Marriott Hotels: Strategic Management

Company Overview

Marriott Hotels is an international corporation operating in the hospitality sector. The company being based in the US has various hotels and resorts in other countries across the world. The company has more than 3000 properties in different countries around the world (Anon 2015). Opened in 1950s, the company has grown to be one of the best companies to work in, as voted for by Forbes magazine in 2009. Over the years of the business operation, there were developed various strengths and weaknesses, threats and opportunities that the company needs to maintain or improve to ensure an increase in its competitive advantage in the global hospitality industry. Marriott Hotels operations portray various issues experienced in the hospitality industry (Sloan, Legrand & Chen 2012). The present strategic report will focus on various corporate and business strategies that the company should consider to ensure improvement in its future strategic plans.

 
 

Marriot Corporate Strategies

To ensure the success of Marriott Hotels and Resorts, it is important to devise strong corporate strategies which will support the company’s mission, vision and goals in the hospitality industry. Having analysed the current global hospitality industry and other external environments for the business, the company needs to adopt strategies such as

Improving the Company’s CSR. The long-term goal of Marriott Hotels and Resorts Corporation is to increase its growth by 4 %. The company must ensure it increases its competitive advantage across the world if it wishes to achieve this goal (Holcomb, Upchurch & Okumus 2007). Corporate social responsibility is one of the strategies the company can use to ensure an increase in its competitive niche. Marriott Hotels, for instance, opened a hotel in Haiti after the 2010 devastating earthquake (Smith & Ong 2015). The establishment of this hotel was to provide employment for the Haiti population which lost jobs due to flooding (Kaushal & Sharma 2016). The hotel which was scheduled to be opened in 2015 was to incorporate the Haitian youth into the food and beverage personnel by training and offering employment.

It is important to spare a thought for the society since it provides the advantage of increasing the public image of the company. It is achieved through proper media analysis and shareholder analysis of the company (Liu et al. 2014). A company practising CSR is often considered transparent and dependable. However, this initiative may be accompanied by disadvantages. The major problem of CSR initiatives includes the cost the company has to cover. The establishment of the hotel in Haiti, for instance, required capital from the company (Smith & Ong 2015). Although the Marriott Company can afford to start various CSR initiatives in its areas of operation, the efforts should not be exaggerated to a point when they become costly to the operations of the business.

Expanding the Markets. To achieve improved growth of the business, it is necessary to broaden the range of consumers. Marriott Hotels and Resorts saw a decline in growth during the 2008 global economic crisis. However, with the changing economic conditions across the world, the company should consider expanding its operations elsewhere, for example in regions such as Europe and the emerging markets of Asia. Organisational expansion strategies are mostly aided by collaboration with other brands in the industry (Gursoy, Saayman & Sotiriadis 2015). Europe, for instance, offers high demand for hotels and lodging services (Schmidt 2015). The Marriott Company has expanded into Europe by introducing two new brands known as Autograph in 2009 and Edition. The two brands were formed in collaboration with other brands, namely Ian Schrager, and were designed to target luxurious customers in Europe (Petrović et al. 2013).

Expansion of the business will have various advantages to the corporation, for instance, franchising of the business helps the company to get access to new customers through an agent. Autograph and Edition were instrumental in helping the Marriott Company to increase its customer base in Europe (Wong & Wickham 2015). In the case of acquisitions, the corporation would be able to spread its operational risks. However, on the other hand, expansion requires capital, and this may reduce the available resources of the company (Alon, Ni & Wang 2012). The collaboration issues between Marriot and its partners came as a disadvantage to these expansions. Also, in the case of expanding to the Third-World countries, the expansion may be withdrawn by the lack of expertise in these demographic regions.

Improving Safety Concerns. In the modern hospitality industry, the issue of safety has become critical. The terrorism threat has affected many hotelier businesses, for instance, the Mumbai Hotel incident. It is, thus, of great importance that the Marriott Corporation ensures it adopts improved security policies to assure the customers of safety (Chan & Lam 2013). Currently, the Marriott Company has a security programme which guarantees the safety of its customers on its premises across the globe.

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The need for improved security concerns is due to the strategic plans to expand the operations of Marriott business into different markets. In Europe, there has been an increase in terrorist attacks. Since the war on terrorism continues, it may be difficult to ensure total safety to the customers (Wernick & Von Glinow 2012). For instance, in cases when the company has franchised its business to a particular region, it might be difficult to maintain standard safety like in other regions where the company operates the business by itself. Marriott safety standards can be compared to those used by the homeland security. Although the details of the company cannot be exposed, this gives the company an advantage in terms of security concerns. However, collaboration during expansion comes as a challenge as not everyone considers standardised security concerns.

Marriott Business Strategies

An organisation’s business strategies position the business to ensure optimal generation of returns despite the conditions in the industry it operates. It is worth mentioning that the Marriott Company has various business approaches.

Improving Brand Image. This business strategy has been adopted for the past few years. The strategy is aimed at removing the traditional image of the company and replacing it with new marketing efforts that are customer-centric (O'Neill & Matilla 2010). Many competitors in the industry had already devised trendy brands, and Marriott has since been lagging behind them. Marriot's efforts to create a popular brand have led to the opening of online blogs to attract customers who are often dependent on the internet. This use of technology to improve the brand image of the organisation is known as internet marketing (Geddes et al. 2015). The company also operates on various social media platforms which enable customers to engage in the enterprise.

There are such advantages of creating a trendy brand as the attraction of new clients. It also helps the company to maintain its competitive edge by being at the same level or above its competitors (Dev 2014). However, creating a trendy brand through the internet can be disadvantageous. Social media can easily tarnish the brand name if the company makes a slight mistake. For instance, posting photos of poor customer service on Twitter can be disastrous to the organisation.

Reduction of Costs. Apparently, this is another business strategy practiced by Marriott Hotels to ensure an increase in returns at reduced costs. The Marriott Company has various expansion plans; however, this does not deter the company from ensuring its operations are conducted at lowest costs possible (Patiar 2016). The strategy is to guarantee the returns from investments are high, and the company has enough capital to achieve its plans for expansion (Sitawati, Winata & Mia 2015). The strategy focuses on producing incremental revenue by covering costs of various marketing and communication techniques.

The strategy of cutting costs by the Marriott Company is significant in ensuring the organisation has enough resources to pursue its expansion plans. However, the decrease in costs has its disadvantages to the company as well (Gursoy, Saayman & Sotiriadis 2015). For instance, aggressive reduction of costs risks leaving the company with the insufficient capacity to achieve short-term goals. Also, it may affect particular areas of operation such as the company's customer service.

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Our Advantages

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Marriott’s Future Strategic Potential

The Marriot Company has increased its reputation and stability in the recent years. However, the company has a potential of reaching greater heights taking into account future potential of strategies it is implementing (Olk, Rainsford & Tsungting 2015).

Increased Technological Changes. The hospitality domain is astronomically being revolutionised by various changes in technology (Kandampully, Bilgihan & Zhang 2016). To enjoy the fruits of the seismically changing technology, the Marriott Company plans to introduce various mobile applications that will help increase the business's interaction with clients as well as help customers to book and check into the hotels (Lewis-Pryde & Evans 2016). The other technological plans formulated by the company include using social media to attract new customers, specifically the young generation (Oates 2016). Although this group of customers does not travel a lot, the Marriott Company believes this generation will form potential future customers when they start their careers.

More Expansion. Marriot has expanded into different markets for the past five decades. However, the trend is not about changing as the company is planning to open more hotels in different regions of the world (Alon, Ni & Wang 2012). The plan will see the total property held by the Marriott Company increase from 3000 to more than 5000 by the year 2017 (Bhattarai 2014). The planned expansion programmes are in line with the increasing growth of middle-class and economic growth in developing countries. The management at Marriott considers the present times to be the golden times of travel. The expansion plans, thus, have the potential of increasing returns. The growth is predicted to increase from 19 % to 21 % by the year 2017 (Sima 2016).

Conclusion

In all, Marriot Hotels and Resorts have been successful in its operations due to its corporate and business strategies. Marriot has operated for over five decades, and its major corporate strategies have included corporate social responsibilities, safety, and expansion into new markets. Also, the company has various business strategies such as improvement of brand image and reduction of operational costs. The company has a potentially better future on the basis of the future strategies such as increased use of technology in its operations as well as more expansion into new markets.

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