ANALYSIS AND STRATEGY OPTIONS OF BUSINESS: THE CASE OF MARRIOTT INTERNATIONAL

Bài viết Analysis and Strategy Options of Business: The Case of Marriott International là một nghiên cứu chi tiết về phân tích và các lựa chọn chiến lược kinh doanh của tập đoàn Marriott International. Bài viết tập trung vào việc phân tích các yếu tố quan trọng trong môi trường kinh doanh và đề xuất các phương án chiến lược để tăng cường hiệu suất kinh doanh của Marriott International.Bài viết bắt đầu bằng việc đánh giá các yếu tố môi trường bên ngoài ảnh hưởng đến Marriott International, bao gồm cả yếu tố kinh tế, xã hội, chính trị và công nghệ. Phân tích này giúp hiểu rõ về thách thức và cơ hội mà tập đoàn này đang đối mặt trong ngành công nghiệp khách sạn và du lịch.Sau đó, bài viết đi sâu vào phân tích nội bộ của Marriott International, tập trung vào các yếu tố như chiến lược sản phẩm, đối tác, kỹ năng quản lý và tài chính. Phân tích này giúp xác định các điểm mạnh và yếu của tập đoàn và đề xuất các phương án cải tiến và phát triển.

FOREIGN TRADE UNIVERSITY Faculty of International Education -*** - REPORT STRATEGY AND INNOVATION TOPIC: ANALYSIS AND STRATEGY OPTIONS OF BUSINESS: THE CASE OF MARRIOTT INTERNATIONAL Student perform : Nguyen Thi Huong Giang Class : F-UON-M3E Major : Student ID : 2005081104 Instructor : Pham Thi My Dung Bachelor of Marketing Management Associate with University of Northampton HaNoi, March 2023 Table of Contents INTRODUCTION CONTENT 2.1 Overview of company 2.2 Vision, mission, and values of the company 2.3 External factors analysis 2.3.1 Pitch competitor - FORCES 2.3.2 PEST/PESTLE 2.3.3 EFE Matrix 2.4 Internal factor 2.4.1 IFE Matrix 2.4.2 Resource Base Model 2.4.3 VRIN/VRIO 2.5 CPM 2.6 Strategy of company 2.6.1 SWOT Matrix 2.6.2 TOWS Matrix 2.6.3 Strategic options 2.6.4 Recommendation CONCLUSION REFERENCE INTRODUCTION Marriott International, one of the top hospitality businesses in the world, has carried out extensive research to determine the primary patterns and problems the sector is currently facing In today's rapidly changing business environment, it is crucial for businesses to adapt and respond to these trends to stay competitive The study by Marriott provides insightful management suggestions for potential future business success In this article, we will examine some of the most important study results from Marriott and discuss how companies can use this data to create future management plans that will be successful CONTENT 2.1 Overview of company Marriott International is the largest hotel company in the world with more than 4,100 properties in over 80 countries and territories around the world, over 700,000 rooms, and an additional 200,000 rooms in the development pipeline The firm’s flagship brand is Marriott Hotels, designed to serve business and leisure travelers as well as meeting groups Marriott traces its roots to an A&W root beer stand founded by Willard Marriott and his wife Alice in 1927 in Washington, DC The firm experienced growth in the domestic market and international market over the next two decades, even opening an additional fast-food restaurant and forming a partnership with Sun Line cruise ships Marriott now places envelopes in 160,000 hotel rooms in the United States and Canada, urging its customers to tip the housekeepers 2.2 Vision, mission, and values of the company The goal of the Marriott International is very simple which is leaving a legacy of excellence in the service industry The company aims to be the favorite travel company for the masses throughout the world Marriott International Organization has ensured continued success for close to a hundred years on a global stage by following the vision of the founders of the company Marriott’s vision statement put forth by the company is “To be the World’s Favorite Travel Company.” The mission statement for the Marriott International is “To enhance the lives of our customers by creating and enabling unsurpassed vacation and leisure experience.” They believe that the key to long term success of any service providing company is to offer its customers services of that quality that the customer is left with no other option other than choosing your brand Moreover, to retain customers, Marriott International goes an extra mile to provide the customer with a vacation experience that is their money’s worth They so by creating a vacation experience and hotel experience full of comfort and enjoyment However, in the mission of the company, there are some missing factors A standard mission statement includes customers, services, markets, technology, philosophy, survival/ growth/ profitability, distinctive competences, public image, and employees Therefore, below is the proposal for an improved mission statement for Marriott: “Our mission is to serve individual business and leisure travelers looking for the best vacation and leisure experiences We connect with our customers all over the world through our website and app, offering them top-notch accommodation, dining, room service, and venues to suit their every need We strive to be the number one hotel company in the world, and dedicate unparalleled service and exceptional experiences, while following our philosophy and appreciate our employees.” Marriott International takes great pride in its employees and their behavior, which is the reflection of the core values and the culture of the company Five core values of the company are “We put people first”, “We pursue excellence”, “We embrace change”, “We act with integrity”, “We serve our world” 2.3 External factors analysis 2.3.1 Pitch competitor - FORCES 2.3.1.1 Barriers to entry (threats of new entry) The hotel industry is a lucrative but challenging sector One of the most challenging is high capital requirements When they decide to enter the market, they have to invest a considerable budget in various aspects namely branding, advertising, research and development fees, etc Moreover, government policy for the restaurant-hotel industry requires strict regulations Finally, the hotel industry is a service-based industry It means that the company needs to develop the service constantly to attract the new customers and retain their existing ones The company has to analyze the customer behavior frequently to solve their problem and improve the quality of service 2.3.1.2 Power of buyer In the fast-paced, the service industry becomes developing, it means that the customers have more choices to choose from Therefore, the competitors in this market strive to offer the best quality services at the most affordable prices to attract and retain their customers The customers can access the information on the Internet to compare and evaluate between different service providers One of the contributing factors to verify the power of buyers is the low switching cost because they can easily switch to other service providers if their need was not met 2.3.1.3 Power of supplier The service industry has seen exponential growth in recent years, the number of buyers does not always match the suppliers, often resulting in a situation where the number of product suppliers is more than the customers' demand This is the reason why several competitors offer competitive prices and devise strategies such as bundling or discounts to attract customers' attention The low switching cost also makes it easier for buyers to change their suppliers They need to focus on improving the quality of their products consistently by adopting new technologies, materials, and innovative production methods, providing better customer service, quick complaint resolution, and hassle-free switching experience to retain their customers 2.3.1.4 Substitutes of product The customers have several options to choose such as camping, homestays, and staying at the house of relatives and friends They offer customers the opportunity to immerse themselves in local culture, meet new people, and explore new places In addition, they are often much more affordable than hotels 2.3.1.5 Intensity of Rivalry High levels of product differentiation may help a business stand out from its rivals and gain an edge over them High industry growth rates generally draw more competitors, yet highly differentiating items can assist businesses surpass their rivals in the market 2.3.2 PEST/PESTLE 2.3.2.1 Political Marriott International operates in a global political environment that can be challenging due to varying levels of political stability Growing tensions and instability may hinder the gold industry's expansion as well as the prospects for the company to succeed The political climate of the nation is changing, and Marriott International should be aware of these developments because they could affect the government's goals for various industries Moreover, the corporate environment is negatively impacted by bureaucracy and corruption, which can also have an impact on activities like contracting, licensing, and fraudulent agreements Finally, profitability of the company can be directly impacted by entering high-tax countries, but the protection of intellectual property rights is crucial for a company's success 2.3.2.2 Economical The economic/business cycle stage plays a vital role in determining the performance of Marriott International A country's economic development directly influences the business environment and growth opportunities available to the organization Additionally, Organizational effectiveness is also impacted by how much money the host country's government has invested in developing its fundamental infrastructure A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry in the respective country Inflation, employment, interest, and exchange rates also affect the organization's performance, as they determine the consumers' ability to spend on offered products Moreover, labor market conditions can affect business efficiency, making talent attraction and retention more challenging if there is a shortage of skilled labor Financial market efficiency also plays a significant role as operating in highly efficient financial markets leads to improved liquidity position and strengthened ability to enter new markets The health and efficiency of financial markets will determine Marriott International’s ability to raise the capital at fair prices Lastly, the prevailing economic structure influences the business practices of Marriott International The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition 2.3.2.3 Social Social factors impact a lot on Marriott International operations First, the performance of the organization can be strongly impacted by changes in population aging, migration patterns, and socioeconomic factors For instance, elderly populations in specific areas might favor various hotel facilities, prompting Marriott International to adjust its product offers Growing inequality in many countries is also changing the power structure, which has serious implications for international organizations such as Marriott International The company must study traditionally assigned gender roles to align its marketing and communication practices Moreover, societal norms and class distribution also affect the company requiring the creation of local teams and partnerships to comprehend various cultural situations Understanding online shopping behavior by considering the generational differences as younger consumers are more inclined to shop online than older customers Marriott International attempts to understand the degree of consumer ethnocentrism and consider the country-of-origin effect to determine local consumers’ evaluation of foreign products 2.3.2.4 Technological In the high-tech era, technology becomes more and more developed and has some certain influences on the success of Marriott International Firstly, Marriott International can leverage the opportunities offered by social media marketing to improve business performance Technological developments can be used to initiate innovative social media campaigns for building online brand communities However, to keep ahead of the competition, Marriott International should carefully analyze the ongoing technology developments The potential for the 5G to produce beneficial business outcomes through improved user experience, better speed, and increased access should be closely monitored Furthermore, new technologies influence the firm’s value chain and prevailing cost structure so Marriott International needs to consider the investments made by competitors on a micro and macro level 2.3.2.5 Legal When creating human resource policies, anti-discrimination regulations (such as those pertaining to equal employment opportunity) must also be carefully considered because discriminating lawsuits against employers undermine an organization's reputation and impair its capacity to recruit and retain talent Given that some nations have severe laws enforcing labor safety, Marriott International is required to adhere to employee/labor health and safety rules About the Consumer protection laws, consumer worries over their privacy and security, data protection has become a crucial problem To safeguard client data, Marriott International must research data protection laws Finally, regulations governing intellectual property are intended to safeguard businesses' valuable ideas and patents Lack of IP protection can lead to a loss of competitive advantage, which could harm Marriott International's position relative to other market participants 2.3.2.6 Environmental With the development of industry, businesses have been forced to implement cutting-edge recycling and waste management strategies due to the combination of rising degradation of the environment and innovations in technology Recycling has almost become the commercial standard in several nations Due to improved brand perception, this investment will also result in higher stakeholder satisfaction and a larger consumer base Having an attitude towards eco-friendly products is also crucial Marriott International could take the chance and implement green business strategies to gain the belief of stakeholders and clients Lastly, some countries had environmental regulations to avoid resource depletion To determine which resources (such as water, electricity, etc.) are rare or which species are threatened with extinction owing to excessive consumption, Marriott International must research the country's particular environmental regulations 2.3.3 EFE Matrix Marriott International's opportunities and threats are represented in the EFE matrix The impact and significance of these variables will be evaluated, along with the company's response to market opportunities and industry challenges KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED CRORES Opportunities 0.067 1-4 Developing smartphone apps to help speed up check-in for travelers 0.07 0.14 Announce plans for mobile room keys, mobile apps 0.06 0.18 Many consumers prefer particular brands 0.05 0.05 The improving economy, higher room prices, and a willingness to travel by both individuals and businesses 0.07 0.28 Over the last decade, hotel fees have risen by 100% 0.08 0.32 Favorable geographical location 0.08 0.32 The individuals who run the hotel are required to pay franchise fees (usually a percentage of sales to the major brand company) 0.04 0.04 The acquisition of Delta Hotels is in line with Marriott’s plans to expand internationally, focused on emerging markets 0.06 0.06 Threats some hotels have made smart app technology updates over the past few years 0.06 0.12 Growth rates varied greatly between different regions and price points 0.09 0.27 With a large population, a growing middle-class population, and China’s growing tourism, the long-term outlook remains positive for China’s hotel industry 0.06 0.12 Many thousands of hotel/motels compete for travelers’ dollars 0.05 0.05 Hotel occupancy rates vary by location 0.1 0.3 New players have entered the market 0.07 0.21 Many emerging markets are struggling, strong dollar hurts overseas sales that are converted back to dollars 0.06 0.12 Total 1.00 2.58 It can be seen from the table that the most crucial elements for success in this business are "Favorable geographic location" and "Over the last decade, hotel fees have increased by 100%" as indicated by the 0.32 weight Also take notice of how well Marriott is managing "The improving economy, higher room prices, and a willingness to travel by both individuals and businesses." This implies that both geographic location and economic variables are crucial to the organization's success Finally, the total weighted score of 2.58 is above the average (midpoint) of 2.5, so Marriott International is doing pretty well, taking advantage of external opportunities and avoiding the threats facing the firm 2.4 Internal factor 2.4.1 IFE Matrix The IFE matrix will include Marriott’s strengths and weaknesses The table will also assess each factor's significance and impact at the same time Key internal factors Weight Rating Weighed score Strengths Implemented a new policy in customer service 0.2 0.8 The firm has numerous female executives, consistent with its exemplary record on workplace equality 0.15 0.6 Net income by segments grew slightly in segments 0.04 0.12 Policy reverses a long tradition of allowing customers to cancel their reservation “up to pm the day of arrival without penalty.” 0.08 0.24 Luxury demand and leisure destinations are strong segments 0.05 0.15 Add more hotels to expand exposure markets worldwide 0.07 0.28 Great financial potential 0.03 0.09 Marriott Hotels is one of the notable brands by property types 0.04 0.12 High sales in the premium segment 0.07 0.28 10 Marriott plans to focus on overseas markets 0.03 0.09 11 Marriott has plans to get into the more middle-class market as this demographic in China grows 0.04 0.12 Hotel demand in 2014–2015 has exceeded supply in many cities, giving hoteliers the upper hand 0.02 0.02 Big most rival hotels are staying the course with traveler-friendly cancellation policies 0.01 0.01 The majority of Marriott’s properties are franchised 0.05 0.05 Total liabilities increased 10,4% from 2013 to 2014 0.1 0.2 Marriott is the largest hotel operator in Beijing and Shanghai, but not in China as a whole 0.02 0.02 Weaknesses Total 3.19 Firstly, there are 11 strength factors listed in the table of strengthening and evaluate how important each factor is for the company to succeed It can be seen that “Implemented a new policy in customer service” and “The firm has numerous female executives, consistent with its exemplary record on workplace equality” are the most important factors After setting the rating, the company is doing well the most in rating in and well responding to these factors Meanwhile, “Data is not strictly protected” is the most significant weakness of Marriott With the dramatic development of technology, if the company does not improve this weakness, many customers will choose other options of accommodation 2.4.2 Resource Base Model 2.4.2.1 Resources 2.4.2.1.1 Tangible resources: In regard to the company's financial resources, the shortterm coefficient in 2020 is 0.49, up 4.255% from 2019 (short-term assets increase, short-term debt decreases), when analyzing the company's capacity to repay debt Due to the COVID 19 pandemic, the company's capacity to generate internal capital will decline in 2022 while total profit will rise This demonstrates that neither the stock nor the asset is independently profitable Investment return dropped from 11,9351% to -2.7717% Followed by the organization structure, Marriott International operates from a regional organizational structure and it is currently the largest hotel company in the world with more than 4,100 properties in over 100 countries and territories around the world It includes all equipment owned by the corporation for the purpose of manufacturing, providing products and services It provides Event Services and Technology, Audio Visual Equipment, and Business services Moreover, it includes raw materials and supporting products and materials Marriott International uses to manufacture its products and services Finally, in terms of technology resources, it provides reimagined Spaces That Meet Customer’s needs, Marriott Bonvoy app, services app, etc Marriott International has protected and patented not only its production methods, goods, and services, but also the R&D work it does Through plagiarism and other forms of infringement, Marriott International is being targeted Marriott International can build a powerful brand identity and avoid others from stealing or harming its brand by protecting its trademarks This makes it simple for consumers to recognize and separate Marriott International's goods and services from those of its competitors Additionally, customers benefit from the trademarks by feeling more secure and at ease about making decisions because they know they are receiving a genuine item from a reputable business To keep and increase its market share, Marriott International must concentrate on safeguarding its trademarks 2.4.2.1.2 Intangible resources: Firstly, the human resources department of Marriott International puts a lot of emphasis on fostering excellent workplace relationships and employer-employee relationships This is especially important in the restaurant and hotel industry, where a company's success depends on the happiness and wellbeing of its staff members The department is also concentrating on developing an open and diverse atmosphere where all workers feel valued, respected, and supported Moreover, the frameworks that define the human resources to be used in Marriott's operations are crucially developed by the managers of human resources of the business Additionally, the performance of Marriott International's human resource management depends on organizational routines These routines have established patterns of behavior and actions that direct employees' actions and support the development of an excellent culture across the entire company 2.4.2.2 Capabilities (VRIO analysis) and Core Competencies Resource Valuabl e Rar e Inimitabl Organize e d Competitive Performanc Consequenc e e Implication s Financial resources Y N N N Competitive Average parity returns Organization al Resources Y Y N Y Temporary competitive advantage Above average to average returns Physical resources Y Y N Y Temporary competitive parity Above average returns to average returns Technologica Y l Resources N Y Y Temporary competitive Above average to advantage average returns Human Resources Y Y N Y Temporary competitive advantage Above average to average returns Innovation Resources Y Y Y Y Sustainable competitive advantage Above average returns Reputation Resources Y Y N Y Temporary competitive advantage Above average to average returns 2.4.3 VRIN/VRIO 2.4.3.1 Valuable There are significant parts are social responsibilities, brand value and Innovation Marriott International is aware that providing customers highquality services that meet or surpass their expectations is the key to sustained success in the tourism industry The business has established an established reputation with customers by providing top-notch service, cozy lodgings, and a variety of amenities according to all its brands Due to this, there is a high degree of repeat business and customer loyalty, as well as positive word-of-mouth recommendations Another significant reputational advantage for Marriott International is its brand name Customers can choose the brand that suits their travel needs from the biggest and most compelling brand portfolio in the hospitality sector In addition to its reputation with customers, Marriott International places a high value on its reputation with suppliers Franchisees must follow the firm's strict quality and service standards as well as its structural and design standards This guarantees that regardless of location or ownership, all properties meet the high standards established by the business 2.4.3.2 Rare Marriott International has several unique qualities that have helped it succeed as a global company First off, Marriott International has a unique quality given that it is present in over 80 different nations and regions Second, Marriott International is a business that takes risks This distinctive quality is significant because it empowers the business to take on new difficulties and achieve ambitious growth objectives To be able to achieve its long-term development goals, Marriott International has demonstrated that it is willing to take on investments in brand-new areas and markets, even if they are uncharted or unproven The third point is that Marriott International demonstrates a high degree of adaptability The business works in various cultures that have different customs, practices, and religions because it is a multinational corporation 2.4.3.3 Inimitable Marriott International stands out as an expert in the restaurant and hotel industry due to its unique business technology and strategy vision An important achievement was the development and launch of its check-in app at all 4,000 of its hotels globally Avoiding standard lines at the entrance while receiving messages about available rooms, guests can have a better experience generally Additionally, in 2013, the organization received $1.25 billion in bookings thanks to the mobile app, demonstrating the significant financial benefits of its technological advancements The long-term strategy developed by Marriott International to add more than 5,000 hotels globally, with a concentration on international markets such as Asia, the Middle East, and Africa, is also unsurpassed The company's acquisition of Protea in South Africa, which allowed it to experience compound growth rates of 25% in both the Middle East and Africa from 2013 to 2017, is evidence of the company's focus on international growth 2.4.3.4 Organized A division by region organizational chart is implemented by Marriott Observe how the company has many female leaders, which is consistent with its outstanding record on workplace equality 2.5 CPM The Competitive Profile Matrix (CPM) compares Marriott with its competitors which are Hilton and InterContinental and then has 13 critical factors The information was weighted on the importance in the industry Marriott Critical success factors Hilton Starwood Weight Rating Score Rating Score Rating Score Brand Reputation 0,1 0,4 0,3 0,2 Infrastructure 0,08 0,32 0,16 0,24 Quality Customer Service 0,1 0,2 0,3 0,4 Customer Loyalty 0,08 0,32 0,24 0,16 Geographical Range 0,07 0,14 0,21 0,28 Global Expansion 0,07 0,28 0,21 0,14 Price Competitiveness 0,08 0,16 0,32 0,24 Market Share 0,07 0,21 0,28 0,14 Profitability (EPS ratio) 0,07 0,21 0,07 0,28 Advertising 0,06 0,12 0,18 0,06 Ability To Cope with Change 0,08 0,24 0,16 0,24 Financial Position 0,07 0,28 0,21 0,14 Technology 0,07 0,28 0,14 0,21 Total 3,16 2,78 2,73 It can be seen that the total CPM score for Marriott International is highest As a result, Marriott is the number one in its industry To be more specific, brand reputation is based on customer satisfaction index on a scale of to 100 According to the average data updated over the years in the US, it shows that Marriott's score is still higher (Marriott: 84, Hilton: 79, Starwood: 77), about the infrastructure, Guinness World Records recognized Marriott Dubai as the tallest hotel in the world in 2012, so it makes sense when infrastructure score of Marriott being the highest Moreover, Marriott has 123 thousand full-time employees, Marriott really lacking in loyal and dedicated employees, which leads to a decline in service quality while Hilton and Starwood have 152 thousand and 180,000 full-time employees Customer loyalty for Marriott is still greater than that of Hilton and Starwood by the number of guests who review through TripAdvisor (Marriott: more than 10 thousand, Hilton: more than thousand, Starwood: more than thousand) Coming to geographical range, Marriott covers more than 80 countries, not as many as Hilton with 91 countries and Starwood with 100 countries However, Marriott's global expansion is larger than rival hotels when it owns more than 4,100 hotels and more than 700 thousand rooms In each segment, Hilton still offers a stable price of more than million dong for an average room in contrast to Marriott's more than million and Starwood's more than million In market share, Hilton leads with 5% market share, Marriott 4.5%, and Starwood 1.4% They are followed by Profitability (EPS ratio), Marriott's earnings per share are steady ($2.35), Starwood is pretty high ($3.41) and Hilton is low ($0.56) In terms of ability to cope with change, Marriott and Starwood remained stable after Covid 19, Marriott earned $ 1.7 million after months and Hilton temporarily closed some establishments It can be seen in financial position, Marriott's net income leads with $753 million, followed by Hilton $673 million and Starwood $633 million Finally, Marriott developed the technology before Hilton and Marriott Since 2013, they have launched their own check-in app 2.6 Strategy of company 2.6.1 SWOT Matrix Using methods of analyzing internal and external factors, competitors to create swot Matrix (S: Strengths) (W: Weaknesses) S1: The distribution system is W1: Marriott has a difficulty in relationships wide across the countries with the law S2: Great financial potential S3: Multiple customer segments W2: Data is not strictly protected W3: Marriott is a family-owned business, young generations are the future of the S4: High sales in the premium company segment W4: Facing many negative criticisms that S5: Service satisfaction rate is affect the brand image high W5: Loss of quality control in franchised S6: The membership program properties system is synchronized S7: Continuous innovation S8: Expand strategic partnerships (O: Opportunities) (T: Threats) O1: Improving economy, demand T1: Different between regions and price for traveling increasing points O2: Hotel fee growth O3: Favorable location T2: New players joining the market geographic T3: Hotel occupancy rates vary by location O4: Announce plans for mobile room keys, mobile apps 2.6.2 TOWS Matrix Find methods and strategies for companies to achieve high efficiency by enhancing strengths, seizing opportunities, and dealing with weaknesses based on the factors on the swot table SO strategies WO strategies Firstly, due to S1, S3, O3, O1, there should be Continuous growth in North America, opening new hotels in China for the needs of the middle class, and to anticipate the growth for the future Because the North American FullService segment has twice the revenue of the Limited-Service segment, yet the Limited-Service segment net income was slightly more, Marriott is more focused on the luxury market in China, but has plans to get into the more Firstly, owing to W5, O4 which are loss of quality control in franchised properties and announced plans for mobile room keys, mobile apps, they can protect the loss of quality from franchise by implementing better information systems Moreover, they can protect the client data by implementing better information systems according to W2, O4 Starwood, for example, requires the phone to touch a pad on the outside of