Strategic Management Analysis of Hilton Hotel

This report provides a strategic analysis of Hilton Hotel using various frameworks such as PESTLE, Porter's Five Forces, and VRIO. It also includes Bowman's Clock, Ansoff Matrix, and SWOT analysis to identify the current strengths and weaknesses of the organization. The report suggests a focused differentiation strategy for Hilton to expand into newer regions and target a particular group in that area. The Ansoff Matrix is used to analyze and plan the strategies for growth in the market.

STRATEGIC
MANAGEMENT

Executive summary
The aim to the report is to identify the strategy that is adopted by the Hilton so that
working might be made efficient. Also, the strategic analysis had been identified through
applying the Bowman clock strategy and also the SWOT analysis had also been conducted in
this report to identify the current strength and weakness in the Hilton hotel.

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................4
SITUATIONAL ANALYSIS..........................................................................................................4
External Business Macro Environment – PESTLE Framework .................................................4
External Business Micro Environment- Porter's five Forces.......................................................5
Analysing the organization Internal environment -VRIO framework.........................................6
STRATEGIC DIRECTION ............................................................................................................8
Applying the Bowman strategy within the business....................................................................8
ANSOFF MATRIX: .................................................................................................................10
BCG MATRIX: ........................................................................................................................11
SPACE:......................................................................................................................................11
STRATEGIC FORMULATION...................................................................................................12
SWOT analysis..........................................................................................................................12
TOWS MODEL ........................................................................................................................13
STRATEGIC EVALAUTION ......................................................................................................15
Recommendations......................................................................................................................16
CONCLUSION .............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Strategic management refers to the process that helps in setting the goals, procedures and
objectives in order to make the organization more competitive in the market. This will help the
organization to allocate the resources and have the good implementation of the plan. The current
assignment is based on the Hilton Hotel of UK which is the global brand and used to provide the
full service to the customers. The report will outline the macro environment by using the
PESTLE analysis and the micro factors by using the porter's five forces. Further this report will
outline the organizational strategic direction by using the Ansoff matrix, Bowman's Clock,
SPACE and the BCG/ GE McKinsey. Furthermore, this report will also outline the strategy
formulation by using the SWOT and TOWS analysis. At last this report will evaluate the
strategic measures by using the SAF framework and it will also evaluate some recommendations
to the organization.
SITUATIONAL ANALYSIS
External Business Macro Environment – PESTLE Framework
The PESTLE analysis is the framework that helps to gain the macro picture of the
industry which includes the political, economic, social, technological, legal and environment
factors. Hilton Hotel must have the PESTLE analysis which helps the organization to identify the
challenges and helps them to expand their business. The PESTLE analysis of the organization is
described as below:
Political factors: The political factors used to determine by the government that used to
influence the economy or the particular industry. Hilton Hotels and resorts are the most popular
global hospitality chains Vyshnevskyi (2021). It has to cope up with the political factors as it is
they important for the company to have the political stability when it is operating in the various
other countries. As the cited organization is operating in the various other countries it has to
manage the political risk that is associated with the other countries.
Economic Factors: These factors includes the determinants that of the economy
performance that used to affect the organization directly or indirectly. Before having expansion
of the business the company must check the economic condition of that country. As economic
factors used to affect the hospitality industry so the cited organization must focus on these

factors. The pandemic has affected the operations of the organizations and people are doing less
expenditures.
Social factors: These factors includes the social environment of the market which
includes demographics, cultural trends, population, etc Miller (2018). The cited hotel is the well-
known in the international visitors and the social factors may affect the profitability of the
organization. Due to pandemic people used to avoid the social gatherings which affect the
revenues of the organization.
Technological Factors: In this factor, it includes the innovation and changes in the
technology that used to affect the business environment. Hilton should use the upgraded
technology which helps in improving the value propositions for its customers. By using the
online payment systems and have the card lock doors of room the organization can have changes.
Legal Factors: In this, there are certain laws and policies that used to affect the business
f the organization is operating in the more than one country. Employee law, customer law and
various other laws that should be followed by the organization in order to operate in the
competitive market Tonelli & Cristoni (2018). By this the cost of operation is increased and this
helps the hospitality to earn the profitability.
Environment Factors: These factors includes all the elements that are determined by the
surrounding environment. The organization must be sophisticated towards the protection of the
environment. The changes in the climate used to affect the profitability of the business. The best
example is COVID- 19 that has affected the profitability of the hospitality sector and also
affected the firm's revenue.
External Business Micro Environment- Porter's five Forces
In this analytical framework it has described about the five forces that helps the
organization to have competition in the market. The five forces of the model is described below:
1. Bargaining power of customers: In this force, the customers have the ability to
drive the level of performance and pieces in the market. As buyers are often
demanding and they want the services at the lower prices. The cited hospitality
must maintain the large customer base which helps them to have less bargaining
by the customers in the market David, David & David (2021). They must do the
rapid innovations which used to attract the customers towards their hospitality.

2. Bargaining power of Suppliers: The bargaining power of suppliers is affected
by the number of suppliers in the market in order to provide the best services. The
bargaining power of the suppliers is very low in the market as there are more than
4000 suppliers from which the cited organization used to purchase the gods. This
makes the firms to have consistency in providing the services to their customers.
3. Threat of new entrants: The company is also affected by the force of new
entrants in the market Guven (2020). If the organization is having the strong entry
barriers it will reduce the entrance of new entrants. Hilton has to manage the
challenges and must build the effective barriers in order to safeguard the
competitive edge.
4. Threat of substitutes: This is the situation when the new product or service used
to fulfil the needs of the customers and this used to suffer the profitability of the
organization Höglund and et.al., (2018). The threat of substitutes is very high in
this sector as there are many firms in the market. In order to reduce threat the
company must have the service oriented rather than just be product oriented. The
company must understand the needs of the customers in order to gain the
customers and profitability in the market.
5. Competitors Rivalry: In this the company use to compete in the environment
with its competitors. The rivalry among the existing firms is so high in the
hospitality sector Aithal and Aithal (2019). The company used to have healthy
competition in the market with the Marriott, Westin, Radisson Blu, etc. By this
the company has to do the lots of investment in order to compete with the firms.
The company can use the KPI's in order to compare the performance of the organization
which helps the company to manage to compete itself from the competitors. The Key
performance indicators in cited organization includes the quality of the services and products,
skills of the staff, employee engagement, etc. By focusing on these factors it will help the firm to
manage the performance of the company.
Analysing the organization Internal environment -VRIO framework
VRIO framework is the internal analysis that helps the organization to identify the
advantages and resources that used the competitive edge to the organization. This tool helps the

company to have the measurements of the success that includes the value, rarity, Imitability and
organization. The VRIO model related to the Hilton is described below:
Valuable: The value relates to the specific needs that used to drive the products and
services and the capabilities that the company provide. The Hilton must identify the value of
their products and services which helps the hospitality to know about the value. As the resources
of the company is very valuable as it helps them to gain the competitive edge in the market.
Rarity: This includes the availability of the resources and its accessibility that makes the
company to compete in the market. Rarity is important as it is mixed with the values and helps
the company to get success Alfaro and et.al. (2019).. The resources used by Hilton must be rare
as it helps the organization to have the differentiate products and services in the market. If the
company is having the less amount of the valuable and rare resources than it will have the
company to have the competitive advantage.
Imitability: As valuable and rare resources helps the company to have the better
strategies in order to have best work. By using the rare resources this will make the competitors
to imitate those resources. These resources are hard and expensive to imitate or have the
substitutes that are more valuable.
Organization: The resources used by the organization does not only create the advantage
for the company. The cited organization must effectively assemble the resources and have co-
ordination with the members of the company Varelas and Apostolopoulos (2020). Without
having the proper organization the company cannot acquire, use and monitor the resources. This
will helps the company to gain the competitive advantage in the market.

STRATEGIC DIRECTION
Applying the Bowman strategy within the business
This type of strategy clock is very effective as it helps in highlighting the best strategy
that might be used by the business so that better success might be gained in the market place.
Also, this is good as it is simple and easy to understand. Furthermore, it is having various starting
points that might be used to discuss any strategy. Also, there are eight positions that might be
used by the business and are specified as below:
Position 1: low price and value added
It is technique where the firm sells the products or services in low prices and low value
so that mass selling might be done. Furthermore, this strategy makes the least competitive areas
in the strategy clock.
Position 2: Low range

It provides the lowest cost option to the buyers in the market and also because of it the
firm has to maintain the efficiency and reduce the cost of its products to gain success against the
competitors in the market. However, surviving in such type of market is difficult as some of the
customers might like the quality of the product and hence would not like to purchase for the
same.
Position 3: Hybrid
Using this technique the firm is between the differentiation and low price so that the firm
is able to maximize each aspect while maintaining the good margins for its products in the target
market. Moreover, using this type of strategy the firm would be able to earn more amount of
revenues in the limited time frame so that it does better than the competitors.
Position 4: Differentiation
It is type of strategy where the business focus on adding the extra attribute in their
products or services so that value might be increased and also more people might be attracted for
the business (Introduction to Bowman’s Strategy Clock, 2022). Also, for this strategy to become
successful it is important that firm has unique feature in product or the services.
Position 5: Focused Differentiation
It is method where the high value products are provided at higher prices to the limited
targeted audience in the market. Also, when strategy is successfully implemented in any business
than chances of earning more revenues is higher.
Position 6: Risky high margins
The main motive of having this type of strategy is that high price is submitted in the
market without adding nay additional value to it. Also, it is best suited when buyers are ready to
pay higher prices when the brand is known in the market. Furthermore, it is usually not adopted
when the size of business is very small.
Position 7 : Monopoly pricing
It is type of strategy where the single company controls the market and dominates it
opinions on the other industry players . Also, such type of situation exist when there is lot of new
entries in the market and hence it follows the strategies that are adopted by the old business.
However, such type of monopolies are not able to run in any particular market for longer time
and hence have limited operation period.
Position 8 : Loss of market share

It is the worst position in this model and it occurs when the company loses it positions in
the market or it is declining . Also, this strategy might have been chosen because company wants
to move to newer markets or due to market unfit.
Thus, from the above bowman strategy it might be said that one that would be adopted by
Hilton would be focused differentiation where the firm would expand into newer regions for the
operations and would target particular group in that area that is ready to avail various services of
the business Keding, (2021).. Also, the major advantage of this strategy for Hilton would be that
pricing structure of the company would be improved and along with that quoted firm would be
able to identify the future customers and their specific needs so that accordingly new services
might be introduced in the market.
ANSOFF MATRIX:
This tool is used by the organization that helps them to analyse and plan their strategies in
order to grow in the market. There are basically four strategies of the Ansoff Matrix which is
described as below:
1. Market Penetration: In the market penetration strategy, the organization use its
products in the existing markets as its main aim is to increase the market share.
They also decrease the prices in order to attract the customers by increasing the
promotion and distribution efforts Rudnichenko and et.al. (2021)..
2. Product development: In the product development strategy, the company used to
develop the new product in the existing market. By doing the research and
development it helps the company to expand its products range.
3. Market Development: In the market development strategy, the organization used
to enter the new market by having its existing products. It makes the company to
expand its business in the new geographic regions, customer segments, etc. they
can also expand its business in the international market.
4. Diversification: In the diversification strategy, the organization enter the new
market by bringing the new product. This is the riskiest and had strategy as both
the market dan products are new. This strategy can help the organization to
increase their greatest potential and increase the revenues as well.

Hilton Hotel & Resort must use the market development it will help the company to
have its market in the various other geographic regions as well. As the company is already
operating the various other countries so this strategy will help the organization to grow in the
market. The cited hospitality can have the new and innovative technology in order to operate and
have the development of the company in the competitive market.
BCG MATRIX:
The BCG matrix is the tool that uses the graphical representation of the products and
services of the company in order to help the company to decide what to keep, sell and where to
invest. The BCG matrix is consisted of the four quadrants that are:
1. Low growth, High share: in this section the company is having the low growth
and the high market share.
2. High growth, High share: These are the stars that used to have the large market
share in the fast growing industry Ioannis and Belias (2020). This is required to
have the large investment by the company to have the high growth and high share
in the market.
3. High growth, low share: This used to represent that the business is having the ow
market share by having the high growth in the market. This helps the organization
to have the huge amount of the cash in order maintain and gain the market share.
4. Low share, Low growth: In this quadrant the company is having the low market
share and the low growth in the market.
SPACE:

It is the model that is used by the firm so that certain strategic choices and decisions
might be made by the firm. Also, it consist of various elements such as Strategy, Position, action
and evaluation. Moreover, it has various dimensions that allows any firm to identify
competitive advantage , financial strength , industry strength and environmental stability that
allows in making any kind of decisions in the future regarding the expansion or any other
decisions. Moreover, this model consists of various position in between such as competitive
posture that indicates the company to enhance the competitive advantage in improving the
differentiated product in the market Fedushko and et.al.. (2021). Also, the aggressive posture
indicates that company might be able to exploit all the opportunities and enhance the market
share . Furthermore, while falling in the conservative posture indicates that firm has the limited
competitive advantage but greater financial strength in the stable market . Lastly, defensive
posture is great indication to the company that is lacks both financial strength and competitive
advantage and hence lot of work need to be done.
Thus through following the above structure Hilton resort would be able to identify in
which the section it falls so than better competitive strategies might be found out . Also, the
after this top management of the company choose the best strategy that would allow the firm to
fulfil both strategic goals and long term objective of the firm. Furthermore, this SPACE model
would be good for the Hilton hotel and resort that need to find out the market positions in against
some of the top competitors.
STRATEGIC FORMULATION
SWOT analysis
Strengths
High brand recognition: It is very well-known that Hilton hotel has 13 brands that are
operating in different regions and it has served more than 140 million guests thus benefiting
from economies of scale.
Good employee retention : Hilton is also known for introducing various employee benefit
scheme due to which it has greater employee retention within the firm over the years.
Weakness
Limited market share: Though the brand is known for providing the best services but due
to its premium pricing policy it has limited market share than limits it revenues for the firm.

Operations are affected: As the firm is operating globally in various parts it often has to
face problems for m the government regarding the operations or undertaking of any activity.
Opportunities
New emerging markets: For Hilton hotel there are various markets that are undiscovered
where there are good market opportunities for earning extra revenues. Also, clear
identification of these market would allow quoted firm to have more market share in limited
time frame Tereshchenko and et.al. (2019).
Innovation in customer services: Hilton has vast opportunity of developing innovative
ways in delivering the services to the customers' so that more customers are attracted
towards the brand.
Threats
Competition: There are various competitors that are entering into the hospitality industry in
the current times. Also, because of this quoted firm revenues would be limited. Moreover, it
would create difficulties for the firm to devise better policies and strategies to sustain for
longer time.
Political disturbances: It is known that if in any country there is political conflict and
instability in government decisions than it would not allow the Hilton to successfully conduct
various business operations and also it would limit the working of the firm through
developing rigid policies and norms Yaakob and et.al. (2019). Thus, it is serious threat to
business that wants to expand and earn revenues from the higher investment areas.
Stagnated growth: There are cases where at some point of time growth of the company is
stagnated and the revenues are not able to be generated. Also, this would only hamper the
progress or growth of the company that wish to achieve the height of success in against the
competitors.
TOWS MODEL
It is model that is used for creating , comparing , deciding and accessing various business
strategies. Moreover it consists of elements such as threat, opportunities. weakness and
strengths. Thus, through using this model the following impacts would be identified that are as
follows:

Strengths Weakness
Opportunities Due to high brand recognition
the Hilton hotel had the
opportunity of expanding into
the newer marks where not
much efforts need to be put
into the marketing to make
people aware of the brand
Samad , Alghafis and Al-
Zuman, (2018).
Hilton hotel might grab the
opportunity of innovating new
services in the business but
this might be failure because
the company had the limited
market share as it targets only
premium class group. Hence,
if new innovation is not done
properly than there are chances
that firm is not able to recover
the cost of innovation.
Threats Through the company
currently have the great
employee retention at its
various hotels but this might
be threat and employees might
switch to other firms when the
quoted firm reaches the point
where the growth is stagnated
for nay of the market reason
or circumstances
Though Hilton is very well
known brand hotel but there
might be case where the
operations of the company are
affected due to any kind of
political disturbances in
another country that it is
planning to expand its
operations into. Thus, this
would only result in the losses
of the company and the
inefficient growth in the
future.
STRATEGIC EVALAUTION
SAF strategy model
Suitability:

It is most important factor as it helps in identifying whether the particular strategy is
suitable or not. Moreover, from above one strategy such as market development chosen by the
firm is suitable as it would minimise the risks of the firm in researching for the new products in
the new market Garrido-Lopez and et.al. (2018). Also, it would be benefited for the firm as it
allow the firm to position in new market through the brand image that is already developed in
other markets.
Acceptability:
This is the stage where the chosen strategy risk , benefits and stakeholder reactions
would be measured so that success might be identified easily. Also, the returns might be
measure both in financial and non financial depending on what is need of the stakeholders.
Thus, for this strategy assessment would be done through conducting cost benefit analysis so
the risks and financial losses might be measured easily.
Feasibility:
Under this stage of SAF model the financial feasibility of the market development
strategy might be assessed through forecasting and analysing the cash flows, conducting the
break even analysis and various other financial test so that it might be finally applied at the
workplace.
Thus after all these analysis positive results are expected in all these stages than the
market development would be adopted so that greater efficiency might be achieved and the
Hilton is able to attract new customers for the business.
Recommendations
 It is recommended to quoted firm been though it is opting for focused differentiation
strategy but is riskier business as lot of small hotels have been come up in market that
are providing similar services in the market at relatively lower pricers. Hence, if the firm
is not being able to provide the right innovative services due to lack of improper market
research than would only limits it growth. Hence, it should take advice form the external
agencies that would assist in the choosing the right strategy for the business.
 Moreover, it is also suggested to the Hilton that is should appoint proper marketing
agency for the business that would conduct the SWOT for the business for strategy
formulation Koloushani, Nasri and Rezaei , (2019) .Also, if the company is relying
totally on is own conducted SWOT analysis than there are chances that it miss certain

aspects that also affect the business from the eyes of the outsider. Also, relying totally on
the SWOT analysis means that strengths and weakness of the other companies that are
operating in the market are ignored. Thus, it is important that while the strategy
formulation the Hilton is looking to various other aspects either through conducting the
groups discussions of regular basis so that collective opinions might lead to better
decisions in the end.
CONCLUSION
From the above report it is concluded about the macro environment by using the PESTLE
analysis and the micro factors by using the porter's five forces. Further this report has evaluated
about the organizational strategic direction by using the Ansoff matrix, Bowman's Clock,
SPACE and the BCG/ GE McKinsey. Furthermore, this report has also described about the
strategy formulation by using the SWOT and TOWS analysis of the chosen hospitality. At last
this report has evaluated about the strategic measures by using the SAF framework and it has
also evaluated some recommendations to the organization.

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Online
Introduction to Bowman’s Strategy Clock. 2022. [Online]. Available
through:<https://getlucidity.com/strategy-resources/introduction-to-bowmans-strategy-
clock/>.