Hospitality Business Strategy: Analyzing Macro-Environment and Internal Environment of Hilton Company

This report analyzes the strategy of Hilton company to compete in the market and achieve their targets. It discusses the macro-environment and internal environment of the company using PESTLE, SWOT, McKinsey’s 7 and Porter’s five forces model. The report also suggests strategies to improve the performance of Hilton company using Ansoff’s matrix. It covers topics such as customer connection, advance technology, competitive strategies, and Ansoff Matrix four strategies.

Hospitality Business
Strategy

Contents
Introduction........................................................................................................................................2
MAIN BODY......................................................................................................................................3
Conclusion.........................................................................................................................................10
References..........................................................................................................................................11

Introduction
Hilton is a worldwide hospitality company which was founded in 1919 and their headquarter in
McLean, Virginia. Its operates the three segments, management, franchise and Ownership. Now the
company had a 6,800 properties all over the world. In this report the strategy discusses that how
company make plans to compete in a market and achieve their targets along with it also analyse the
macro-environment and internal environment of the company. And also apply some models and
theories such a PESTLE, SWOT, McKinsey’s 7 and Porter’s five forces model given on the
hospitality organisation to make batter strategic plan which help the company to improve
competitive edge and market position in the market (Sabourin, 2021).
MAIN BODY
PESTEL Analysis is a framework of macro- environment factors that helps the company to
analyse the external factors such as political, economic, sociological, technological, legal and
environmental which impact the organization. It can be used to guide the managers to take batter
decisions in future and helps to achieve the organisation goals. The PESTLE Analysis the situation
and problems which impact the company of the brand along with it helps to analyse the frame work
of Hilton company to understand the dynamics changes in its business and improve it.
Factors of PESTLE Analysis: -
Political- This factors are related by the government control. Hilton hotels are very popular in
group of hotel chains so it is more important to maintain the political stability, if in case they are not
able to maintain political stability so it will affect their brand image. Hilton hotels operate their
business in different countries, so sometime they fell some difficult to maintain the political stability
because different countries have a different policy it is important to maintain the political stability.
Recently the UK left the European Union which will reduce the number of visitors visiting the UK
and this will affect the hotel industries and their revenue (Chiou, Tien, and Tang, 2020).
Economic Factors – This factors are related to the economic growth, inflation rate, unemployment
rate, CTR of the economy. This factors affect the hotel industries in direct and indirect ways they
are not control business activity but they affect the overall revenue of the company. Hilton hotels
are five-star hotel chain, so they target those countries who has high income and stable economic
environment, because it important for the growth of the company. Due to COVID-19 many
countries are having very low interest rate and loans are available in very low rate. So this a big
opportunity for Hilton to expand their business due to low availability of loan.
Social factors – This factors related to society, everything that goes in the society, affect the
organisation. Hotel industries are well knowing the social factors such as population growth,

lifestyle of consumer, etc. and Hilton hotels brand are more familiar and known the international
visitors. Due to pandemic time people have fear to intersection the various people, they avoid social
gathering and prefer to stay at home. So this situation affects the hotel industries but they don’t have
a control to over this factors.
Technological factors - Technology plays an important role to develop the economic growth. Due
to pandemic time people are more connected with technology, Hilton hotel needs to update their
technology to compete with their competitors and it is necessary to improving the value of
proposition which is given by the consumer. Adapting the new technology is very important for the
hotel industries because it helps to reducing the costs and enhance the customer experience.
Legal Factors- This factors refers to the laws made by the government which are compulsory to be
followed in order such as business law, environment law, consumer protection act, regional and
local laws Hilton hotel need to analyse the different laws of the different countries to operating a
new business. During the time of pandemics government do some changes in law polices such as
maintain distancing, sanitize the hotel room, and it is compulsory to follow this policy.
Environmental Factors- Now people are more aware towards the protection of environment and
government analyse that the company is maintain waste management properly. Hotels industries
need to take various steps to save the environment and this will help the companies to avoiding the
interruption of government (Anning-Dorson and Nyamekye, 2020). Stakeholder is group of people
which impact the organisation activity typically stake holders such as investors, employees,
suppliers, governments and so on. It can be both internal and external for the company, internal
stakeholder are those people who effect the company internally such as employees and investment.
external stake holder are those people who do not work in company but still affect the company
activities such as suppliers, creditors. The basic interrelationship between hotel and tourism industry
of stakeholder
Macro-environment of Hilton company
Macro environment refer to the factors which affect the organisation performance. It is the set of
conditions which is exist in the economy along with its include such elements suppliers, customers
and competitors.
Strength
 Good reputation in the market is the key
factor of Hilton industry and they offer
various schemes for the customer, Hilton
give a wide range of benefits which
Weaknesses
 Over dependence on US market Hilton
mostly revenue generate in the US
 Bad reviews- some of the consumer give
a bad review of Hilton hotels, on social

includes discounted prices, digital check-
in and other, this benefits are germinally
appreciate by the consumer.
 Wide range of connections Hilton is a
well-known brand and it is the large
scope of its company operations
media platform and they claim that the
brand services were poor and internal
environment is not good and this
negative review affect the company
brand image.
Opportunities
 Hilton have an opportunity to utilize the
various social media platforms such as
Facebook, Instagram, you tube and
others to promoter their brand and its
helps to attract the new consumer
(Chhatwal,2022)
 Hilton company do their business
worldwide and set their market in
developing countries.
Threats
Competition– Hilton is a top brand hotel chain
but Hyatt Hotel, Shanghai hotel are giving a
tough competition to Hilton
 Pandemics- during the COVID-19
situation Hilton face loses because of
lockdown.
Internal environment of Hilton Hotels
Strength
 Brand image
 Technical innovation
 Effective employee retention
 Good image in market
Weaknesses
 Limited market shares
 large number of debts
 Lack of flexibility because of its large
size
 Highly depend on US market
McKinsey,7s model is a framework which helps the organisation to doing better performance
in future and helps to take batter decision.
Strategy-In this plan Hilton need to make a new strategy plan to compete with their competitors,
this strategy plans helps the company to take batter decisions and achieving their Future targets.
Structure- Hilton need to make proper structure plan to maintain the working environment and it
helps to make a corporate hierarchy.

Systems- It helps the Hilton company to maintain daily activates and workflow that help to
maintain the standard operations within the company.
Shared values – This is the most important part of the organisation because it is related to the real
acceptance behaviour within the workplace and it helps built trust between manger and staff.
Skills- If Hilton provide proper tanning to their staff so it helps to improve their skills and it is god
for the company growth.
Style- Hilton style is about providing high qualities moves and give them best possible career in
every regard.
Staff- It is the pillar of the Hilton company so, they want to improve their skills and motivate them.
Porters five forces model
It is a method to analyse the company's competitive environment and these five forces drive
and determine the competitive intensity.
 Competitive Rivalry – Firstly look at the number of strength of your competitors. and then
find the answer of some questions that who is your competitor, how many rivals you have,
what are they doing in the market etc. If the company have to survive or grow in market
they need to focus on porter's four's corner models first Motivation which include drivers
and management assumptions. And the Second future action of competitors include
strategies and capabilities (Hou, Wang and Luo, 2020)
 Power of supplier- Supplier have a power to increase & decrease their prices as well as the
availability of resources. The companies cannot switch to other supplier easily, because of
higher cost or lack of alternative sources.
 Power of customer- If number of buyer is low to compare the number of supplier in a
company buyer in the market; importance of each individual buyer in the company and
switching the cost of buyer to one supplier to another. If company has just a few power full
buyers, then they have more power.
 Threats of substitute products- Close substitute products exist in the market, so it
increases the likelihood of your customer finding a different way of doing what you want to
do.
 Threats of new entry- No number of new competitors can potentially threaten a company
as established as Hilton (Gardini, 2020).

Strategies plan to improve the performance of Hilton company
To compete in the market Hilton need to make some strategies plan to enhance their performance
such as:
Customer connection- After the pandemic, Hilton analysed that people like distraction free
environment. So they started a workspaces room which offers the consumer a specious desk, chair
and unlimited Wi-Fi to do their work silently and this scheme attracts the many people and the like
the new concept.
Advance technology- During the pandemic period, people are more connected with technology,
Hilton company adapt the changes a modified their techniques and services to attract the consumer
and many consumers demand the smart technology, for example- Hilton announced that they start
robot hotel and design their interior that way which embrace the social distancing and this new
concept help the company to improve their performance (Porter, 2019)
Competitive Strategies
Competitive Strategies are based on long-term action plan of a particular company in order
to gain competitive benefit over its competitors in the industry. This strategy is focused to reach the
average position and produce a superior return on investment. This strategy is very useful when
firm is having a competitive market place and several related products available for customers.
Cost leadership strategies- This strategy is difficult to implement for small scale industry. But
Hilton is a large -scale hospitality industry so they can use pricing strategies by which they can
provide services at low cost by securing economies of scale and attract the consumer. Hilton works
continuously with its suppliers to make the supply chain efficient to reduce prices. They already
have many cost leadership factors like large distribution channel, Technology benefit and well
organised operations.
Differentiation strategies- In this strategy the main focus is to provide something different and
unique from its items and encourage the consumer to choice one brand in the market If Hilton
company is using this differentiation strategy, they can try to offer services and products with
unique features that customers value and it will create brand loyalty for their offerings and price
flexibility. For example, Hilton is using a Google hotel ads scheme to attract the new customer and
capture the market and these Hotel ads are shown on desktop, tablet and other devices.
Cost focus strategies- This strategy is quite different to the cost leadership strategy. It has a major
difference that the company targets a particular segment within the market and that segment is
offered the lowest price of the products and services. Recently Hilton has been focusing on family
market segment and they invest lots of money on advertising and on other platforms such as radio

promotion, digital and social media to attract the family conscious customers.
Differentiation focus strategies- In this strategy the main focus is to offer unique features and
services for the consumer to fulfil the demand of narrow market and use attributes to appeal its
target segments. Hilton customers do not have to worry about the price of branded services because
consumers are already familiar with this brand and company is very popular.
During COVID-19, hospitality industry has faced a lot of problems and crisis and its effect
the economy growth of UK because Hospitality Industries is playing a major role for growing the
UK economy.
Ansoff’s matrix is a statistical tool which is used by the management team to analysing the group
activity which helps in making plans and evaluate growth initiative of the company. The Ansoff’s
matrix offers four strategies such as market penetration, market development, product development
and diversification. Hilton company can use this strategy to improve their performance and Quality
of the product (Low and Ng, 2018)
Ansoff Matrix four strategies are-
Market penetration – This concept helps to increase the sales of the products which exists in the
market. This strategy is used by the company to increase the growth and performance along with
This strategy is used to measure that how much products and services are being used by the
customers and compared by the estimated market for that product. And it also helps to increasing
the market efforts and decreasing the price to attract the consumer in the market segment. It helps to
increase market investment and also increased production capacity will allow Hilton company to
reach the group of customers within the same market and earn more profit.
Market Development – This component is related with the aim of expansion and diversification of
the market and it is less risky because it does not need huge investment so it allows the management
team to take the benefit of leveraging products and selling them into a different market. The
marketers aim at non- buying customers in currently targeted section and it also focuses on new
customers in new segments. By using this strategy, the Hilton can enhance its company's growth
through introducing new services in the market and improve image of their brand.
Product Development- Product development is also known as new product management and it
refers to completing the process by taking new ideas and processing them into new product and
services lines. The main purpose to introducing a new product and services in the market to expand
their business and growth in current markets through a new products and services, it is termed as
product development. Along with that, the company’s main motive is to build the brand image in
the market so they always try to make innovative plans to attract the consumer. This strategy helps

the company to launch new product, research and development to improve the product and services
quality.
Diversification- This strategy is a high risk strategy which is based on growth planning that
involves the risk to entering into a new market and this is the concept of entering a new market with
all respect to new products and services. But it is also about giving more opportunity to build their
brand in the market (Helmold, 2020).
While the pandemic situation across all industries rages on and people face many problems,
but the hardest hit industries was travel and hospitality, like many hotel and resorts face initial
challenges such as Hilton. Now Hilton industries faces many problems which impacts the daily
activities such as the short- term impact of Brexit on the hospitality industries has been that there
has been great loss to large number of employees due to the changes in the law policy and this
shortage of employees effect the company and economic growth because hospitality company
giving a high contribution in economic growth, and when the lockdown is complete large number
of people are start travelling and hospitality industry face difficulty to handle the bunch of people
because they don’t have enough staff to handle the consumer and this crises of employees create a
difficulty to provide services to their customer. Reputational management also impact negativity for
the hotel industry. Social media platform is increasing every year and mostly consumers using
social sites and give online review. So hospitality industries have been fighting to establish their
brand name and maintain relationship with their customer to build their reputation in the market.
Environmental friendly practices are difficult to maintain because people avoid personal meeting
and this things impact negatively in hospitality industries, so Hilton need to work on this and make
some innovative plans to adapt the changes and solve the problem (Lee, Lee and Kim, 2021).
Strategies plan of Hilton
Hilton tries to inspire the people and build the trust and confident in both travel and their brand
image so they make strategies which are listed below:
Product innovation- During the COVID time the travellers' taste and preferences have changed,
now they search these hotels which are more concerned about the cleanliness and protection to
compare the high services, so Hilton doing a partnership with Lysol the most trusted household
brand, which help to build the trust for the consumer. Hilton promotes cleaning and hygiene’s
program by posting pictures and videos in their social channel which are showing the cleaning
protocols. This idea helps the company to gain trust and loyalty.
Marketing Creativity – Hilton has started a new scheme to attract the customer, they announced
the global marketing campaign “To new memories “and this campaign’s motive is to attract those

people who are passionate for travelling and they offer packages and discounts for those consumers
(Aliekperov, 2021).
Conclusion
In above report went to detail regarding the topic of hospitality business strategies. Then give brief
description of the Hilton company and some more information related to the topic. After this we
apply some theories such as PESTEL, SWOT, McKinsey’s and further more theories and models to
understanding the concept of strategies plan which is Help the Hilton company to make a Batter
strategies plan. In section B part we evaluate the porter’s generic strategies theory and justify the
strategies plan through Ansoff’s Matrix. Lastly give some important points that help the company to
compete in the market.

References
Books and Journals
Sabourin, V., 2021. Strategic Management for the Hospitality and Tourism Industry: Developing a
Competitive Advantage. Apple Academic Press.
Chiou, C.C., Tien, L.C. and Tang, Y.C., 2020. Applying structured computer-assisted collaborative
concept mapping to flipped classroom for hospitality accounting. Journal of Hospitality, Leisure,
Sport & Tourism Education, 26, p.100243.
Anning-Dorson, T. and Nyamekye, M.B., 2020. Be flexible: turning innovativeness into
competitive advantage in hospitality firms. International Journal of Contemporary Hospitality
Management.
Chhatwal, P., 2022. Development strategy and brand management. In Developing Hospitality
Properties and Facilities (pp. 59-82). Routledge.
Hou, J., Wang, C. and Luo, S., 2020. How to improve the competiveness of distributed energy
resources in China with blockchain technology. Technological Forecasting and Social Change, 151,
p.119744.
Porter, G., 2019. Vietnamese policy and the Indochina crisis. In The third Indochina conflict (pp.
69-137). Routledge.
Low, J.S.C. and Ng, Y.T., 2018. Improving the economic performance of remanufacturing systems
through flexible design strategies: a case study based on remanufacturing laptop computers for the
Cambodian market. Business Strategy and the Environment, 27(4), pp.503-527.
Helmold, M., 2020. Lean management and Kaizen. Springer international publishing.
CNS-BC, F.C.N.S.I. and Morin, T.L., 2020. Increasing patient safety in hemodialysis units by
improving handoff communication. Nephrology Nursing Journal, 47(5), pp.439-446.
Lee, Y., Lee, S. and Kim, D.Y., 2021. Exploring hotel guests' perceptions of using robot
assistants. Tourism Management Perspectives, 37, p.100781.
Aliekperov, A., 2021. Creating Business and Corporate Strategy: An Integrated Strategic System.
Routledge.
Gardini, M.A., 2020. Tourismusmanagement. Grundlagen des Tourismus, p.133.

jjjjjj2020)2020)(CNS-BC,and Morin2020)(Lee, Lee,and Kim,2021)(Aliekperov, 2021)
(Gardini,2020)