This particular report was based on strategic steps that are taken by the organization or that should be taken by the organization to enhance its position in the market. an extensive internal, as well as external analysis, was conducted for this particular organization where it was identified that the hospitality industry is one of the most competitive industry as there is no barrier of entry or exit, along with that it was also identified that the organization was always ready for a challenge because of which the organization had expanded beyond its managerial control. These analyses were conducted using SWOT analysis and Porter 5 Model.
It was identified that if the organization wants to enjoy huge profits it has to stop its expansion project and enhance its CSR practices. Also, for this particular report, the current pandemic has been considered so that a clear strategic position of the organization could be determined.
About the Company.
Vision and Mission.
Porter 5 forces.
Keen Focus on Innovation.
The desire for competitive advantage.
Highly Focused on Expansion.
Resistant to change their Values.
Change in Consumer Behaviour
Increasing focus on Personalization.
Increase in the CSR Practices.
Focusing on its Strength.
Marriott International is an American hospitality company that operates in 131 countries with 30 brands under its name (Marriott International, 2020). The organization has been one of the prominent leaders in the hospitality industry. The current strategic report is being documented to identify and analyze the strategic management of Marriott International. This particular report also focuses on the internal as well as the external analysis of the environment and its impact on the organization. For internal analysis, a SWOT analysis tool was utilized. This particular tool helps the researcher to identify an organization's strengths, weaknesses, opportunities, and threats (Gürel & Tat, 2017). As for the external analysis part, Porter 5 model will be utilized. According to this particular model the state of competition in any industry is dependent on five basic forces, namely, bargaining power of the supplier, threat from new entrants, bargaining power of buyer, existing industry rival and the threat from a substitute product or a service (Eskandari et al. 2015). The report is followed by some recommendation which will help the organization to make a favorable change that might help the organization to grow even further. The data for this particular report will be collected using secondary sources such as peer-reviewed journal articles, books, and official websites.
Marriot International has become one of the biggest names in the hospitality industry. The American multinational as it is known now was started by John Willard Marriot and Alice Sheets Marriot in the year 1927. However, Marriott international was not started as a long chain of Hotels but as a root beer stand. The first-ever hotel that was opened by the organization was the Twin Bridges Marriott Motor Hotel which started its operations in the year 1957 (Marriott International, 2020).
Marriott International was formed in the year 1993 after the company was divided into two separate entities, namely, Marriott International and Host Marriott Corporation. In the initial days of operations, the organizations were provided with a first movers advantage as Marriott International was the only firm throughout the firm which provided its guest with the facility of online booking of their desired rooms and services. To achieve this first-mover advantage the organization implemented MARSHA, integrated system software that helped the organization with the reservation process (Dhir, 2019).
As per the latest statistical report Marriott international is said to be the largest hotel chain throughout the world. The organization incorporates 30 brands under its name and has approximately 7000 properties in 131 nations (Marriott International Inc, 2018).
It has been identified that the organization does not have a mission statement, however, the organization does possess a vision statement that goes "To be the World's Favorite Travel Company." (Marriott, 2020)
The organization has set up a humongous target for itself, Marriott International has aimed to increase its lead in the luxury as well as the full-service segment, to attain the largest portfolio in the high-end strata of the society. at the same time, the organization also wants to focus on the middle and the upper-middle-class society, as they aim to provide luxury at an affordable price (Marriott, 2020).
In terms of sustainability goals, the organization is trying to follow the guidelines that have been generated by them and at the same time, they are also trying to incorporate the guidelines that are set by the United Nation Sustainable Development Goals. According to the annual report of the organization, Marriott International would like to keep on investing in all those mediums which can help to energize the community as well as the environment where the organizations operate. The organization would also like to work upon the severe issues like climate change and take actions to minimize its impact (Marriott International, 2019).
The organization is still following the philosophy of J. W. Marriott, which stated that the people who are working for the organizations should always be kept in front. The reasoning behind the philosophy was that, if the organization takes good care of its employees, the employees will enhance their efforts while treating the customers. This mindset has helped the organization to earn multiple awards throughout the world (Core Value & Heritage, 2020).
The organization is completely inclined towards its customers, the primary goal of the organization has been incorporated with the values of the enterprise. The primary goal portrayed that the organization is capable to provide its customer with good food and good service at affordable pricing. `
However, the biggest factor that shapes the core values of the organization is its integrity. The organization complies strictly with the legal as well as the ethical standards that are accepted in all the regions where the organization operates. Whether it be the environment or their human resource, the organization try to embrace their presence (Deale, 2013).
Marriot International has always been the one responsible to shape the market trends, the sole reason why Marriott International has always been a market leader is that they are solely focused on their operations and their tactical execution. The organization can take the help of industry mapping to understand the tactical moves that can be taken up by its competitors (Netek, Burian & Kohn, 2019). If Marriot can align the porters 5 forces framework and industry mapping together, it will help the organization to develop efficient business strategy along with conclusive industry analysis.
It has been identified that the hospitality industry is one of the most attractive industries (Chiang & Saw, 2018). This particular industry influences a lot of entrepreneurs to make their investment and wait for high returns. However, there is still a debate about why the hospitality industry is preferred over other industries as other industries might provide the investors with a higher rate of return. the company has continuously controlled the new entrants by changing its operation whenever needed.
On the contrary, the bargaining power of the consumers has been increasing significantly. The main reason behind it is that the buyers are slowly becoming more and more aware of the products and at the same time the consumers can get more options at the same price. The enhance of consumer knowledge can be directly linked to the availability of free information that can be achieved with a simple tap or a click. To overcome this particular scenario the organizations have worked rigorously on their brand image as well as their customer satisfaction.
It has been observed that the hospitality industry has given rise to various rivalries, because of its diverse and competitive nature. This particular scenario can be easily identified by the increasing expansion to different parts of the world just so that they can attract more and more consumers. To expand its reach and to get an edge over its competitors the organization takes the help of franchising rather than renting or buying new assets for the business, this not only helps the organization to save their money but it also helps an organization to mark their territory which makes it harder for their competitors to acquire valuable property at a lower rate. Competitive rivalry in the hospitality industry has helped the organization to increase its standards, brand image, and the experience of its loyal customers. Which later on helps the organization to retain the customers.
The bargaining power of the suppliers is among some of the factors that are quite troublesome for all the businesses operating in the hospitality industry. Both the entities have a global presence that is the supplier as well as the organization and it has been observed that the suppliers only like to cater to those businesses that try to incorporate them as one.
It has been discovered that high competition gives rise to substitute products (Neirotti, Raguseo & Paolucci, 2016). Even if the competitors try to provide the consumers with the substitute, Marriott international has put forward brand strategies that help the organization to keep its product from becoming obsolete.
The biggest rivals of Marriott International are, Hilton Worldwide, Hyatt Hotels, Millennium & Copthorne, and Wyndham Destinations.
· A keen focus on Innovation
· The desire for competitive advantage
· Highly Focused on Expansion
· System driven
· Resistant to change their values
· Change in consumer behavior
· Untouched market
· Global travel
· Increasing focus on personalization
· Fierce Competition
· Terror Attacks
Marriott International is present in 131 countries, with a total of more than seven thousand properties around the world. In addition to this, Marriott International is the parent company for 30 brands (Marriott International, 2020).
Keen Focus on Innovation
It has been identified that the organization's core operational philosophy is derived from innovation. The main aim of this philosophy is that the organization wants to provide its customer's value for money.
The desire for competitive advantage
According to many reports, Marriott international is famous for its competitive approach, whenever the organization finds any of its rival trying to get an edge over the organization, Marriott alters its strategy (Nyangwe & Buhalis, 2018).
Marriott has always been one of the leaders in the hospitality business, even after events like 9/11 the organization was able to bring itself back to its feet.
Highly Focused on Expansion
Though it might seem expansion as one of the greatest tactics to overcome competition, now the Marriott international empire has become so large that the organization can't provide quality service in every property owned by them (Coe, Johns & Ward, 2012).
The organization overemphasizes of their service standardization procedure. The organization is well known throughout the world for its system driven business. With the strict rules and regulations without any room for flexibility, the employees of the organization are having a very tough time.
Marriott International has always been surrounded by controversy. One of the biggest controversies was exposed where the organization was trying to block the personal wi-fi of their consumer stating that it would lead to privacy risk. These controversies have shrouded the organization's brand image (Weber, 2019).
Resistant to change their Values
This particular scenario should be identified as a positive point. However, from a business point of view, it is negative. The organization focuses majorly on the family business. This shows that the organization is resistant to change and in the long run, might even allow its competitors to go forward.
Change in Consumer Behaviour
It has been identified that people are shifting towards a life of comfort and luxury. The people are trying to portray their perfect lives in front of their family and friends, this can become a huge opportunity for the organization, as the organization will be getting free promotions by their guests.
The organization can now shift towards niche marketing as multiple markets are left untouched. It has been identified that the organization is trying to lure in the LGBTQ community by providing them with exclusive offers.
It has been discovered that global travel is on the rise. The organization can use this opportunity to associate with different airlines hotel chains and get an edge over its competitors. However, due to Covid-19, the airlines have come to a halt, but the organization can still cater to consumers in their respective countries (UNWTO, 2020).
Increasing focus on Personalization
It has been identified that the consumers are willing to pay extra if the hospitality industry can provide them with accommodation according to their liking. Marriott International can use this opportunity to charge a premium price for their personalized service.
The organization experiences head to head competition from its rivals in the hospitality industry. If the organization makes one wrong move they could end up losing their place as a market leader.
Economic recession is one of the major threats for organizations like Marriott International, the sole reason behind it is that the organization is spread across throughout the world and it is practically impossible for the organization to take personal care of their property.
Premium hospitality businesses throughout the world have always been one of the most preferred targets for various terrorist groups. These events have made the tourist very afraid to stay in premium hotels. One of Marriott property in Islamabad was targeted by the terrorist in the year 2008 killing approximately 54 people (Lisle, 2016).
It was identified in the report that the organization focuses majorly on expansion to get an edge over its competitors. However, it has been discovered that extensive expansion can affect the organization adversely. During the recession that has been caused due to COVID 19, the organization might not be able to function properly which might lead to multiple of the properties being closed down or sold off. Not only does it impact the organization externally but, extensive expansion can become too hard on an employee, leading to unsatisfactory performance.
Rapid growth through expansion is not only a major problem for the organization but its guest as well, because the organization will not be able to provide the customer with their best service, which might adversely impact the brand image of the organization (Queensland Government, 2020).
Marriott international might have to hire new staff members and train them, as the staff turnover ratio will be high because of the workload on the employees, because of which the organization has to incur heavy losses and the biggest point why ht organization should limit its expansion policy is that, the organization might forget the basic goal behind expanding their business. The main goal of the organization while expanding the business is to get an edge over its competitors, however, it has been discovered, there are chances that the organization might lose the tract of its competitor's activity.
Amidst the pandemic the organization should provide the world with enhancing corporate social responsibility practices, this will help the organization to enhance its brand image. Apart from that, if the organization just provides the society with a random act of kindness, it will help the organization when the whole world goes back to normal.
The organization has the facilities, which can be used in these horrific times, and if the organization can use this particular opportunity, it is possible that it can come in the good books of the society as well as the government.
As the current economic scenario, it is possible that the organization might not cater to many guests even after this fiasco is over. The organization cannot force its customers to help them in these bad times. Throughout history, whenever the organization was facing a tough time the organization mainly focused mainly on sustaining the brand image of the organization. Through their superior customer service. The main reason why the organization is so preferred because Mariott International has always provided its customers with quality. This particular. the quality provided by the organization was the main weapon of the organization which helped the company to reach the position where it is now placed. However, Mariott should also focus on the untapped middle-class society which can work as a major boost for the organization.
It has been observed that Marriott International has made a name for itself in the hospitality industry. It will be crucial to identify whether or not the organization will emerge as a market leader once the situation is back to normal, that is when this particular pandemic is over. In the report, it was analyzed that the organization should slow down its expansion process and try to take notice of all of their investments along with the franchises. The organization should use its strong reputation and network, Marriott International can help to increase the demand as well as the occupancy rate throughout its brand. High customer service means nothing without the customer.
The reward program will help the organization to extend to its loyal customers, which is surely going to impact the future growth of the organization. Mariott Internation should try to enhance its customer base with the help of committing its customers to their brand choice thus creating demand as per the brand preference. This particular act of the organization will help the organization to achieve advertisement through word of mouth it has been identified that the word of mouth is more effective than the other forms of promotion and advertisement.
In this particular report, it was identified that the global lodging industry is very competitive, giving rise to multiple rivalries. Marriott International grew from a very small family business to a global leader in the hospitality industry. The owners were able to make the right strategic moves.
In the report external as well as internal analysis took place, the external analysis was conducted with the help of the porter 5 models whereas the internal analysis was conducted using SWOT, that is, strength weakness opportunity and threat. During the external analysis it was identified that if the organization makes even a minor mistake, its customer base might shift towards its competitors. With such a competitive market the organization has to change its strategies from time to time. On the other hand, the internal analysis showed that one of the main strength of the organization is its positivity, Marriott International had had their share of problems, however, they converted all their problems into opportunity and moved up the ladder. In the internal analysis, it was discovered, that the organization faced major threats from terrorist groups and one of its infrastructures was destroyed in Islamabad by these terrorists.
The organization needs to minimize its expansion activities as because of increasing expansion the organization is not able to manage its businesses that are spread throughout the world. Apart from that, the organization should work on its CSR practices as after this pandemic, it will help the organization to gain more consumers as compared to its rivals.
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