SWOT Analysis – Hilton Worldwide essay

External Factors

Weight

Rating

Weighted Score

Comments

Opportunities

1. The dynamic growth in emerging markets

0.6

2

1.2

Emerging markets have a great level of growth that is seen in the development of human capital through enhanced training and capacity building of the employees in the hospitality and tourism sector. The markets are also growing due to the consistent development of infrastructure in those areas that help to foster the tourism and hospitality industry. A score of 0.6 is assigned due to the huge impact of the growth of these markets towards businesses that operate within the hospitality industry. A rating of 2 is, however, assigned since Hilton Worldwide is less keen on opening new branches in emerging markets than it should, so as to tap into the opportunities that lie within them (Okumus, Altinay, &amp Chathoth, 2010).

2. The increasing demands for luxury brands.

0.5

3

1.5

People today are more geared towards having buying things and brands that are highly fashionable and have a good aesthetic value. As a result, this has a great effect in the hospitality industry as shown by the factor 0.5. This is quite essential for a company such as Hilton Worldwide that has prided itself in serving high-end customers. The company is, therefore, taking the advantage of this situation to achieve high sales as indicated by the factor 3 (Hilton Hotels and Resorts, n.d.).

3. The increase in the number of unique travel experiences.

0.6

2

1.2

Today, the rate of travel of people has grown immensely. People are more interested in visiting different areas that they have not visited before, which makes them spend heavily in the hospitality sector. As a result, firms such as Hilton Worldwide stand to benefit in a major way, thereby this factor has a weight of 0.6 since its effect is above average. However, the company may not be well positioned to benefit fully from this factor since it has not continued to open many more branches in different geographical locations. This low rate of response accords it a rating of 0.2 ( Hilton Hotels Corporation SWOT Analysis, n.p).

4. Technological revolution

0.6

4

2.4

In the era of technological revolution, it serves a company like Hilton Worldwide positively attracting a weight of 0.6. The factor 4 is necessary given the fact that the company has gone a long way to adopt u-to-date technological advances in its operations (Okumus, Altinay, &amp Chathoth, 2010).

5. Going “Green”.

0.5

2

1.0

Most people are today interested in environmental management. The influence is growing and has attracted a weight of 0.5. Although the company is doing its level best to comply, it still has a long way to achieving better practices that help to protect the environment (Okumus, Altinay, &amp Chathoth, 2010).

6. General rise of disposable income among people

0.7

4

2.8

More people are now able to earn an income that they could put into some luxurious activities. As a result, the factor bears a weight of 0.7 owing to its huge impact in the industry. Hilton Worldwide gets out to offer high quality services so as to capture this opportunity, at an estimated rating of 4 ( Friend, &amp Zehle, 2004).

Threats

1. The expected increase in the cost of real estate.

0.4

1

0.4

The cost of real estate has been on an upward trend in the recent years. The expected continual increase will see the company have a big problem with maximizing profits. The threats, therefore, bear a weight of 0.4. The company is also, doing very little to respond to this problem, thereby, attracting a rating of 1 out of the possible 5 (Fine, 2009).

2. Downturns in the tourism industry.

0.8

3

2.4

The tourism industry is normally characterized with ups and downs. In the case of downturns that could be experienced in the industry as a result of the reduction of the number of tourists who visit different areas, there is bound to be a great impact, especially in a business that deals directly with hospitality issues such as Hilton Worldwide. As a result, this attracts a weight of 0.8. Hilton Worldwide deals with this problem through continuous marketing venture so as to attract more customers. Its response rating is estimated at 3 ( Friend, &amp Zehle, 2004).

3. Politics.

0.5

3

1.5

Politics also plays a huge role, especially in determining the performance of the hospitality industry in different countries. People are bound to visit areas that are more politically secure compared to those that are less secure. In spite of this situation, people are also bound to visit areas that they wish to, regardless of the state of the area that they wish to visit. As a result, this factor attracts a weight of 0.5. Hilton Worldwide has had a good response to this factor by opening outlets in areas that have an enabling political environment. This, therefore, attracts a rating of 3 (Okumus, Altinay, &amp Chathoth, 2010).

4. Competition.

0.9

4

3.6

Competition is also quite important in the hospitality sector. Different companies that offer the same services as Hilton Worldwide exist in the market, thereby, bearing the weight of 0.9. The company, therefore, undertakes various advertising ventures to counter this problem, attracting a rating of 4 ( Friend, &amp Zehle, 2004).

5. Inflation

0.4

1

0.4

Inflation could make people less willing to visit high-end Hotels such as Hilton Worldwide. However, this effect is not so pronounced, thereby, attracting a weight of 0.4. Since the company has less control over this factor, it may not be able to have a proper response to it. The rating will, therefore, be 1 (Friend, &amp Zehle, 2004).

6. Legal environment

0.6

4

2.4

Some areas have legal environments that discourage setting up of businesses. An instance is such as high taxation rates for businesses. This factor attracts a weight of 0.6. Hilton Worldwide, responds to this problem by avoiding such areas. The rate of response is estimated at 4 (Fine, 2009).

20.8

From this Weighted Score, Hilton Worldwide is doing quite well in the market just the same way as some of its major competitors such as Hotels Kempinski.