Strategic Decisions in Hilton

This document discusses the strategic decisions made by Hilton Worldwide Inc. and their impact on the company's performance. It covers the competitive forces, PESTEL analysis, and recommendations for sustaining competitive advantage. The document provides insights into the complexities of business operations and the need for strategic management in today's competitive environment.

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Strategic Decisions
Hilton
Student’s Name
3/19/2019

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Executive Summary
The complexities in the business operations have developed the emerging need for the
business to involve strategic management and adopt the decisions that help the business in
sustaining its competitive advantage. Hilton Worldwide Inc. also adopts strategic decision
making to make the changes according to the external environment in which the business
operates.

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Contents
Introduction................................................................................................................................2
Background of the Company.....................................................................................................2
Current position..........................................................................................................................3
Five forces model.......................................................................................................................3
Rivalry among existing firms.................................................................................................3
Bargaining power of suppliers...............................................................................................3
The threat of substitute products............................................................................................4
Bargaining power of the buyers.............................................................................................4
The threat of new entrants......................................................................................................4
PESTEL Analysis.......................................................................................................................4
Political factor........................................................................................................................4
Economic factors....................................................................................................................5
Socio-Cultural Factors...........................................................................................................5
Technological Factor..............................................................................................................5
Environmental Factor.............................................................................................................5
Legal Factor...........................................................................................................................5
Conclusion and Recommendations............................................................................................6
References..................................................................................................................................7

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Introduction
The complexities in the today’s world have developed the emerging need for the
business to undertake various strategic and tactical management decisions that will help the
business in sustaining the competitive advantage in the complex world. One of the
internationally leading companies Hilton Worldwide Holdings Inc. hereinafter refers as
Hilton has a mission to fill the earth with the light and warmth of hospitality. The company
focuses on delivering innovative services and involves various strategic decisions that help
the company in leading its market share (Della, 2016).
The purpose of the report is to analyze the overall performance of the company and
the factors that influence the performance of the hotel. The report will cover the detail
discussion of the current performance of the company and the factors and the environment
that influences the industry (Della, 2016).
Background of the Company
Hilton hotels were founded by Conrad Hilton in the year 1919. It comprises of over
4112 hotels in 91 countries. It manages and franchises a broad portfolio of hotels and resorts.
It focuses on providing innovative services and sustains the loyal guests of the company. The
company is owned by private equity firm known as the Blackstone group. The Hilton
Corporation has diversified brand portfolio from iconic extravagance properties to the
inventive motivated-service hotel. The market share of the Hilton worldwide is extremely
high and broad and is ranked as the 38th largest corporation in the United States (Hilton,
2019).

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Current position
Hilton Corporation adopts the aggressive international business strategy and service
differentiation with the focus on quality. The company is able to sustain its competitive
advantage and has increased market share in comparison to its competitors. The Chain of
hotels under the brand focus on providing excellent services and was able to upgrade the
market share of the company. Hilton has generated approximately 8.91 billion US dollars in
revenue in the year 2018 (Hilton, 2019).
Five forces model
Porter’s five force model helps in analyzing the intensity of competition and the
profitability level of the company. It helps in analyzing the effectiveness of the operations of
the company (Dudovskiy, 2016).
Rivalry among existing firms
The intensity of competition is fierce and the hotel competes with Marriott, Sheraton,
Hyatt Regency, Radisson Blu, Renaissance, Westin, and Sofitel and other premium hotel
service chains. The company is able to increase its income as compared to its competitors
(Grunig & Kuhn, 2015).
Bargaining power of suppliers
The bargaining power of the suppliers is low because Hilton has over 4000 suppliers
and runs a supplier diversity program and purchases from diverse suppliers. There is no
supplier switching cost in case of Hilton (Grunig & Kuhn, 2015).

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The threat of substitute products
The threat of substitute product or service is high because the value proposition
offered by the other hotels can be innovative and different from the services provided by
Hilton (Dudovskiy, 2016).
Bargaining power of the buyers
The bargaining power of the buyers is high because of the high availability of
competitors and the threat of substitute products. The company focuses on building loyal
customers by providing innovative services to its customer (Dudovskiy, 2016).
The threat of new entrants
The new entrants develop innovative services and new ways of doing the things
which create pressure on the Hilton to reduce the cost and develop the innovative services for
sustaining the competitive advantage of the company. The company focuses on making the
expenditure on the research and development to analyze the best service in comparison to its
competitors (Wang & Chung, 2015).
PESTEL Analysis
PESTEL analysis is used to analyze the external macro-level factors that leave a
profound impact on the performance of the organization (Perera, 2017).
Political factor
Hilton has the vision to set in different countries and for this, the hotel has to consider
the cost of leives, the necessity of legal representation and the impact of the government is
the part of the cost to the ratio of benefit. The hotel has to analyze the taxes/ fees and the
legal hurdles of a specific place (Perera, 2017).

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Economic factors
The economic conditions of a specific country play a major role in deciding the
pricing of the services. Hotel Hilton has to consider the exchange rate, inflation rate, interest
rate and the present, past and future condition of the particular economy (Gajjar & Okumus,
2018).
Socio-Cultural Factors
The culture, lifestyle and the views of the consumer on the expenditure play a major
impact on the business performance of the hotel. The hotel focuses on making strategic
decisions based on the changing patterns of the society (Gajjar & Okumus, 2018).
Technological Factor
Changing technology directly affects the profitability of the company. Hilton focuses
on adopting the latest technology to enhance the services and provide the best experience to
its visitors. The company involves in strategic decisions to make a huge investment in the
technology that suits the best (Akhtar, 2017).
Environmental Factor
The hospitality industry in heavily criticized for impacting the environment and
harming it. Such criticism has put various regulatory restrictions that increase the operational
cost of the hotel. It develops the need for the hotel to adopt the measures that are
environment-friendly and implements the programme that encourages patrons to reuse towels
and cut down the waste from laundering (Burns & Dewhurst, 2016).
Legal Factor
The Hotel has compliance to abide by the labour laws and ensure a safe working
environment for its employees. It must also abide by the food security laws which ensure that

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there are proper protection and handling of the food. The Hotel must abide by all the
employment laws (Burns & Dewhurst, 2016).
Conclusion and Recommendations
From the above discussion, it is analyzed that Hilton Corporation is involved in taking
strategic management decisions to analyze the current business performance of the company.
It is observed that Hilton Corporation is able to expand its revenue to 8.9 billion US dollar
revenue and focuses on providing the best experience to its visitors. It is scrutinized that the
intensity of competition is fierce which creates the need to make continuous innovation in the
service and adapt the external environment changes. In order to sustain the competitive
advantage Hotel must focus on adopting the latest technology and providing the best
experience to its visitors. It must adopt the changes in the external environment to satisfy the
varying needs of the customers.

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References
Akhtar, N. A. (2017). Hotel and Retail Management: Challenges in the Customer
Service Communities. Riverside: University of California
Burns, P., & Dewhurst, J. (Eds.). (2016). Small business and entrepreneurship.
United States: Macmillan International Higher Education
Della Corte, V. (2016). The strategic environment of hotel chains. In The Routledge
Handbook of Hotel Chain Management. London: Routledge
Dudovskiy, J.(2016). Hilton porters five forces analysis. Retrieved from:
https://research-methodology.net/hilton-porters-five-forces-analysis/
Gajjar, T. & Okumus, F. (2018). Diversity management: What are the leading
hospitality and tourism companies reporting?. Journal of Hospitality
Marketing & Management, 27(8), 905-925
Grunig, R., & Kuhn, R. (2015). Global Environmental Analysis. In The Strategy
Planning Process. Heidelberg: Springer
Hilton. (2019). About us. Retrieved from: https://www.hilton.com/en/corporate/
Perera, R. (2017). The PESTEL analysis. SriLanka: Nerdynaut
Wang, Y. C., & Chung, Y. (2015). Hotel brand portfolio strategy. International
Journal of Contemporary Hospitality Management, 27(4), 561-584