Strategic Hospitality Management (Distinction Criteria)

This report discusses strategic hospitality management in the context of Hilton, covering theories of strategic management, cross-cultural challenges, VRIO analysis, STEEP analysis, and Ansoff Matrix growth options. It also explores corporate, operational, and business strategies, as well as Porter's generic strategies.

Strategic Hospitality
Management

Table of Contents
INTRODUCTION..............................................................................................................................3
...........................................................................................................................................................3
Operational and Organisation Context...............................................................................................3
Theories of the strategic management within hospitality organisations.......................................3
Cross cultural challenges faced by the hospitality industry..........................................................5
Analysis of Internal environment Through the VRIO framework...............................................5
Analysis of External environment in context of the hospitality organisations..............................7
Strategic choices and Implementation section...................................................................................8
Difference between corporate, Operational and business strategies.............................................8
Generic strategies for the hospitality businesses...........................................................................8
Growth options for the hospitality organisation using the Ansoff Matrix....................................9
Evaluation of the options ................................................................................................................10
Suitability ...................................................................................................................................10
Feasibility....................................................................................................................................10
Acceptability...............................................................................................................................10
Global...............................................................................................................................................11
Global vs. International strategy..................................................................................................11
Sustainability concept in relation to hospitality industry ...........................................................11
CONCLUSION ...............................................................................................................................11
REFERENCES.................................................................................................................................13

INTRODUCTION
In business, strategy is defined as an action used by the company's manager to attain the
organizational goals of objectives. It is considered as a general direction which is set with the
purpose to accomplish a desired set of the outcomes in future. A proper strategic planning
procedure is required to generate an effective strategy (Busulwa, Pickering and Mao, 2022). In
order to develop a perfect and suitable strategy, organization uses certain effective approaches
including Mintzebrg's 5 ps which cover planning, patterning, ploying, positioning and
perspectives. For a strategy formulation. Organization chosen in this report is Hilton that deal in
hospitality sector. This report will be discussed regarding strategic management within hospitality
industry in UK. This report will cover creation and implementation of mission, values, goals and
objectives which are emphasized in chosen industry to improve the organizational status. A
strategy can be formulated at functional, corporate and operational level. Therefore, this report
will be based on theories of the strategic management in hospitality organization which facilitate
the competitive benefits. further this report will include cross cultural challenges faced by
business, business framework including VRIO, Steep, Ansoff Growth strategies, Porter's generic
strategies and so on.
Operational and Organisation Context
Theories of the strategic management within hospitality organisations
Every organisation follow various theories related to the strategic management as by
undertaking these theories a business can gain competitive advantages. For instance, Hilton is a
multinational luxury hotel. It is situated within UK. It is a well known reputed hotel across world
wide as it has establish a leading position within hospitality industry. Therefore, strategic
management theories enable the Hilton to enhance its operational efficiency and also ensure an
optimum utilisation of the available resources including human capital, technology and other
equipment. In context of the Hilton there are few theories of the strategic management, mentioned
below:
 Profit maximisation theory – It is a basic theory of the strategic management that an
organisation adopt with the purpose to earn extra profit. Business follow this theory as it
enable them to reduce their production cost and charge differentiated prices to deliver a

quality services (Büyüközkan, Feyzioğlu and Havle, 2019). Respective theory facilitate a
business by ensuring a long term profitability. Hilton has implement various principle of
the strategic management as it ensure an increment within Hilton's profit and revenue.
Respective hotel has been operating its business since last many years and has also earned
a satisfactory revenue. Its corporate director is providing direction to this hotel towards
development by following profit maximisation theory that deliver a quality service while
maintaining a low operational cost with the superspecies to earn more profit.
 Human resources- Based theory- respective theory is mainly emphasise the human
resources and consider the component including organisational culture, motivation,
positive working environmental requirements and needs of the human resource (Cho and
et. al., 2019). This theory is concern for increasing employee's productivity by ensuring
their workers satisfaction so as to facilitate a long term profitability of the business. In
relation to the Hilton, a large number of the employees work here, so respective hotel is
required to create a healthy and positive environment for its hotel personnel which consist
of the accommodation staff, room manager, restaurant staff and other like reception, ticket
booking staff, pantry etc. to attain high level of productivity in the operational cost.
 Competition based theory- It is another effective theory of the strategic management that
mainly focus on the profit maximization of a business by developing sustainable
competitive advantages so that business can overcome the competition within chosen
industry. competition based theory facilitate an organisation in analysing degree of the
competition within marketplace and making effective decision based on identification of
the competitors and level of competition at all the level including corporate, local,
individual, national and international (González-Torres, Pelechano-Barahona and García-
Muiña, 2019). Business organisation can get various competitive benefit based on their
internal resources, revenues, competencies and many more. In relation to the Hilton,
respective hotel has many rivals operation their business in same industry. Marriott is a
biggest competitor of Hilton in this world. Therefore, chosen hotel need to become capable
to compete with its rivals by analysing their strategies. It help the Hilton to face the
competition in effective manner. Hilton has skilful and talented workforce by which
respective hotel can deal with its client as its staff is able to understand the client's
requirement and serve them accordingly.

Cross cultural challenges faced by the hospitality industry
In hospitality industry, multiple business organisations have to face the challenges related
to cross culture. These challenges arise by working together of the different culture in chin these
different culture may create conflict. (Hervie, and et. al., 2021). Therefore, in relation to the
Hilton, challenges of the cross cultural are discussed below:
 Communication challenges- As Hilton is operating across the world wide, so with its
different chain, employees and management may have an issue of communication due to
the different communication style. Thus the language barriers is a major challenge that
may faced by the respective organisation whet dealing within the international customers
in foreign.
 Difference in decision making- As different culture has different innovative perspective
related to the business decision that can lead to a conflict between management of the
different hotels chain. Different culture value and decision making style may lead the
organisation competing itself and also pose a challenges to the Hilton in the attainment of
its goals of its chain situated in another nations.
 Patronising- As Hilton is situated in various nation and its employees also working in to
different countries so it also pose a challenges to the respective organisation of patronising
of workers toward working their own nation objectives due to which they avoid the
organisational goals. For instance if it face an international boycott in Lhasa Tibet due to
operating it hotel as it was a PR coup for another government.
Analysis of Internal environment Through the VRIO framework
In business, VRIO analysis is that framework which provides the strategic planing through
evaluating internal competencies of the organisational resources ( Köseoglu and et. al., 2019). It
involve analysis of resources in order to facilitate the competitive benefits to a business
organisation. In relation to the Hilton Hotel, its VRIO analysis is discussed below:
Resources Value Rare Imitation Organisation Competitive
advantages
Effective
implementatio
Yes, because
without the
No, because
mostly
Competitors
can imitate it On of the best
Digital
strategy is very

n of the digital
strategy
comprehensive
digital
strategies it is
not easy to
compete in
market
organisation
are investing
in the
digitalizing
operations.
very easily Leading
players within
the hospitality
industry
critical within
industry,but
can not
provide any
sustainable
competitive
advantages.
Talent to
manage the
legal
obligation
efficiently
Yes No Competitors
can imitate it
very easily
Yes Not a critical
factor
Brand
positioning as
compared to
other rivals
Yes No Rivals can
imitate, but
will required a
big marking
budget
Yes, company
has positioned
their brand
based on the
customer
behaviour
Only
temporary
completive
benefits
Access to the
critical raw
material for a
successful
execution
Yes Yes, because
other rivals
have to come
to term with
organisational
dominant
market
position
Competitors
can imitate it
very easily
Yes Providing a
sustainable
completive
advantages
Channel
management
and sales force
Yes No Rivals can
imitate it
Still lot of the
potential to
exploit
excellent sales
Providing a
sustainable
competitive

force. benefits.
Analysis of External environment in context of the hospitality organisations
In hospitality industry, analysis of the external environment can be done by using STEEP
framework which is undertake by the organisation with the purpose to analyse impact of the
positive and negative environmental element so that they can take corrective measures in order to
improve their business performance (Koseoglu and et. al., 2022). Here, STEEP analysis will be
explained in relation to the hotel Savoy which is a luxury hotel within London.
 Social- As Savoy is a s star hotel, social elements like customer's education level, health
and safety, living standard impact performance and decision making of the respective hotel
in a positive manner as it drive its business strategies as per the social trends and market
dynamics. Respective organisation mainly focus on the high income group individuals due
to its luxuries brand name.
 Technological- The technological factors have a positive impact on the Savoy as
respective organisation take use of the technology for payment and other services. Savoy
has invested a big amount into the research and development to expand it business within
international market through an effective utilisation of the technology and also
empowering its supply chain well.
 Economical - These components are include change in the interest rate, impact of the
inflation rate that may impact prices of the hotel package of Savoy. This factors also
impact payment of the salaries to employees due to a change in the inflation rate.
Pandemic has bring down the economic growth within UK also due to which Savoy had
fire various employee (McCartney and McCartney, 2020).
 Environmental- Savoy is leaving an affirmative impact on environment as it has adopted
the environmental friendly practices in its hotel. Savoy committed to reducing the
environmental impact through a better efficiencies of energy and water and reducing
waster and packaging.
 Political- In this, it include Brexit, policies, government restriction on the hotels due to the
pandemic. These factors had disrupted operation of the Savoy in term of the finance and
operation. This element had also led to the ineffective implementation of business
strategies due to adverse impact of the political factors.

Strategic choices and Implementation section
Difference between corporate, Operational and business strategies
The corporate strategies mainly include the upper level level strategies which are concern
with creating value and capturing a larger market share for the organisation. In this, top
management formulate strategies by paying more attention on business growth and profitability
(Park, Chae and Kwon, 2018). Business strategies emphasis on competing with other
organisation operating within same industry in marketplace. These strategies are discussed by the
business level manager i.e. divisional manager. Whereas operation strategies are mainly
controlled by business strategies and involve the functional strategies such as strategies for
information technology, marketing, finance, HR and sales. They have a vertical relationship with
the corporate/business strategy.
For instance corporate strategies of the Hilton will be formulated by company's top
management at its headquartered whereas business strategy will be deicide by company's
divisional or branch manager for its different hotel and resorts within other nation and operational
level strategies are decided by organisational operational manager.
Generic strategies for the hospitality businesses
The porter's generic strategies are used by the organisation to determine their pricing
strategies. It include four pricing strategies. In context of the Hilton, these four pricing strategy are
mentioned below:
 Cost leadership strategy- This pricing strategy suggest the organisation to lower their
product cost while maintaining average industry product's price in order to get large
market share within industry by win over their competitors (Phillips and Zigan, 2019).
Companies with this strategy are capable to get a substantial capital investment at their
disposal and also ensure a low cost in term of the material and labour. In relation to the
Hilton, it is a multinational luxury hotel so respective hotel does not required for such
strategy.

 Differentiation strategy- In organisation this strategy, encourage the company to add
certain unique feature in their products and service offered in order to make them more
exclusively and attractive that distinguish them into the market. In relation to the Hilton, it
offer various luxury services in its hotel that could not provided by every hotel.
 Focus strategy- It state the organisation to focus on their target niche market by clearly
understanding dynamic of their target audience to offer their product to customer. It cam
be differentiation or cost focus. In cost focused chosen market, company offer a lowest
price and in differentiation, firm offer a differentiated price along with few unique features
in their product.
In relation to Hilton, it has adopted the differentiation pricing strategy in which it provide different
services including, accommodation, hotel, bars, restaurants and many more.
Growth options for the hospitality organisation using the Ansoff Matrix
It is considered as a growth matrix strategy which is used by the business identify a best
possible strategy for their business. Here, this matrix will be discussed in context of the Premier
Inn which is UK based hotel having 800 hotel with 72000 rooms.
 Product development- This strategy state the organisation to introduce their new product
within existing market so that a large customer base can be develop in exiting market
through an effective research and development (Shah and et. al., 2019). Premier Inn can
follow this growth strategy by launching any new resort, sauna and spa within its hotel
chain and in existing UK market.
 Market development -It mainly emphasis on introduction of the existing product in a new
market including international and domestic expansion by catering to the different buyers
segment. Premier Inn a its presences in international market also including, Qatar,
Germany, Jersey and many more. So this growth strategy would be very beneficial for the
respective hotel if it introduce its new product within domestic or international market
area.
 Market penetration- It emphasises to introduce an existing product within existing
market area with the purpose to develop the customer base in similar market by increasing
the market efforts and winning over the rival in same market. Premier Inn already
operation into many nation so this organisation does not need to adopt this strategy.

 Diversification- This growth strategy is very risky as in this, a company introduce new
product within new market with the purpose of product development and market
development. Premier Inn should not follow this strategy as it is completely risky due to
which company may suffer form heavy loss.
it is suggested to Primer Inn that they should adopt the growth strategy of product development for
its business expansion by launching any new resort and spa in it hotel. It will help them to gain
attention of new customers and also enhance their market share within existing market.
Evaluation of the options
Suitability
The suggested pricing strategy (differentiation strategy) is considered as suitable for Hilton
as it offer luxurious s differentiated services at a premium pricing. Whereas, in growth strategy
product development strategy will be suitable as it is not risky and also provide an opportunity to
increase customer base and market share.
Feasibility
Differentiation strategy is considered as feasible for Hilton as it has a strong presence in
international market. On the other hand, the in growth strategy Product development is adapted by
the Primer Inn as it provide opportunities to the hotel and not so risky.
Acceptability
For Hilton, it will be very convenient to accept the differentiation pricing strategy as it
make enable the organisation to invest in research and development department. The product
development is also consider convenient for Primer Inn which also require an investment in R&D
department in order to launch new product into market.

Global
Global vs. International strategy
When it comes about the international strategy, then it has smaller scope for a business
expansion which include merely two or three nation. Whereas a global strategy contain wider
scope in which strategy formulation take place in global level which is worldwide expansion of a
business's scale of organisation. International strategy include the tactics adopted by different
nation specific to a market of those nations when global strategy include the strategic plan for
entire global market (Wut, Xu, and Wong, 2021).
For instance Premier Inn hotel is operating its business in a small scale through applying
international strategy with the international presence within limited nations like Germany, Jersey,
China and many more. Whereas Hilton has adopted the global strategy and performing is activities
over 100 nations across the globe.
Sustainability concept in relation to hospitality industry
Sustainability means meeting of the personal needs or requirements without compromising
needs of the upcoming generation. Sustainability does not include any environmental concern but
it is concern with the social and economic part of a business. In hospitality sector sustainability
play a crucial role as it create positive impacts of business operation on external environment. It is
responsibility of the hospitality organisation that they preserve the natural and cultural resources
in order to ensure a compliance with sustainability.
In relation to the Four season hotel, it ensure the sustainability within its restaurants by
recycling the plastic straws and also reduce the food wastes. It has eliminated all the endangered
species for their food menu. This hotel ensure a dean dining and a recyclable coffee disposal.
Apart form this, respective hotel also ensure saving of energy by exploiting a string regularly
utility consumption monitoring system which facilitate a minimum consumption of the energy.
Hence, hospitality organisation can meet the requirement of sustainability by adopting suitable
and appropriate measures.
CONCLUSION
Form the above report it is concluded that in hospitality industry, organisation should
develop an appropriate pricing and growth strategy in order to attain their organisational goals.

From the strategic management's theories, it is analysed that competition based theory aid the
business in gaining the competitive benefits in specific industry by strengthening their internal
resources. Organisations should analyse their external and internal environment to improve
business operational performance and remove impact of adverse environmental elements. For this,
it is recommended to the organisation to conduct certain framework like VRIO, STEEP and other
etc. it is identified that market penetration is less risky in relation to the hospitality industry. They
must adopt the environmental friendly practices in order to ensure sustainability in effective and
efficient manner.

REFERENCES
Books and Journals
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literature: Applying machine learning and traditional statistics. International Journal of
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hospitality and leisure businesses: A conceptual framework.
Shah, H.A. and et. al., 2019. Promoting strategic performance through strategic orientation and
strategic renewal: a moderated mediation model. Management Decision.
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