Strategic Planning for Hilton Hotel in the Hospitality Industry

This report provides a comprehensive strategic planning analysis for Hilton Hotel, a subsidiary of Hilton Hotel & Resort. It begins with an introduction to strategic planning, outlining the process of setting objectives and goals. The report then explores Hilton's strategic direction, including its mission, vision, values, and culture. Porter's Five Forces model is applied to assess the competitive environment, examining the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and industry rivalry. The report also conducts an internal and external environmental analysis, utilizing SWOT and PESTLE analyses to identify strengths, weaknesses, opportunities, and threats, as well as political, economic, social, technological, legal, and environmental factors. Finally, the report discusses strategic options such as franchising, mergers and acquisitions, management contracts, and joint ventures, concluding that franchising is a suitable option for Hilton's expansion. The report references key academic sources to support its analysis.

Strategic Planning for the
Hospitality Industry - 14

Table of Content
 Introduction
 Strategic direction
 Porters five forces model
 Internal & external environmental factors
 Conclusion
 References

Introduction
Strategic planning is an organised, long
and expensive process for evaluating the
current tasks of association, setting
objectives and goals in order to achieve
as well as programmes and activities to
achieve them. This assessment selects
Hilton Hotel London which is known
subsidiary hotel of Hilton Hotel &
Resort.

Strategic direction
• Mission: To become the most accommodating organisation in the world
by providing memorable experiences for visitors, meaningful resources for
teammates, monetary quality for owners and a positive influence in our
communities.
• Vision: To fill the world with the warmth and comfort of hospitality by
providing outstanding experiences to every hotel, every visitor, and every
moment.

Continue...• Value: Hilton's Company is focused on six key values such as
hospitality, integrity, leadership, teamwork, ownership and current
requirement of guest and market. Hilton Hotel focused on these things to
generate their brand value in the customer’s mind.
• Culture: Hilton leads culture and is deeply dedicated to making the best
work around the world. It focuses on building a better environment to
work for all members of our team hotel.

Porters five forces model
• Bargaining power of buyers
• Bargaining power of suppliers
• Threat of new entrants
• Threat of substitute products & services
• Rivalry firms

15/09/20

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• Bargaining power of buyers: In the case of Hilton Hotel, the bargaining
power of the buyers is low. The number of vendors in the field wherein
Hilton works is much higher than the number of companies manufacturing
the goods
• Bargaining power of suppliers: The bargaining power of Hilton's
suppliers is low. Hilton buys from the more than 4000 suppliers
worldwide and the negotiating power of most distributors is poor because
of lack of differentiation of goods and services offered.

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• Threat of new entrants: In context of Hilton Hotel, threat of new entrants is
low. The economy of scale is relatively difficult to accomplish in the field in
which Hilton works. This makes it much easier for all those generating large
capacity to provide a competitive advantage.
• Threat of substitute products & services: The threat of substituting goods or
services in the hospitality sector is not relevant. The direct replacements for
living in Hilton hotels involve people are staying in relatives 'and families'
homes and individuals leasing rooms for a limited period (Porter, 2020).

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Threat of substitution: Threat of substitution is related to existing or
potential products. substitution is related to availability of similar quality
products at lower prices or better value or better performance perceived by
customers.
Bargaining power of buyers: In case of Park plaza the bargaining power of
buyers is high as there are lot of other options that are offering concentrated
options to this segment of customers. enterprise.

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Bargaining power of suppliers: in case of hotel industry the supplier
that exercise power includes organisation that posses experienced
trained personnel that is in high demand.
Industrial rivalry: Park plaza is a established brand since 1997 and this
has lead to established brand name with the help of their sister brands
such as Park Inn and in year 2019 it is owned by Radisson hotel group
that is leading to achievement of a high competitive advantage

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Rivalry: The competition between established companies in the premium
segment of the hotel industry is moderate. Hilton Hotels faces competition in
the world market with Marriott, Radisson Blu, Sheraton, Hyatt
Regency Renaissance, Westin, Sofitel and other upscale hotel chain divisions.
As a result of substantial investing in variety facets of service provision over
the last few years, Hilton has experienced higher sales growth relative to
competition.

Internal & external environmental factors
SWOT analysis:
Strength:
•Comprehensive property portfolio
•Strong business history
•Successful loyalty program
•Variety of rooms as per customer requirement

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Weakness:
• Over-dependence on US market
• Limited presence in Asia Pacific Region
• High level of debt is weakness of Hiltion Hotels
Opportunity:
• With the opportunity of international expansion Hiltion Hotel can assure
more profitability.
• Mid-level affordable section expansion
• Focusing on research and development

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Threats:
• Threat of terrorism and political instability
• Adverse changes in macroeconomic climate
• Changes in test of customer is major threat which is facing by Hiltion
Hotel.
• Ethics-related issues in Hilton hotels

External analysis
PESTLE ANALYSIS:
• Political
• Economic
• Social
• Technological
• Legal
• Environment

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• Political factor: Political stability is most important and does matter the
industry company is performing because it is a basic requirement for success.
In context of hotel industry, number of visitors, including tourists and business
travellers, can be affected by political factors in both various ways.
• Economic factor: The domestic and international macro-economic state of
affairs and events are key factors impacting the industry of Hilton Hotels &
Resorts.

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• Social factor: The culture and tradition of society and its way of doing business
have an influence on culture of an entity in the environment. Population plays a
major role with how marketers at Hilton Hotel will understand the design the
marketing message and how they should design a business model for consumers in
the hospitality industry.
• Technological factor: Technology is quickly transforming diverse industries
around the board. Hospitality industry is a good case to highlight this point. Over
the few years, the industry has been changing very rapidly, not even allowing the
existing players the opportunity to adapt to the changing environment.

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Environmental factor: Factors such as climate, weather, environmental acts as
a carbon act, waste management legislation and so many more. The
positioning of hotel in different countries has an influence on the picture, and
the hotel environment plays a key role in controlling the quality of services.
Legal factor: This portion considers a range of regulations and laws
establishment of the national authority. In Hilton London, the administration
finds the law on equality, the law on prejudice, the legislation on health &
welfare and the law on consumer rights.

Strategic options
Franchising: Franchise is a means of selling products or services including a
franchisee that creates a trademark of a brand and a commercial center, and a
franchisee that pays royalties and sometimes an initial fee for freedom to do
business in the name and structure of a franchise owner (Okumus and et.al, 2019).
Mergers and acquisitions: The M&A technique is to use the mergers and
acquisitions system to grow the business. This applies to the services that
organisation can provide, as well as the customers, sectors and geographical
regions that they target and represent.

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• Management contracts: This is an arrangement between shareholders or owners of the
company and the management firm hired to organise and monitor the contract. A corporation or
an agency shall employ a management firm to perform particular tasks.
• Joint venture: It involves two or more firms pooling their capital and skills to accomplish a
specific objective. The motives behind the creation of a joint venture include expansion of
companies, the production of new goods or the transition to new markets.
In relation to Hilton Hotel, one of the most suitable strategic options is franchising which helps the
organization to expand their business into several other countries and make this brand more
popular among worldwide.

References
• Okumus, F. and et. Al,, 2019. Strategic management for
hospitality and tourism. Routledge.
• Porter, N., 2020. Strategic planning and place branding in a
World Heritage cultural landscape: a case study of the English
Lake District, UK. European Planning Studies, pp.1-24.

Thank You