Unit 43: Analyzing International Business Development at Hilton Hotel

This report provides a detailed analysis of Hilton Hotel's international business development strategies. It explores the opportunities and threats in the global environment using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors. The report delves into the theories underpinning international trade, such as Porter's Diamond Theory, product life cycle, and country similarity theory, to understand Hilton's expansion into foreign markets like Denmark. It identifies tariff and non-tariff barriers the hotel might face, discusses the role of trade blocs, and advises on import/export strategies. Furthermore, the report compares available expansion modes for Hilton Hotel, ultimately providing recommendations for successful international business development. Desklib offers this and other solved assignments for students.

International Business
Development

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY .................................................................................................................................3
Opportunities and threats in increasing global environment ..........................................................3
Organisation expansion and their operations in foreign markets:...................................................5
Present any tariff and non-tariff barriers Hilton Hotel would have to face when expanding in the
foreign market. Discuss the role of trade blocs and point out any trade blocs relevant to the
international expansion of Hilton Hotel...........................................................................................7
Advise the Hilton Hotel to determine whether it is beneficial to import or export merchandise
and/or services. Explain the key differences between the merchandise (goods) and services
import and export and their advantages and disadvantages. ...........................................................8
Disadvantages ...............................................................................................................................10
Compare and contrast the available modes for expansion for Hilton Hotel..................................10
RECOMMENDATION.................................................................................................................11
Conclusion- ..................................................................................................................................12
References......................................................................................................................................13
Books and Journals .......................................................................................................................13

INTRODUCTION
International business is a dynamic word which refers to the commerce of goods ad
services as well as it include the production and distribution of goods and services at global
level. There is need to develop the international business because it increase the revenue
demands of any country, help in decreasing the competition level and also enhance the better risk
management because it decrease the chance to depend on single market as well as international
business is very helpful in exchanging the currency etc (Gonzalez-Lopez and Bustos, 2019). the
way to enter into international market is very hard and it can be opportunity as well as threat to
the organisation because of huge competition in hospitality market. The report has chosen the
Hilton hotel for analysis of international business development. The Hilton hotel was established
in 1919 by Conrad Nicholson Hilton and the headquarter is situated in Virginia, United States is
global brand hotel which provides full service. The report data has included the pestle analysis
for better understanding the opportunities and threats for the company. The report has also
included the theory of international trade to describe the overall conditions of company as well
as it included the barrier in international trading etc (Ibragimova, 2020). it is very important to
any company and organisation to know the each and every concept to enhance the best way to
develop the business at global level.
MAIN BODY
Opportunities and threats in increasing global environment
Opportunities and threats are the part of business development in global environment and
it is developed by the change of environment. The best way to enhance the business at
international level is by understanding the opportunities and threats of any organisation by focus
on regular research (Sedej, 2019). The analysis of opportunities and threats in business
development are based on marketing principle of pestle analysis. Pestle analysis is define as the
external factors like political, economics, sociological, legal and environmental which influences
the company and organisation by enhancing the strategic decision. The various factors of pestle
analysis which access the opportunities and threats of international business related to Hilton
Hotel are as follows:
 Political factor : This factor of pestle analysis is based on the action of government
means how government influence the economy of country. The political factor includes

taxes, fiscal policy, trade tariffs and more initiatives which affect the working conditions
of company. The political factor related to government taxation policy to the particular
organisation and it will affect the organisational structure change. The world wide
development of Hilton Hotel and their growth is due to the free trade relation to another
countries. The free trade relation enhance the capacity of Hilton Hotel in exporting the
more products (LewisOscar and et. al., 2021). So political factor of pestle analysis
enhance the opportunities level of Hilton Hotel to enhance their hospitality business and
their development in international markets as well.
 Economic factor: The economic factor determine the financial conditions of any
organisation or company through their market value, export and import conditions and
many more. This factor shows direct impact on company or organisation because it is
related to the interest rates, inflation, exchange rates, and employment rates (Chauhan
and et. al., 2018). The Hilton Hotel focus on providing the high salary to their workers
and enhance the employment rate because it help in maximising the profit of by higher
potential rates. The economic factor also plays as opportunity for Hilton Hotel in
enhancing the profitability of hotel by attracting more customers through their best
services.
 Social factor: This factor in business is related to the social environment of company or
organisation and this factor focus to approach the leisure to the customers. The social
organisation include the lifestyle trends, consumer beliefs, demographics and attitudes of
each person around their working environment(He and et. al., 2020). The social factor
also focus on the best product with best service and Hilton Hotel also work on policy to
provide the best service to their customers as per their demands. The key factor which
focus on customer demands in reliable cost is function as opportunity to the Hilton
Hotel.
 Technological factor: The technological factor is based on research, automation,
development, technological infrastructure and cyber security etc. this factor help the
management of company or organisation to implication of financial transitioning by
cloud data storage. Nowadays technology plays an important role in development and
growth of any organisation and company because development of technology decrease
the time consumption and enhance the automation of products and services. Hilton Hotel

have many technologies and this hotel have invested more in field of research and
technology which help in providing the best and fast service to the customers.
Technology is boon as well as curse to the company it enhance the productivity and
work as opportunity for hotel whereas it is also work as threat to Hilton Hotel because of
fast change of technology creates obstacles in the productivity.
 Legal factor: This factor includes the rules, regulations and copyrights which focus on
product safety are comes under the legal factor. The Hilton Hotel follows the laws of
Employment Act 2010 and according to this law Hilton Hotel maintain the equality of
their employees and taking the unbiased decision in selecting the efficient employees as
well as this unbiased decision of Hilton Hotel enhance the dedication of employees
towards the hotel.
 Environmental factor: This factor includes the impact of climate change and extreme
weather events as well as also include the natural resources. It focus on environmental,
social and governance analysis and track the reporting tools which decrease the effect of
green house effects. Hilton Hotel focus on environmental factor by reducing the use of
plastics as packaging materials and promote the healthy environment. Environmental
factor is work as opportunity for hotel because Hilton Hotel develop the trust of people
by providing healthy service to the customers by providing plastic free environment.
Organisation expansion and their operations in foreign markets:
There are various factor which help the organisation in their expansion in international
markets. The expansion in foreign market is known as global expansion and it is the way to
develop the legal entity in foreign countries to set their business (Luo,, Wu, and Ding, 2022).
The various parameter plays an important role in the expansion of international market and these
parameter includes the innovative ideas, enhancement of sales revenue, multi-domestic strategy,
standardization strategies and licensing etc. the Hilton Hotel wants to expand their business in
Denmark to earn more profits and the theory on which their international trade depends are as
follows:
 Porters diamond theory: This theory is based on the competitive advantages of
economy of one nation to another nation market. This theory also provide the guide
regarding the strategies in operating and investing international markets (Mansor, and et.
al., 2019). The porter's diamond theory works on 4 model that is structure, factor

conditions, demand conditions, related and supported industry. The Hilton Hotel
expanded their market at global level under the porter's diamond theory and focus on
structure which is more suitable in Denmark by analysing the factor of pestle analysis.
The Hilton Hotel also focused on sophisticated demand of local customer and enhance
their quality and improve their productivity. Another focus of Hilton Hotel is related to
supporting industries and hotel focus on to check all the supportive industry which help
Hilton Hotel in their expansion. The supporting industries help the Hilton Hotel in
enhancing the suppliers.
 Product life cycle: This theory is define the time between the introduction of product
into market to the removal of p[product from market. This theory is categorised into 4
stages which is introduction, growth, maturity and decline(Al-Barakati, and et. al.,
2022). This cycle is very important in expansion of business because it help in decision
making of company in various field like pricing, promotion, cost cutting and many
mores. The Hilton Hotel focus on product life cycle to expand the business in foreign by
introduction of marketing campaign which enhance the awareness to the customer
regarding the goods and services provided by hotels. the Hilton Hotel focus on customer
demands and increase the production and enhance the growth of product. The 3 stage of
product life cycle is maturity and this stage directly linked with profitability of product
and services, Hilton Hotel provides the products and services at reliable rates so that it is
easily available to the customers and it shows the maturity of the Hilton Hotel in the
product life cycle.
 Country Similarity Theory: This theory focus on intra trade between countries having
similar level of development. According to this theory the product which has
manufacture by company to sell their products in domestic market also develop their
expansion of product in other country which shows similar level of development(Gam,
Bahri-Ammari and Soliman, 2022). This theory is the core principal in expansion of
market at international level because it provides similarity in per capita income and also
intra industry trade is common. This theory is very helpful in expansion of organisation
of Hilton Hotel in foreign because the hotels have permission according to this theory to
enhance their business to countries which has similar per capita income. This theory help

the Hilton Hotel to expand their organisation in Denmark because as per theory Hilton
Hotel enhance their business by best service in similar per capita income.
Present any tariff and non-tariff barriers Hilton Hotel would have to face
when expanding in the foreign market. Discuss the role of trade blocs and
point out any trade blocs relevant to the international expansion of Hilton
Hotel.
International businesses are the global businesses, which deals with the international
market. In which the dealing of goods and services, through which the tariffs or taxes which can
be applied by the government of the country. In other words, tariffs are the restrictions which can
abide by the government to raise the revenue, It can applied only in goods and services which
can be imported or exported(Huang, an et. al., 2020). The global company or organization that is
Hilton Hotel needs to study the marketing condition, while expands their business
internationally. In context to Hilton hotel various tariffs and non-tariffs barriers are given below:
Tariffs barriers Export Barriers- This is one of the most common barriers, while the company or
organisation starts the business globally. In context to Hilton Hotel, they pays the tariffs
and taxes while exports any goods or services. Hilton Hotel has the brand image into the
market, so they strictly follows the barriers which can be applied by the government. The
rules and regulations must be follows by the organisation, while spreads their business
on the another region. Import Barriers- These barriers are also imposed by the government in goods and
services. In relation to the Hilton Hotel, They pays the taxes to the government while
import any goods and services(Yu, Li, Wang and Duan, 2019). Import barriers or tariffs
are applied on the imported goods and services that may affects the pricing of the
products and leads to increases the market competition and the organization face new
challenges into the market.
Non – Tariff barriers Quotas- This is a type of a trade restriction which can sets the quantity of the goods, It
can be applied by the government. Hilton Hotel needs to pays the tariffs or taxes, If the
organisation do not follows the rules and regulations that might be face many challenges

in the new country. The particular organization can also sets the lower prices of the goods
and services to attracts the customer and also tries compete the similar organizations,
Hilton Hotel must take care of customer and to satisfy their needs and wants. Subsidies – It is considered to be payment which is given to the domestic producer which
helps them in diverse ways. In addition to this, they are likely to pay less on the foreign
imports. Whereas they could channelize the approach on the various markets. In relation
to Hilton hotel, it is growing its business in the new area. So, they are not viable to any
subsidies the company needs to pay the taxes on the goods and services to get down the
business.
Trade Blocs
Trade blocs are enforced by the countries, It is another level of international trade barriers
, which can assist in trading between two countries(Suzuki and Lan, 2021). Trade blocs have
many benefit one of their advantages is to promotes the free trade between countries without any
tariffs and taxes. In context to Hilton Hotel, they will face many situation and barriers and takes
the advantage of Trade Blocs, because the exporting and importing of the goods and services to
the other countries might be expensive.
Advise the Hilton Hotel to determine whether it is beneficial to import or
export merchandise and/or services. Explain the key differences between
the merchandise (goods) and services import and export and their
advantages and disadvantages.
The organisation needs to globalization as they can import and exports their goods and
services to full fill the needs and wants to the customer. Each and everything is not available in
the local market, due to this the global company needs to starts import and exports of the
products. Every organization should follows the rules and regulation and also the policies of the
government that can helps to apply the tariffs on the import and exports products(Rush and
Obolonkin, 2020).
Import: It is the process in which the Hilton Hotel getting the product in home to the foreign
country, Every country is not having all type of resources and also not in good to make all
products(Suanin, 2021). So, every organization including Hilton Hotel imports the goods and
services to satisfy the customer. There are many advantages of the importing are as follows-

New product into the market: It is very important part that a new product launches into the
market, It can implies or helps to generate the good revenue for the company(Goldschmidt and
Kumar, 2019) . There are many products which can not makes into the home or own country. So
they can imported by the country simultaneously and sells into the market.
Reducing Cost: Reducing Cost is also beneficial to increment the revenue and attraction of the
customer to the particular company, many organizations have analysed that if the company can
manufactures the product, so they can set the price limit high but in the case of importing any
good this can sets the prices suitable and provide good quality products and services to the
customer.
Providing high quality products: Hilton Hotel imports very high quality products for the
customer satisfaction in which the customer feel contented. It also assists them to provide better
services to the customers need not go abroad fir the products(Trick, Peoples and Ross, 2021).
Disadvantages
 One of the disadvantage is of country and currency risk as the company is dependent on
various countries. And they charge high tariff also cause risk for the country. Another disadvantage is of domestic manufacturers hit as the import can cause various
issues for the domestic manufacturers. Moreover, it is also seen that the products which
are imported from different nation are being provided in the low cost. It leads to enhance
the overall competition in the market(Yu, 2020). That is why the customers of the market
are to switch among international products which are at the position of the local market
which reduces.
Exporting- Exporting is a process in which the goods and services are selling through the
another country. The product in which the country is specialized in the market. So, the company
starts exporting the product(O'Higgins and O'Hagan, 2019). If the company is liable to
globalization (Ramos and Yilmaz, 2022). There are some advantages of exporting which can be
mentioned below:
Increase the sales potential: There are increasing the productivity of the company in which the
company more produces the goods and exports into the different nation this can increases the
potential of sales and gained all the opportunities into foreign country, the overall process can
leads the growth of the company.

Increasing profits: Increasing the profit of the company, with the help of globalization and also
exports the product into the foreign market, it can increases the productivity and market
environment and helps them to grow faster.
Disadvantages
Greater initial outlay: There is high expense involved in process of exporting the products in the
initial stage. That is why, the small companies cannot even afford to make use of exports for
their products (Rhee, 2018). And it is said to be beneficial for the big firms as they can easily
manage the high costs. Such as market research, campaigns, administrative costs, various
initiatives, travel costs will also be added. Moreover, it has also been analysed that with the aim
of exporting the products in the international market there is association of the distribution cost.
Hence, there is need of choosing the best channel which provides a connection between domestic
market and international market. Under which the middle man charges are also higher which can
also be a drawback.
Larger risk: The risk also increases with direct exporting and there are chances that the
products being exported are not favoured by the foreign clients and there are more chances of
failures too. In addition to this, it can be said that in the if fluctuations take place in the exchange
rate then it can create a major impact on the sales and profit of the company. From the above
information, it can be said that there are various advantages and disadvantages of import or
export. In relation to the Hilton Hotel, it must focus to satisfy the needs and wants of customers
in their own ways. They can also import the products in case if require.
Compare and contrast the available modes for expansion for Hilton Hotel
There are many types which can helps to growth into the business and also helps to
increment in the business which are explained below-
Exporting-It is said to the easiest way of expanding into the international market. And it is
considered to be the process of sales of goods & services mainly in the international market.
Wholly owned subsidiary- In the wholly owned subsidiary, the parent company or
organisation are owned the company in the market of international, to provides the goods and
services to the customers. This can helps to the company for better understanding and interaction
to the customer of foreign market.

Joint venture- The two parties and companies are works together in the partnership and
helps in the development of the company or organization. The partnership is done under the
vision of agreement and memorandum, both companies are works together on the growth of the
company and tried to increases the revenue of the organisation. This can handles the foreign
market very efficiently and effectively.
Licensing: License is the authority of any company, that gives by any authorization and
government. To start the production and gives the permission to the company to starts selling the
products or services on the legal bases. The company can not phase any restriction to sell their
product.
Franchising: It is a different mode of business, one company sells to the name and product to
the another company. It is similar to the joint venture because the two organization should
participated in it as franchisor and franchisee. In which the franchisor, who sell their firm to the
another company. The franchisee states their profit on the percent bases rather on the profit
bases.
RECOMMENDATION
The expansion of business in foreign market is very important for growth of any
company and business. The following steps are recommended to Hilton Hotel to enhance their
business and expand their area of business in foreign market by following steps:
 Market research: it is based on research of things which is required by Hilton Hotel. It
is based on analysis of external and internal factor which determines the merits and
demerits of specific sector. In this step Hilton Hotel should analyse the market and also
focus on industry analysis for better outcomes.
 Monitoring and control: This step is based on monitoring of regular performance of
Hilton Hotel because regular checking of performance provides better results. It also
provides basic ides to work on demerits of Hilton Hotel and effective measures are taken.
 Establish business: This step includes all the norms and regulations which help in
registration in foreign market according to rules of foreign market. The Hilton Hotel
should established their business in very effective manner and includes all the criteria
which are in favour to satisfy the customer demands.
 Create loyalty program for customers: The Hilton Hotel should start the different
programs through advertisement, better services, best quality in affordable price to gain

the the trust. Loyalty is the best way of enhancing the business in foreign market as well
as it increase the product demands and gives better outcomes.
Conclusion
In this report, there is a discussion about international business development regarding
the Hilton Hotel. The report concluded that international business development is the process in
which the company can stabilized into the foreign market. For globalization and developing the
Hilton Hotel has follow the criteria of PESTEL analysis and also discuss about the import and
export of the goods and services and their advantages and disadvantages.

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