaluating their growth in the industry. It consists of four strategies of which the market development strategy is appropriate for the business in order to enhance their sales in the new markets by offering better services to the customers. The hospitality organization is may increase its opportunities to grow with the help of this strategy which is useful in expanding the market share of the business(Elkhwesky, 2022). This strategy is beneficial for the expansion of the business in the international markets successfully. It is useful for the organization in order to enhance their services and gain better advantage in the industry. Hilton may also expand into several new domestic markets as well which have a significant impact on the overall development of the business. This strategy is appropriate for the business to grow in the highly competitive market and increase its popularity among the customers. This provides a better platform for the organization to achieve more popularity in the industry by making effective offering their existing services to new markets. Interpreting strategic planning for Hilton Strategicplanningisreferredascreating,implementingandevaluatingdifferent strategies for business to achieve their long term goals effectively. It helps in integrating different deportments such as finance, marketing, human resources etc. in order to enhance the overall business services. The blue ocean strategy is an effective strategic planning model that explains that the businesses are able to gain better advantage in the industry(Shulga, Busser and Bai, 2021). This model is designed in a way to facilitate the growth of business in the competitive environment and provide better assistance in order to gain competitive advantage in the industry. The niche markets are targeted by the business under this model for increasing its market share in the industry and engage the customers towards the products and services that are offered by the business. This is useful in increasing customer's interest in the products and provide them with better assistance and guidance for engaging in the practices of business development. It evaluates different markets which are suitable for the business to grow an appropriate market share in the industry and gain better advantage for the overall development of the organization. It is crucial for the Hilton to adopt these strategies and engage their services in order to achieve higher
qualityof output in the industry. The organizationhasa creativeapproach towards the development of their products and services which is crucial in order to enhance their overall impact on the different factors that are decided by the organization(Konovalova and et.al., 2018). The organization always gives priority to develop innovative and creative offers for the customers which are crucial in order to gain better competitive advantage in the industry and expand the services of the business. The different tactics are used by Hilton in order to increase its competitive advantage in the industry and expand into various new markets. The company considers increasing their efficiency by their continuous efforts towards the development of the business practices. \ Strategic management plan having tactical and tangible strategic objectives Strategic management is referred as the process of choosing appropriate strategies for the organization in order to gain better advantage in the industry. These strategies are developed by the business in order to achieve better results that are useful for the business to enhance their competitive advantage in the industry. The factors of strategic management plan are as follows: Environmental Scanning Collecting,providingandevaluatingrelevantinformationfortrustedsourcesand research is one of the most important factors for the strategic management of the business. It helps in analysing the external and internal factors which are crucial for Hilton to identify the key elements and develop an appropriate strategy for the business. Strategy Formulation It is the best course of action which can be taken by the business in order to achieve the organizational aims and objectives for the overall development of the business in the competitive environment(Tajeddini, Martin and Ali, 2020). The strategies are formulated by the managers of Hilton after analysing the business environment effectively. The objectives may be achieved by the business by successfully formulating the plan on the basis of an appropriate analysis. Strategy Implementation The organization implements their strategy with the help of various professionals who have a significant experience and knowledge about the topics which are crucial for the business to grow. The organization fulfils its objective of gaining a higher market share by successfully implementing these strategies in the market.
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Strategy Evaluation The final and the foremost step in the plan is to monitor the factors which are considered in the strategic plan and what impact these factors have on the overall development of the business in the market. This step is useful for the business to measure their performance and evaluate the plan which is prepared by them for improving their overall advantage in the industry. Competitive analysis for producing a set of valid strategic directions Hilton is a popular hospitality organization all over the world and is recognized for its premium services to the customers. Though, there are many competitors in the market such as Marriot, Sheraton, Radisson Blu which have a significant marke6t share in the industry and are considered by the customers as preferable(Nikolskaya and et.al., 2020). These competitors have a negative impact in the overall success of the business in the industry which imposes negative impact on its profitability in the environment. The hospitality industry is highly competitive in the nature having a lot of business in the market which have loyal customers. Hilton is an established brand and has a significant market share in the industry which can be endangered to the new and attractive offerings that are provided by these businesses to the customers. CONCLUSION On the basis of above discussion, it has been concluded that macro and internal environmental analysis has enabled management to determine the key factors that impacted positively and negatively upon organizational growth and success. These two forms of analysis has contributed to make effective strategies in form of driving the attention of managers and leaders in the hotel to do that systematically. Furthermore, by summing up above analysis, it has beensummarizedthatapplicationofporter'sfiveforcesmodelhassupportstoachieve organizational aim and objectives. It has contributes to enhance organizational performance and productivity by driving management attention toward considering and collecting information related to each force that in turn provide benefits and create complications as well. It has been also determined that organization has gained competitive advantages in varied manners such as in term of developing tactics by considering internal and external business environmental analysis outcomes.
REFERENCES Books and journals Aladag, O.F. and et.al., 2020. Strategy implementation research in hospitality and tourism: Currentstatusandfuturepotential.InternationalJournalofHospitality Management.88.p.102556. Chmielewska, M and et.al., 2022. Evaluating Organizational Performance of Public Hospitals using the McKinsey 7-S Framework.BMC health services research.22(1). pp.1-12. Elkhwesky, Z., 2022. A systematic and major review of proactive environmental strategies in hospitality and tourism: Looking back for moving forward.Business Strategy and the Environment. Konovalova,E.E.andet.al.,2018.Formingapproachestostrategicmanagementand developmentoftourismandhospitalityindustryintheregions.Journalof Environmental Management & Tourism.9(2 (26)). pp.241-247. Martinez-Contreras, R. M and et.al., 2022. Pestel Analysis and the Porter's Five Forces: An Integrated Model of Strategic Sectors.In Handbook of Research on Organizational Sustainability in Turbulent Economies(pp. 292-314). IGI Global. Nikolskaya,E.Y.andet.al.,2020.Formulationofdevelopmentstrategyfortourismand hospitality industry.International Journal of Management (IJM).11(3). pp.467-474. Shulga, L.V., Busser, J.A. and Bai, B., 2021. Hospitality business models, customer well-being and trust: the mediating role of competitive service advantage.International Journal of Contemporary Hospitality Management. Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2018. Identifying the criteria set for multicriteria decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water intake structure.Water resources management.26(12). pp.3379-3393. Tajeddini, K., Martin, E. and Ali, A., 2020. Enhancing hospitality business performance: The roleofentrepreneurialorientationandnetworkingtiesinadynamic environment.International Journal of Hospitality Management.90.p.102605. Online McKinsey7SModel.2022.[Online].AvailableThrough: <https://corporatefinanceinstitute.com/resources/knowledge/strategy/mckinsey-7s- model/>