Business Strategy for Hilton Hotels: Macro and Internal Analysis

This report provides a comprehensive analysis of Hilton Hotel's business strategy, focusing on the impact of the macro environment, internal capabilities, and competitive forces. The report begins with an introduction to business strategy within the hospitality industry, specifically focusing on Hilton Hotels and Resorts. Part A delves into the macro environment using the PESTLE model, examining political, economic, social, technological, legal, and environmental factors affecting Hilton in the UK market. The internal environment is assessed using SWOT and VRIO models to identify strengths, weaknesses, opportunities, threats, and valuable, rare, inimitable, and organized resources. Porter's Five Forces model is applied to evaluate competitive forces in the market. Part B utilizes the Ansoff Matrix for strategic planning. The report concludes with a summary of findings and strategic recommendations, referencing relevant literature.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART A...........................................................................................................................................3
Applying different frameworks for analyse the impact and influence of the macro environment
on Hilton Hotel and its strategies.................................................................................................3
Examining the internal environment and capabilities of a Hilton Hotel with the help of SWOT
and VRIO Model.........................................................................................................................5
Applying Porter’s Five Forces model for evaluating the competitive forces of a the respective
market sector of Hilton Hotel......................................................................................................7
PART B............................................................................................................................................8
Applying Ansoff Matrix for interpret and devise strategic planning for Hilton Hotel,...............8
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................13
2

INTRODUCTION
Business strategy is referred to a course of action and decisions made in favour of a
respective aim or the ultimate objective to fulfil. Business strategy basically guides the
entrepreneurs or business owners for completing particular tasks attaining what is needed to be
acquired. Hospitality industry is a broad category of business and a largest field in the service
industry included several of services and businesses. Hospitality sector involves services like
lodging, accommodation, food and beverages, event planning, travel and tourism, theme parks
etc. (Gursoy, 2017). Along with it the business is involved in it are hotels, motels, restaurants,
bars, theme gardens etc. The report is acknowledging several aspects of hospitality and
development of business strategy for which Hilton hotels and resorts is selected. Hilton hotels is
a global brand providing full service hotels and resorts which was founded in 1919 by Conrad
Nicholson Hilton. The company provides accommodation and food&beverages services to
customers that are two major sectors of hospitality industry along with travel&tourism and
recreation. The company is a global organisation serving in worldwide locations but it locate in
Virginia, United States. The report covers a thorough macro factor analysis where PESTLE
models is used along with internal environment and capabilities of company are examined as
well with the help of SWOT and VRIO models. Moreover, company is competitive forces are
also evaluated for suggesting one specific strategy with the help of Ansoff Matrix and a strategic
management plan is provided at the end.
PART A
Applying different frameworks for analyse the impact and influence of the macro environment
on Hilton Hotel and its strategies.
In general macro environment is basically referring to those factors and features that are
existing in the market and in the industry affecting the company externally either in positive or
negative manner (Presenza and Petruzzelli, 2019). The Macro environment includes trends in the
GDP, inflation, monetary and fiscal policies, employment etc. In order to analyse the impact and
influence of macro environment and all the respective macro factors that belongs to the
hospitality industry in the united kingdoms and which affects Hilton hotels in either positive or
negative ways a framework is used that is PESTEL analysis. This is a strategic tool which helps
the company to understand and analyse the external factors and their potential effects on the
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long-term growth and success of business in respective marketplace. The PESTLE analysis of
Hilton Hotel for the UK market in particular is as follows:
 Political factor refers to the stability and consistency of a political party and their policies
which are issued in relation for smooth and ethical functioning of the business in the
particular region and country (Aithal and Aithal, 2016). Currently the United Kingdom is
facing in flexibility and non-predictive behaviour of the political party due to two specific
reasons that is recent initialisation of BREXIT and the outbreak of the deadliest disease
coronavirus. Both are the reasons behind an unstable political environment in the United
Kingdom which is negatively affecting not only the hospitality industry but all the
respective businesses and therefore political environment is not in favour of Hilton
Hotels.
 Economic factors and economic downturn leads to declining in overseas travel and
tourism of individuals along with National visitors as well that directly affects and
influences the turnover and profitability of a hospitality business and the hospitality
industry an adverse manners. The economic environment of the United Kingdom is also
not stable because the country is in lockdown from few months from keeping people save
from coronavirus. This is negatively impacting the whole economy and most importantly
the hospitality industry and Hilton hotels because of its long term impacts on the industry
as well as on the organisation (Roma, Panniello and Nigro, 2019).
 Social element of the Macro environment is refers and concerned with the population and
the social trends that are flourishing in the market and in the hospitality industry. The
United Kingdom is a market which incorporates a numerous International well known
and a highly influential brand which brings a advantage for Hilton Hotel as well because
of the strong and attractive goodwill and brand image of the organisation. Also the people
of UK are highly attracted towards luxury services and hospitality which also place a
positive path for the company. The negative impact of the social environment which is
going to affect Hilton hotel for the longer period is the after effects of coronavirus as now
people will ignore travelling from overseas or from National borders and which hinders
directly on the revenues and growth of company (Guzzo, Abbott and Madera, 2020).
 Technological element refers to the regular update and advancement taking place in the
technological and digital sector. This is a positive macro factor that it is actually in favour
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of the company because through digital platforms and other technological devices it
becomes easy for Hilton hotel to be connected with the world and more specifically with
their existing customers (Okumus and et. al., 2017). The digitalization offers company an
opportunity to make use of social platforms to conduct marketing activities in very less
investment and also in very small time period. Along with it also influences the revenue
of the company because now hospitality industry is making use of online platforms and
internet for sales and other booking activities making it easy for customers and increasing
their accessibility.
 Legal factor is similar two political elements and also an important source of external
impact on the performances of organisation and particular industry. The legal laws and
regulations are becoming complex and inflexible because of the recent outcomes of
BREXIT. Due the hospitality industry and Hilton hotel has to focus on two different legal
sets that is of the United Kingdom and of European union. The company is responsible
for focusing on legal laws issued by both the governments in order to be safe from any
legal charges for penalties (Radjenovic, 2018).
 Environmental element is very recently come into existence and grabs people attention
and harmful impacts of business on the society and on the natural environment of the
world. Every business organisation including Hilton hotels have to focus on their CSR
activities and other social improvements in order to be sustainable in the market and also
to contribute their part in social welfare and betterment of the environment.
Examining the internal environment and capabilities of a Hilton Hotel with the help of SWOT
and VRIO Model.
The internal environment of an organisation is defined as micro environment and
includes those factors which are easily manipulated and controlled by the business according to
the objectives and strategies. For analysing the internal environment and identifying the
capabilities of Hilton Hotel a SWOT analysis framework and VRIO model is used which are
present underneath (Turner and et. al., 2017).
SWOT ANALYSIS OF HILTON HOTEL:
Strengths Weakness
 Brand image of Hilton Hotel is
continuously increasing over the years
 Debt levels is one of the potential
weaknesses of Hilton Hotel as the
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with numerous awards received by the
company for their best services and
quality portfolio (Mak and Chang,
2019).
 Loyal customers base is another very
important and strengthening factor for
Hilton Hotel as the organization have
over millions of loyal customers
belonging to Hilton’s loyalty
membership program worldwide.
 Global presence of company is also
another strength as the organization is
accessible to people and targeted
customers for every style.
company is more reliable on death
investments rather than holding
appropriate amount of equity to pay of
those debts.
 Little global market share is another
weakness of Hilton Hotel as the
company instead of having a large
portfolio of brands holds very little in
global market which is causing a huge
weakness for the organization (Boella
and Goss-Turner, 2019).
 Inflexibility is the lowering point of
Hilton because of its larger size it is
very difficult for the company to be
flexible and adapt appropriately
according to the market and situations.
Opportunities Threats
 Formation of strategic alliances is
the biggest opportunity which is in
front of Hilton Hotel my looking at it's
tiny global market share and inflexible
nature (D’Annunzio-Green, 2018).
 BREXIT and Coronavirus are the
two most dangerous and influential
threats that are being faced by the
United Kingdom and businesses in the
economy including Hilton Hotels.
VRIO ANALYSIS OF HILTON HOTEL:
RESOURCES VALUEABLE RARE INIMITABLE ORGANISED
Loyal
Customers
Loyal
Customers
- - -
Brand Image Brand Image Brand Image - -
Supply Chain Supply Chain Supply Chain Supply Chain -
Employees/
Workforce
Employees/
Workforce
Employees/
Workforce
Employees/
Workforce
Employees/
Workforce
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 Valuable resource of Hilton Hotel is there loyal customers, brand image, supply chain
and Employees. The customers and their loyalty cannot be imitated or organised it is rare
and valuable for the firm. But the other three resources are valuable but they also lies in
other standards as well.
 Rare resources of Hilton Hotel are there brand image, supply chain and employees
because it is not easy for every organisation to copy undeveloped exact same brand image
because of the unique offerings and separate portfolio (Moscardo, 2019).
 Inimitable resources are the employees and the supply chain of the organisation because
every individual is different and their abilities are unique which cannot be imitated
copied. Along with it the supply chain is also in in the table because if the differences in
the operations of companies.
 Organised resource of the company is the workforce and personnel’s associated with the
firm because of the efforts and investment made by Hilton hotel in grooming and training
sessions of individuals and improving their competencies (Atrash, 2018).
Applying Porter’s Five Forces model for evaluating the competitive forces of a the respective
market sector of Hilton Hotel.
The porter's five forces model is applied for understanding and evaluating the
competitive forces that are existing and affecting the business of Hilton hotels in particularly
United Kingdom market of the hospitality sector. The model focuses over five areas and
competitive forces which can bring you challenges in front of company and its operations. The
analysis of these competitive forces are mentioned and elaborated below:
 Threat of news entrant is the foremost thread that can be faced by every kind of
organisation. Hilton Hotel has moderate impact of this competitive force because of its
size and its unique portfolio. The company deals on worldwide basis and on a very large
scale which makes it a moderate threat. But the increasing decline in entry barrier in
hospitality industry it can become a major threat in long term for Hilton Hotel (Buhalis
and Sinarta, 2019).
 Threat of substitute products is high in relation with Hilton hotels because if the
product or any service is matching which the customer needs and their satisfaction level it
can affect the company and its profitability can suffer due to it. The threat of substitute
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goods and services is relevant and increasing day by day as the competitors are also
becoming aggressive as well (Oskam, Dekker and Wiegerink, 2017).
 Bargaining power of suppliers is not a big threat for Hilton hotels because of various
reasons out of which the foremost is its efficient supply chain and multiple supplier’s
connection. The hospitality organisation is not dependent on one particular supplier or on
small group of suppliers because of its worldwide nature and its large scale it has
numerous suppliers which provides it higher power than them.
 Bargaining Power of customers is a very potential competitive force holding moderate
impact on the company because the consumers are the ultimate sources of company to be
successful and to be profitable also in order to sustain for the longer period of time in the
marketplace. The bargaining power of customers is comparatively high and it can be
managed by building a large customer base and offering innovative and creative products
which attracts consumers and makes them loyal towards the brand (Kaliappen and
Hilman, 2017).
 Existing rivalry is one potential threat that is holding high power over Hilton hotels as
there are large numbers of competitors available in the market who are aggressively
working according to the dynamic environment and bringing use competition for the
firm. Hilton Hotel can reduce the power off of arbitrators by regularly building
sustainable differentiation also company can collaborate with competitors that will help it
to increase its market size and competition as well.
PART B
Applying Ansoff Matrix for interpret and devise strategic planning for Hilton Hotel,
ANSOFF MATRIX:
The Ansoff matrix is also known as growth matrix which of these organisations a simple
and very useful way or strategy to think in relation with their success and growth in the particular
market and in the respective industry (Melissen and Sauer, 2018). The Ansoff matrix has four
possible growth strategies or 4 specific areas out of which company can focus over one or two
strategies in order to enhance their growth and become more successful. These four strategies are
explained below in relation with the risk associated with them for adopting one specific strategy
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in favour of Hilton Hotel according to its internal capabilities and the external environment in
which the company is dealing.
 Market Development is the first strategy of ansoff growth matrix which suggest and
states that the company should remain in the existing marketplace with their existing
product portfolio but enhance their marketing activities for attracting new customer base.
In other words the products and the market remains the same but the marketing strategy
of company evolves according to the market and the current trend so that new people can
be attracted (KENYON and HACK, 2020). The risk involved in market penetration
strategy is of failure as an innovative and creating pathway is adopted which is risky and
resource consuming.
 Product Development is second strategy stating that the organisation should remain in
their existing market amongst their existing customer base but the offerings should be
evolved and a company should bring in a new innovative product or service for the
existing customer base. This is a potential strategy for Hilton Hotel as the company made
use of it in the past as well but according to the current fluctuating social trends it is very
difficult to identify an appropriate offering for the customers. This factor increases is the
risk for the company (Dębski, Górska-Warsewicz and Skalska, 2019).
 Market Development strategy of growth matrix suggest that the form should move into
new competitive market with their existing offerings and specifically in those there the
need and demand of such offerings is high. This is a prominent and significant market
strategy for Hilton Hotel according to its opportunities available. Along with it a
weakness of Hilton hotel is its market share which is also can be converted into its
strength with the help of market development strategy. The risk factor associated with
market development strategy is of unfamiliar market trends and social trends which can
be reduced with the help of local alliances with other competitors (González-Moreno,
Diaz-Garcia and Saez-Martinez, 2016).
 Diversification is the last strategy of growth Matrix suggesting that the company should
move into an entirely new marketplace with an entirely new product offering which do
not exist in the market and which is highly needed by the people. the diversification
strategy is currently not suitable for Hilton Hotel according to the world's situation there
the whole world is facing the outcomes and negative impacts of coronavirus. Therefore in
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such scenarios where all the economy is are suffering it is very harmful and risk for
Hilton hotel to diversify and move into an entirely new market place with an entirely new
product.
STRATEGIC MANAGEMENT PLAN:
 Executive Summary
Strategic plan is describe the as a process which is used for communicating appropriately
and suitable in order to accomplish the goals and objectives in the respective period of time. the
current strategic plan is developed in context of Hilton Hotel with the help of above scenario and
analysis of the macro and micro environment of company along with identifying its capabilities
and external opportunities available to it (Michopoulou and Moisa, 2019). Hilton Hotel is a
worldwide hospitality chain which was founded in 1919, quarter in United States and refers to
almost all large markets in the world. Hilton Hotel is a chain which focuses over providing all
luxury and best quality services to its customers making them satisfied and also gaining their
trust and loyalty towards the brand.
 Vision
The vision statement of Hilton Hotel highlights the name of the company of providing the
appropriate meaning of hospitality to all the people with the light and warmth experiences and
quality of services they provide to customers along with other stakeholders of the company
associated with it.
 Mission
The mission statement of Hilton Hotel specifically highlights the aim of company to
become the leader in the market and the first choice of the customers, employees and investors as
well (Fowowe, 2019). The company is passionate about delivering exceptional services and
experiences to all the guest visiting the hotels and resorts.
 Objectives
◦ To increase market share by 10% in the next 12 months.
◦ To induce sales and revenue units by 6% in the coming year.
◦ To enhance profitability by 8% to 10% in coming one years period.
 Strategy
From the above analysis of all the external and internal environmental factors of Hilton
Hotel with the help of all the appropriate frameworks such as PESTLE, SWOT, VRIO, Porter’s
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Five Forces and Ansoff Analysis the most suitable and suggestible strategy for Hilton Hotel is of
market development (Ginesta, 2017). The risk factor associated with this growth strategy is very
low as company can make use of potential alliances to enter the market in order to reduce the
risk of unfamiliarity with the marketplace. Because once a partnership is made with other
domestic business it becomes easy for Hilton hotel to make use of knowledge and research for its
business along with it Hilton Hotel also reduces its competitor and enhances its market size. This
makes it very potential for the company to adopt market it development strategy rather than other
three strategies suggested in the Ansoff growth Matrix (Skobkin, Miloradov and Kovaltchuk,
2020).
 Evaluation
The vital and the most appropriate evaluation process for Hilton Hotel to identify its
growth and to understand the enhancement in its performance is of comparing its actual
performances with the desired one. The comparison of performances will allow the company to
take appropriate decisions for future and also helps in identifying the lacking areas which require
improvement and betterment for future success and growth. The comparison between actual and
desired performances also help Hilton hotel in implementing the plan in the better manner and in
the most efficient way so that complete do not lack in any area and id8 extra focus on those in
which it needs improvements (Walsh and Dodds, 2017).
CONCLUSION
From the above analysis and evaluation in the report it is concluded and acknowledged
that hospitality business is the most crucial and competitive field. The company needs to focus in
all the directions in order to develop a successful strategy and make improvisation in its
performances. The Macro environment is studied of the organisation with the help of PESTEL
analysis in which it is identified that political, economic and social are not in favour of company
which can affect its growth and success. The SWOT analysis is applied for identifying the
internal capabilities of organisation along with photos five forces is also implemented for
identifying the potential threats and competitive forces exist and for which company needs to be
very careful. at the end a strategic plan is developed where Ansoff matrix is used to identify an
appropriate strategy for the company according to the internal and external analysis conducted
and according to the market scenario in which currently the organisation is dealing.
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