Critical Analysis of Mariott International - Case Study Example

STRATEGIC ANALYSIS OF MARRIOTT INTERNATIONAL, INC Report Submitted by Dikshit Jhanb ID: 5891159 319LON Tourism Destinations Management Table of Contents Table of Contents 2 Executive summary 3 Introduction 3 Global Contribution 4 Marriot Group’s Strategic Position 6 Butlers Tourism Area Life-Cycle 8 Pestle and SWOT Analysis of the Marriott Group in the American Market 9 Marriot Group’s Sustainability Strategy 11 Business Theories and Tourism Industry Sectors 12 Cultural Quotient (CQ) Business Theory 12 Conclusion/Recommendation 13 References 14 Executive summary Marriott group beat the rest in many ways to become one of the world’s company with the best hotels and resorts. The group’s brand image is one of the best in the world. The Marriott group has a larger presence in the American market where it was first incorporated. The group enjoys market dominance in America and has a significant presence in other parts of the world too. The group’s business is unique in many ways because it puts focus on sustainable operations. The company’s strategy on sustainability cuts across many areas from its core business to the environment. Marriot group has won many awards due to its efforts to ensure that suitability is achieved. In this report, the company will be analyzed using the common models to determine its position in the market. Its strategies will be carefully analyzed to give insight to its future direction. Introduction Marriot Business Group is one of the fastest growing companies in the world. The company pride in offering the exemplary hospitality services in the world. The company has its business mostly concentrated in the United States. According to the sustainability report released in 2012, the company had 3,180 hotels in America, contributing to over 89% of the company’s business. The company has however managed to set up establishments in other parts of the world. According to the mentioned report, the company has other establishments in China, Canada, United Kingdom, Spain, Germany, Mexico, India, France and Russia. The company has done a lot in promoting environmental sustainability thus affirming its efforts in ensuring a safe environment for all. Due to these efforts and the innovativeness exhibited by the management, the company has bagged many awards in appreciation of the groups contribution in the world. This report will critically analyze the company in terms of is global importance, its strategic position and how the company contributes to environmental sustainability. The report will also assess the company’s specific strengths that have contributed to this remarkable growth over the years. Global Contribution The group has made a remarkable positive contribution in the world. According to the company website, the group offers memorable experience through their hospitality services. With the unwavering skills of the staff, the company has met major milestones in providing innovative services and products that are exceptional in many ways. In this section, the company’s contribution in major business and social areas are going to be assessed. The Marriott Group is one of the leading companies in offering employment in the world. The group received a recognition award in 2014 for being the best global employer of the year (Marriott website, 2014). The group emerged Germany’s best employer in 2015 in an annual survey conducted by the Focus Magazine, one of the most influential weekly news magazine. The company has bagged many other awards that show exemplary service and a reputable brand. The company’s reward program was named the best in the first ever survey to be conducted on fortune, travel and leisure in 2014. The company has also been recognized for having the healthiest employees in the world. In the sustainability report that was published in 2012, the company has a total of 199,318 associates in the whole world by the end of the year. This was a 43% increase from 191,104 the previous year. This is a clear evidence that the company is a major employer especially in the American market where its business is largely concentrated. The company not only employs but makes sure that its employees welfare is well making it rank 7th in the best multinational company to work for in the world an award that was realized in 2014. In its Social Responsibility Program, the company has made remarkable contributions environmental conservation in the world. In a policy statement on the environment, the company asserts that its efforts to foster responsible hotel management are unshaken. The company realizes this by supporting the inspiration of environmentally positive actions in the communities around the world. The companys environmental goals include reducing water and energy consumption by 25% per room by 2017, achieving green supply chain management which is worth billions of dollars yearly, supporting the education of associates and guests on environmental conservation, implementing green construction standards for developers of hotels and lastly to invest in environmental initiatives that are innovative such as water protection and conservation. According to the company’s sustainability report, 214 hotels worldwide received the 3-D Trasar equipment that is useful in monitoring and innovative chemistries to offer innovative water treatment. The company has also reduces landfill waste per room occupied by 49% according to the company’s website. The company makes huge efforts to collaborate and collaborate with the relevant environmental bodies to ensure that the environment is properly conserved and that the communities in which the company operates are happy. The Marriott Group has supported major societal projects that are beneficial to the societies in which it operates. A good example elaborated in Table 1.0 in which, cash contribution that has been rising from $6.9M in 2010 to $7.5M in 2011. Total contributions towards supporting projects that contribute to the overall wellbeing of societies. According to the companys management, the group is committed to realizing strong neighborhoods, cities, and towns. The company believes that a strong neighborhood translates to a strong economy as well. That total contribution in 2012 was $37.7M up from $34.6M in 2010. The company has made other major contributions in America and the world, and its expanding businesses will bring more positive contributions in parts of the world where its presence is not felt currently. Table 1.0 Contributions Source: Marriott Sustainability report 2012 Marriot Group’s Strategic Position The Marriott group formulated various strategies including corporate, business, marketing, and international strategies. The company pursues each strategy individually, but the results realized contribute to the overall growth of the company. Marriott Group, therefore, is strategically well placed since its strategies are specific and attainable (Dubé & Renaghan, 1999). In marketing and international strategies, the company has a strong global strategy, the quality of its service is the best and one of the best rated in the world. The company furthers marketing through offering the best quality. The company has developed a worldwide reservation network made of more than 2,500 agents to facilitate reservation from customers. Also, the company has developed an online reservation management tool called MARSHA. A strong that helps the company to manage global demand from its customers. In 2007, the tool handled over 76M reservations that contributed to $250M in cross sales among the company’s brands. To further this goal, the company has also unveiled an e-commerce platform where online adverts of its services and major properties. The company website is among the top three most used sites for placing reservations in the world. The websites registers 10M unique visitors per month and contributes over 85% of the company’s interment revenue. The company’s global sales strategy is to build proper customer relations through understanding and meeting of their unique needs. To realize this, the company has several sales offices in the globe to help the company to penetrate deeper in the emerging markets. In 2014, the group launched the global creative and content studio for marketing its services and brands. The Group’s brands are tailored to ensure that they are current and top in the market. The group’s business strategy is to lease and own hotels at the same time. The company works with the owners to improve the efficiency of the building. The company sets brand standards for its franchised hotel. The Marriott group does not manage associates. According to Marriot report on the business model and sustainability strategy, the company had the following top markets in 2013 as set out in Table 2.0. The report shows clearly how the groups business is organized. This business strategy is very successful according to the groups management. Table 2.0 Top Markets Source: Marriott Report on Business Model and Sustainability Strategy 2014 The corporate strategy of the group is one of the best in the hospitality industry with an outstanding commitment to integrity and transparency. The Ethisphere Institute recognized Marriot International as the worlds most ethical groups in 2015. (2015). This is according to Marriot News Center website. The company uses a formal structure with a range of councils made up of executives and associates who make daily decisions on the direction of the company. The committees include excellence, global green, human rights, and business councils. Butlers Tourism Area Life-Cycle This theory states that a tourist destination areas undergoes through six different stages in its entire tourism lifetime (Butler, 2006). The stages are exploration, involvement, development, consolidation, stagnation and lastly it is either a decline or rejuvenation. Other scholars have proved this theory right. Perhaps it is based on this finding that the Marriott Group is supporting the development of local cities, towns and neighborhoods. This is because it believes in a strong neighborhood for its business to thrive. Figure 1.0 represents a diagrammatic representation of the theory. Figure 1.0 Tourism Life Cycle Source: Butler, 2006 Pestle and SWOT Analysis of the Marriott Group in the American Market Many companies to determine their position concerning the external market environment use these models. The models helps the companies to know their opportunities for success in the modern competitive markets (Marketingminefield.co.uk). PESTLE Analysis Political Highly supportive government in terms of business U.S is Largest democracy in the world Economical Strong growth in the US market and elsewhere Customer with high spending power in the country Flourishing economy in the world Social Market whose people value leisure and entertainment Very diverse nation with people from all over the world thus larger market for diverse brands Large population thus larger market Technological Leading in technological innovation thus doubling reservations placed online. Has best online portals and technology systems in the world Environmental Best infrastructural support in the world Best climatic changes that encourage tourism within and outside America. Legal Nondiscrimination law has widen the market in the US. Business law in America provides freedom for SWOT Analysis Strengths Technological innovations, highly established with the largest number of assets, diversified brand portfolio, higher brand recognition Weaknesses Highly dependent on the luxury brands found in the US market thereby lacking the low cost brands common in developing world. Opportunities Strong growth in American market and other emerging markets, brand expansion, Threats Terrorism threat across the world is lowering the number of tourists thereby negatively affecting business, Marriot Group’s Sustainability Strategy The group’s sustainability strategy is built on environmental conservation activities and building of strong neighborhood. The company’s sustainability efforts begin with its commitment in championing for ethics and human rights. The company believes that through fostering ethics, its business will thrive sustainably in the current modern market. Ethical practices are crucial to the nature of business the company does. Ethical practices regulate the company relationship with its major stakeholder providing a way through which sustainable interactions and relationships are achieved. The company has contributed to other global programs that seek to bring sustainable solutions for major problems the world is grappling with today. According to the company’s sustainability report released in 2012, the company has contributed towards stopping of human trafficking in the world, children right protection. Due to these unwavering efforts, the company scored 90% on Human Rights Campaign Foundation’s Corporate Equality Index. Marriot businesses have provided an avenue for socio-economic development in areas where Marriott operates. In Peru, for instance, the company is working with the German Agency for International Cooperation (GIZ) in bid to quantify economic and social contributions from tourism. According to sustainability report 2012, the company contributes more than 10M annual revenues to the Peruvian economy. Marriot group also contribute towards building the strong societal neighborhood, cities and towns through charitable campaigns. In 2012, the company saw more than $23M contributed towards building and strengthening projects that benefit the societies in which it operates worldwide. A good example is during the devastation that was caused by Hurricane Sandy in New Jersey. The hotel welcomed displaced people and emergency workers. In the same year, the Marriott Group and its partners contributed towards helping the sick children. This is an undertaking that is still on, and many people have benefitted from the initiative. Communities in which the company operates have benefitted from employment as the company draws most of the workers from where it operates (Renner, 2011). The company previously received awards for the vitality of its workforce. It has been voted one of the companies whose employees are happy and healthy. It is, therefore, the best company to work for. The company has a strong commitment towards ensuring that environmental conservation efforts are championed for and supported. Table 3.0 below summarizes the company’s efforts to contribute to suitability through environmental conservation. Table 3.0 Environmental Performance Indicators Source: Marriott Sustainability report 2012 Business Theories and Tourism Industry Sectors Cultural Quotient (CQ) Business Theory This is a theory states that being aware of the culture in which, a business thrives, helps the business to perform well. Big companies like Marriot Group are growing in influence across the world, and there is a need for the company to identify and improve culturally diverse situations. Research has demonstrated that business organizations that adopt CQ accrue the following benefits among others 1. Efficient Cross-cultural adaptation and proper decisions. 2. Improved innovation and creativity. 3. Enhanced job performance. 4. Improved cost saving and profitability. 5. Reduction in attrition and improvement of multicultural terms. Firms operating in tourism industry like the Marriott Group must adopt the use of CQ to benefit from the benefits already highlighted. This is because, the tourism industry is one of the industries that operates in a multicultural environment (Bennion, 2010). Conclusion/Recommendation The Marriot Group is doing its best in expanding the business across the world, and its business model is the best compared to other institutions in the hospitality industry. The group has the best working environment as it is revealed by the many awards recognizing its healthy workforce. The group has a huge presence in the American market and little presence in other markets. It is however making good progress in acquiring new markets and the efforts should be doubled. Recommendation In the recommendation, perhaps it is good for the group to FastTrack on its efforts to establish a significant presence in all parts of the world. This will lead to the realization of more opportunities across the world. The group can also shift the focus from the expensive and luxurious brands to less expensive brands in the upcoming markets in developing countries. References Bennion, M. (2010, October). Cultural Quotient & ethics in relationship marketing. In Conference Proceedings ofThe 3rd World Business Ethics Forum. Butler, R. (Ed.). (2006). The tourism area life cycle: Conceptual and theoretical issues (Vol. 2). Channel view publications. Dubé, L., & Renaghan, L. M. (1999). Sustaining advantage competitive: Lodging-industry best practices. The Cornell Hotel and Restaurant Administration Quarterly, 40(6), 27-33. http://en.wikipedia.org/wiki/Marriott_International- accessed on 6 June 2015 http://www.marriott.com/corporateinfo/culture/heritageTimeline.mi- accessed on 6 June 2015 http://www.marriott.com/news/default.mi?marrBrandCode=NA- accessed on 6 June 2015 Marriott Group. (2014). 2013 Sustainability Report Update. Print Marriott Group. (2015). 2013 Business Model and Sustainable Strategy Report. Print Marriott.com. (2015). About Marriott Hotels | Marriott Corporate Business Information. Web. 3 June. 2015. Renner, L. (2011). Strategic Analysis of Marriott International, Inc. Marketingminefield.co.uk,. PESTLE Analysis – Marketing Plan. N.p., 2015. Web. 5 June. 2015 Marriott.com,. About Marriott Hotels | Marriott Corporate Business Information. N.p., 2015. Web. 5 June. 2015. Tutor2u.net,. Product Portfolio - The Boston Matrix (Or Boston Box). 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