Business Strategy for Hilton Hotel

This report analyzes the influence of macro environment factors on Hilton Hotel and evaluates its internal capabilities using various frameworks. It also applies Porter's Five Forces model to assess the competitive forces in the hospitality industry.

Business Strategy
(Unit- 41)

Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
P1/M1 Analysis of influence and impact of the macro environment factors on the firm and its
strategies.................................................................................................................................................3
TASK 2 .........................................................................................................................................................6
P2/M2 Analyzation of the internal capabilities and environment of the organization using various
frameworks..............................................................................................................................................6
TASK 3..........................................................................................................................................................9
P3 Applying Porter’s Five Forces model, evaluate the competitive forces of a given market sector for a
hospitality organization...........................................................................................................................9
M3 Provide appropriate strategy to improve the competitive edge and the market position based on
outcomes...............................................................................................................................................11
TASK 4........................................................................................................................................................11
P4 Apply concepts, models and theories to devise strategic planning for the venture.........................11
M4 Strategic management plan.............................................................................................................13
CONCLUSION.............................................................................................................................................15
REFERENCES..............................................................................................................................................16

INTRODUCTION
Business strategy is an essential aspect for the businesses as it helps them to grow and
develop in the competitive market. Hospitality industry has been the largest growing sector in the
whole economy where there is a strong competition so it is very important for the businesses in
this sector to plan their strategies in such a manner that they can take the competitive advantage
in the market. Business strategy can be defined as the set of long term plan that is mainly
adopted by the companies so that it can compete with competitors that offer same range of goods
and services. It covers different aspects such as offering of the business, the target customers,
market which is required to be served and many others (Wright, 2020). The organization in this
report is Hilton Hotel. It is a global group of resorts and hotels that has around 600 hotels in the
whole world. it was established in the year 1919. This report will cover internal analysis of the
organization by using various models, internal capabilities and environment analysis by using
different frameworks, competitive analysis and strategic management plan.
TASK 1
P1/M1 Analysis of influence and impact of the macro environment factors on the firm and its
strategies.
The external environment can be referred to as a condition in which the business operates
as a whole. There is a strong influence of this on the functioning of businesses and every
organization is required to analyze its impact before making any decision. There are various
framework being used to analyze the macro environmental impact on the Hilton Hotel that are
discussed below
PESTLE Analysis
It is a framework that is mainly used in order to analyze the macro environmental factors
which may affect the decision making and functioning of the organization (Mondragón-
Ixtlahuac, Cortés-Martínez and Delgado-Hernández, 2017). In relation to hotel Hilton, PESTLE
analysis is discussed thereunder-

 Political- It involves the political environment of the country where the business
operates. With the political stability in UK, hotel Hilton gets many advantages that help it
to flourish its business but the Brexit may affect the working of the hotel as there will be
decreased number of visitors which may affect its profitability. Moreoevr, the rise in
import duties or tax rates or changes in the policies may affect the operations of the hotel. Economic- It includes the factors such as foreign exchange currency rate, inflation rate
etc. as hotel Hilton is a chain of various hotels that is luxury in nature so it targets the
wealthy customers. For instance, due to inflation, the company may increase its price for
availing service which may make it difficult for the organization to retain customers. Social- It includes the socio-cultural factors like purchasing power, supply, demand, etc.
as there has been increased in the spending habits of the people (Antipov and et. al.,
2019). This may help hotel Hilton to attract more of the customers. But there has been a
trend change where people prefer affordable rented apartments and hostels in place of
hotels when traveling to gain better travel experience which may affect the business of
Hilton Hotel. Technological- It is concerned where technological advancement that helps the working
of organization. As hotel Hilton has deployed new technologies in its working such as
digital payments, online booking, etc. so that the customers are given enhanced
experience but at the same time this has also affected its profitability as there has been
high cost in deploying it. Legal- It includes the laws which are required to be complied by the organizations such
employment law for protecting rights of staff from exploitation, data protection to protect
the privacy of people, etc. Hotel Hilton monitors every law of every country where it
operates so that there is no hardship faced by it and any change in law is immediately
adopted by it so that they do not face any legal consequences.
 Environmental- It includes those activities of business which affect the environment.
Hotel Hilton takes initiatives in a continuous manner to reduce its impact on the
environment by promoting such activities that brings sustainability. For instance, it has
rain water harvesting in its premises which helps in saving the water. Moreoevr, it makes
sure that there less wastage of resources and optimum utlisation of it so that minimum
wastage is done.

Stakeholder analysis
The corporations and organizations are built by the personnel that indirectly and directly
affect the business. The power interest grid is used below for analyzing the personnel where it
categorizes the stakeholders into 4 different categories according to their interest and power into
the organization. In relation to hotel Hilton, it is discussed below-
 High power high interest- This category includes those personnel which are required to
be closely monitored and given with information as they have high interest and power
into the organization. The owners and top level management of hotel Hilton are included
in this category and they are required to be satisfied fully with excessive information. Low power high interest- Those stakeholders are included in this category which are
required to be kept informed as they have high interest but low power. The employees of
Hilton Hotel are included in this category so they are required to be informed with
general information of the hotel as they work da and night for the growth and success of
company.. High power less interest- It takes on those stakeholders which have less interest but more
power in the business so they are needed to be kept satisfied. The customers of Hilton
Hotel are categorised in this because they have high power in the organizationas its
profitability depends on their footfall.
 Low power low interest- It includes those stakeholders which have very less power and
interest so they are only required to be given general information to a certain extent. The
government and suppliers are included in this category so they are only required to be
monitored by the Hilton Hotel (Met and et. al., 2020).
Role of stakeholders
The stakeholders plays an essential role in handling the working of the company as they
have high influence in decision making due to their interest and power in the organization. For
instance, the top level management have infleucne over major decision making as they have high
interest and power while the employees has high interest so that they are required only to provide
suggestion or share opinion when asked. Their major effect on organization is that the whole
working is moulded as per their opinion and decision making due to their interest and power in
organisation.

TASK 2
P2/M2 Analyzation of the internal capabilities and environment of the organization using various
frameworks.
It is very important for the organization to analyze its internal environment so that its
capabilities are used efficiently in order to achieve the goals and objectives of the company. The
strategic capabilities are defined as that process which offers improvement and enhancement in
the strategy of business so that the modified strategy is implemented in order to take the
competitive advantage. Different frameworks has been used below which can help hotel Hilton
to analyze its internal capabilities and environment so that its business strategy is made
effectively.
Resource based view
It is a framework that is used by managers in order to utilize the resources of the
organization so that they are exploited easily. The businesses must use its resources in an
optimum manner with minimum wastage so that it can achieve sustainable competitive
advantage in the market. This framework helps in taking the competitive advantage as the
attention of the mangers are on the internal resources of firm in the effort to identify the
capabilities, assets and the competencies with a potential in order to deliver the competitive
advantage. There are 2 types of resources in Hotel Hilton which includes firstly the tangible
resources such as financial, human resource, etc. and secondly intangible resource such as
intellectual property rights like trademark (Hinterhuber, Vescovi and Checchinato, 2021).
VRIO Analysis
It is a model that mainly categorize the resources of the organization into different categories
to see whether those resources are capable enough to take the competitive edge over others. The
categorization of resources helps in taking the competitive advantage as it tells which resource
hold what importance and how it can be used for grabbing opportunities and combating threats.
In relation to hotel Hilton, its resources are categorized in the following categories that are
narrated below-

 Valuable- It includes those resources that add value to the organization and in the
absence of it, there cannot be a smooth functioning. The financial resource of the hotel
Hilton is considered as its valuable resource because it helps in functioning of the
business and supports in making such investment that can help in grabbing the
opportunities and mitigating the threats. It is considered as valuable as they have been
acquired by the hotel from its long term profit. Rare- The resources which are rare in nature are included in this category. The risk
taking capability of hilton hotel is its rare resource as it has ability to expand and grow in
unknown regions and countries. Moreover, its risk assessment function is also strong
through which analyses the opportunities and take appropriate action in order to grab it. Inimitable- It comprises of those resources which are difficult and costly to imitate. The
brand value of hotel Hilton is inimitable as there have been long term loyal customers of
the hotel as it makes its brand image strong enough to help it in taking the competitive
advantage in the market.
 Organized- Those resources are included in this that is organized for the organization.
The distribution network of Hilton Hotel is organized as it makes use of this network in
order to reach the consumers so that its services are provided to them with the sole
motive of gaining competitive advantage (Štofová and Potoma, 2020).
McKinsey 7s
It is a framework that identifies is the internal elements of the organization and categorizes
them into soft and hard category. This model includes 7 internal elements which are required to
be aligned with the business in order to make it successful. In context to hotel Hilton, it is
discussed below-
 Strategy- It includes a plan for the organization in order to maintain and build
competitive advantage. The hotel Hilton uses the service differentiation strategy where it
has high quality services for its customers with advanced technology so that it can match
the status of its wealthy guest. Structure- It includes the way in which the organization is organized in terms of teams or
department. The hierarchical organizational structure is being used in the Hilton Hotel

due to its large size but its structure is divisional also that is divided into ownership,
franchise and management. System- It involves the daily procedures and activities of the organization. There are
different systems in Hilton Hotel such as customer reservation, quality control,
performance evaluation, performance appraisal and many others. Shared values- It includes core values of the company which reflects its work culture and
ethics. Hotel Hilton follows some values like good hospitality, leadership, integrity in the
work, ownership and teamwork in the actions and decision making. Style- It includes the leadership style adopted by the company. Hotel Hilton follows
laizze fair leadership style where in the managers are offered with the power to make
important decisions. Staff- It includes the number of employees and its competencies. Hotel Hilton has
approximately 173,000 employees who worked day and night for its success.
 Skills- It is concerned with the skills and capabilities of the workforce. Hotel Hilton
provides timely training to its staff so that they are highly trained and skilled in order to
provide customer experience in an enhanced manner (Kolev, 2021).
TASK 3
P3 Applying Porter’s Five Forces model, evaluate the competitive forces of a given market
sector for a hospitality organization.
Porter five forces Framework is a method of analyzing competition of business. The
information related to industrial and Organization economic about external as well as internal
forces determine competitive intensity and other factors which determine specific industry. Threat of new entrant: according to this force factor means if there is low barrier and
entrant then other company can grab the opportunity to enter in competitive market. But
in another case there is high new enter barrier it will be difficult to to enter in competitive
market. The power of this force for Hilton hotel is low as it takes high investment and
resources to enter the luxury chain of hotels which is not possible for any new entrant so
this makes the power of the force low.

 Bargaining power of buyers. It is referred to pressure on consumer that create the
business to get them provide high quality products that our customer services in a low
price. The power of this force for Hilton hotel is moderate as Hilton is the chain of luxury
hotels which only attracts wealthy customers so the customers do not really bargain on
price but they have high switching power due to many competitors being present in
market such as Marriott, etc. Bargaining power of suppliers: the bargaining power of suppliers refers as a pressure on
manufacturer that creates more quantity in market in terms of price reducing the quality.
In context of Hilton Hotel there is low bargaining power of supply because the hotel deals
with many suppliers and takes dominant position over there so this makes power of this
force low. Threat of substitute: it refers that the thread will generate of substitute only occurs when
the similar type of product leads to the competitive market in lower price and provide the
same standard of quality to customer. For Hilton hotels there is a moderate threat of
substitute because there are many alternatives to hotels nowadays such as motels, hostel,
cottages, rented apartments, etc. which makes its power moderate.
 Competitive rivalry: it is rapper to competition between firms within an industry and
create pressure on one another limit each other’s profit potential. As most Hospital
industry competitors are categorized according to the similarity of prices and services.
For hotel competitive rivalry is very high for Hilton hotels because there is more
competitors in hospitality market such as Marriott Hyatt Radisson and so on are in
present market who are providing similar type of product with the same quality of service
(Bramantyo and Asvial, 2019).
M3 Provide appropriate strategy to improve the competitive edge and the market position based
on outcomes.
As above Porter five forces explanation in perspective of Hilton Hotel. There are certain
threats which need to recover for make better competitive advantage. New entrant as a a various
of entry is low in which many small and large hospitality venture can easily enter into computer
market which can be e difficult to Hilton hotels for compete in competitive market. To make sure
that the quality which Hilton Hotel services provide it should be accurate and prices must be

implement as per the customer demands and it must be negotiable easily. Another high threat
from competitive players who are already exist in hospitality competitive market such as
Marriott Hyatt Radisson all these are premium segment of hospitality service provides. For
Hilton they need to make sure that their quality of service and the commitment to customer must
be fulfilled by providing a better accurate services (Burson, 2017).
TASK 4
P4 Apply concepts, models and theories to devise strategic planning for the venture.
Strategic planning includes applying various models and theories so that there can be
effective planning in the business. There are different frameworks which can be used by hotel
Hilton in order to plan it's strategies that are narrated below-
Strategic management plan.
Vision Its vision statement is to fill earth with warmth and light of the
hospitality.
Mission Its mission statement is to become the first choice of the customers,
owners and team members.
Objectives
Specific Measurable Attainable Relevant Time
To increase
the customer
reaches by
attracting
more
customers.
To increase
the customer
reach by
20%.
This goal
may be
achieved by
introducing
innovative
service in
hotel such as
virtual check
in and
It will help
in increasing
profitability
of
organization
.
15 months

digital keys
so that
customers
can be
attracted.
To increase
the sales
volume.
To enhance
sales by
40%.
By
introducing
new loyalty
programs,
discounts
and offers to
attract
customers.
It will help
in increasing
customer
base.
12 months
Strategy For attracting large customer base and increase the sales volumes,
Hilton Hotel can opt the market development strategy wherein it can
take its existing services to other new market so that it can expand its
operations in new place. The business operates in the environment
which consist of external and internal. For externally analyzing the
environment, Hilton can move to such place where the
environmental conditions such as political stability, economic
condition, etc. are favorable for the company.
Frameworks Focus strategy
Ansoff Matrix is a framework which consists of 4 different
strategies that may be opted by the business so that it can grow and
expand. The hotel Hilton can adopt any of these strategies so that it
can plan for its expansion and growth. Various strategies of this
matrix are narrated there under-
 Product development- It is a strategy which focuses on
bringing new offering into the market but the new product is

introduced in existing market only so that the consumers are
served with the better product. Hotel Hilton can opt this
strategy and enhance its service for its existing customers so
that it sales is increased.
 Market penetration- It is that strategy which focuses on
increasing the sales as there is focus on existing offering in
the existing market. Hotel Hilton can adopt this strategy and
focus on making improvement in its services so that its
customer base is enhanced and the sales volume is increased.
 Market development- It include that strategy which focuses
on entering the new market but with the existing offering so
that a new customer segment is attracted. The hotel Hilton
can adopt this strategy for increasing its customer reach so
that it can attract more of the guests and increase its
profitability and sales.
 Diversification- This is considered as the most risky strategy
as it involves entering the new market with the new offering
for the new customers. This strategy may be opted by hotel
Hilton so that it can function in a new market for the new
customers and establish its brand value (Silva and et. al.,
2019).
Competitive strategies
Porter's generic strategy framework consists of various
strategies that can be opted by the organization so that it can classify
the organizational behavior. There are different strategies in this
model that can be opted by Hilton Hotel in order to plan strategy that
are discussed below-
 Cost leadership- Under this strategy, the organization
becomes the low cost producer in which it reduces the cost of
its service so that it can deliver the services in different

segments of market so that it can generate sufficient revenue
and profitability. Hotel Hilton can use this strategy and
provided services in low cost to the customers so that the
middle income people are also attracted.
 Differentiation- It is a unique strategy as it focuses on
bringing innovation in the offering so that it can be valued by
the consumers. The hotel Hilton can opt this strategy and
choose anyone attribute that is perceived by it as an essential
so that it can position itself uniquely in the market to meet the
demands of guest. Any innovation in its service can help
Hilton Hotel to attract more customers, thereby resulting in
increased sales.
 Focus- This strategy has 2 aspects of which first is cost focus
where the hotel Hilton can offer its services at low price so
that different customer segment is attracted and second is
differentiation focus where it can bring innovative service for
the guest so that enhanced experience is provided to them
(Fallah Haghighi, Mirtorabi and Bijani, 2020).
Bowman’s Strategic clock
This model consists of different strategies that can help the
organization to position itself correctly so that it can beat the
competition in the competitive environment. Hotel Hilton can make
use of any of these strategies in order to position itself in the market
by taking an edge over competitors. Different strategies are
illustrated below-
 Low price and low value added- This strategy involves
offering the goods and services at a low price and with low
value so that the sales can be increased. Hotel Hilton can opt
the strategy and offer its customer with such services which
have low value and at low price so that they can attract

customers.
 Low price- This strategy involves adopting the low cost
model where the services or goods are offered at low price.
Hotel Hilton can opt this strategy and provide its services in
less cost.
 Differentiation- This strategy involves bringing some high
value into the product or service so that it can be
differentiated from that of the competitors. Hotel Hilton can
use this and focus on innovation so that such service is
introduced which can attract guest.
 Hybrid- It consists of the combination of low price and
differentiation because it ensures that adding value and cost
are competitive. This strategy can be used by Hilton Hotel in
order to increase its sales.
 Focused differentiation- This strategy focuses on providing
high value to the guest at the high cost. Hotel Hilton can use
this strategy and earn profits but it is very difficult to follow
this strategy for a long time.
 Monopoly pricing- In this strategy, there is single business
that gets the power to control the price into the market.
 Risky high margins- This strategy includes offering the
services at the high price but there is no perceived value
added in it. Hotel Hilton can use the strategy and offer its
existing services to the customers at high price so that it can
generate more profits and revenue.
 Loss of market share- In the strategy, the organization seems
to take an exit from its existing market and plans to move to
other market. By adopting this strategy, hotel Hilton can take
exit from every market and shift to the new one. This may be
difficult in implementation for hotel Hilton as it is the global
chain of hotels (Martínez and Piña, 2017).

Tactics  Product- The hotel can expand its operations in new country
with its existing services so that it can attract new guests.
 Price- Hilton Hotel can adopt premium pricing in order to
attract wealthy customers in order generate high profits.
 Place- The hotel can expand its operations in North America.
 Promotion- In order to promote its new service, Hilton hotel
can use digital marketing such as email marketing, social
media to promote its new expansion (Harris, 2018).
Evaluation This plan can be evaluated by using the tool benchmarking where it
will set its target and compare the actual performance with the plan.
Strategic objectives Strategic
objectives
(SMART)
KP1 Target Action Plan
Financial Key
performance
indicator
To increase the
annual turnover
by 30%.
By attracting
new customers.
Customer Benchmarking To enhance
customer base
by 20%.
By promoting
the operations
of hotel through
social media
and digital
marketing.
Internal Process Key
performance
indicator
To bring
innovative
service in hotel.
By conducting
research to
identify the
needs of
customers and
bringing
innovation to
fulfil it.

People Benchmarking To retain the
talented
employees.
By offering
attractive
package and
rewards to
motivate them.

CONCLUSION
It is concluded from the above report that the long term plans that help the organization to
increase its sales and profitability are termed as business strategy. It is very essential for
organization to analyze its external environment so that it can make such decisions which does
not have high influence of it. The analysis can be done by using different frameworks like Pestle,
stakeholder analysis and Ansoff matrix etc. It is also essential to analyze the internal
environment by using various models like McKinsey’s 7Ss, VRIO Analysis, SWOT analysis etc.
Further it is added that Porter's 5 forces is used in order to identify and analyze the industry
analysis and it is essential for businesses to plan the strategies and it can be done by using
different frameworks like Porter's generic strategy and bowman strategic clock so that it can
grow and succeed in the competitive market.

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