Reference no: EM132381718

Question

Can you please proof read the following analysis?

Introduction

The case study of "Marriott International: The Next 90 Years" represents real-life issues in the world of business dealing through practical experiences. John Willard Marriott started with a root beer stand in 1927 and continued his journey with restaurants, and inflight catering before entering the hotel /hospitality industry in 1957. By 1975 Marriott owned thirty-six hotels, in 2015, Marriott had nineteen brands, 2016, thirty brands under its umbrella. In 2017 Marriott was recognized as the top fifty innovative companies in the world.

Challenge and Opportunity

Marriott faces challenges with the emergent of Airbnb and HomeAway. A home-sharing online marketplace. Home-sharing is a new type of competition, one that the hotel industry, including Marriott, had not encountered until 2008 when Airbnb started. The challenge is Airbnb and HomeAway do not own the structures that they offer on their respective websites. Therefore Airbnb and HomeAway have no responsibility, liability, nor accrue maintenance cost for the properties, which is a primary factor for its low operating cost that allows Airbnb and HomeAway to undercut hotel rates in most locations. The opportunity for Marriott is to enter the market with the same concept but offer different options. By targeting an audience that wants a unique experience, as well as the security and cleanliness of a hotel, this will be accomplished with the Differentiation strategy. By using the Differentiation strategy, Marriott could purchase properties (homes) in desired locations and offer exclusive stays, which combined with PlacePass Marriott can deliver uniqueness and high-quality something that the competition does not provide. By controlling the booking process and the availability of the residence, Marriott can assure the customer a quality stay. Also, with the Differentiation strategy, the company does not have to sacrifice reputation, quality, or price within its current hotel/hospitality industry while competing with the other online marketplace companies. Marriott could also use the Diversification Strategy; Marriott can focus on the hospitality and customer service of its new adventure that gives them a competitive advantage in the hotel industry.

External AnalysisNatural Environment

Natural environmental factors affect operations of Marriott while it conducts its business operations on an international stage. The company reduced its carbon emissions by relying on paper-less technologies through online reservation facilities. The company has also implemented "Goji Kitchen concept" in its hotels situated in Asia-specific regions which and allows the company to ensure that it does not negatively impact the environment by reducing food wastage (Gao, Mattila, & Lee, 2016).

Societal Environment

Using the Issues Priority Matrix, managers can identify emerging trends, that will have an impact on the corporation. The threat is the advancement of technology; Airbnb uses technology as its primary platform; this should be High - High on the IPM for Marriott. Making improvements and investing in a robust computer network infrastructure, and online platforms such as PlacePass, Marriott can compete in the technological aspect of the industry. The medium priority would be to research what demographic is using an online marketplace and online travel agents and target them. The low priority is the type of accommodations being offered by Airbnb and HomeAway.

Industry Environment

Marriott International is experiencing the situation of demand and supply being unstable and is not the only issue. The surplus supply of buyers and the pallet of options as well as the threat of a substitute product like Airbnb will reduce profits for Marriott by undercutting the hotel's rates. The impact of Airbnb has not been profound on the hotel industry in the first phase of its business, particularly Marriott, according to Arne Sorenson, CEO of Marriott (Farronato & Pisano, 2018). Sorenson also thinks Airbnb is selling a different product, but when polled, 42% of Airbnb guests when traveling would have stayed in a hotel if not for Airbnb. (Farronato & Pisano, 2018) Airbnb does not have the scrutiny of Government rules and regulation as that of the hotel/hospitality industry, and until such laws are imposed to the home-sharing industry, Airbnb will continue to grow and expand into new markets.

Internal AnalysisValue Chain

The support activities in the value chain of Marriott includes technological policies; the company has developed its IT infrastructure to compete with organizations such as Airbnb by ensuring that its customers can make their bookings online. The customer's satisfaction level is also improved by the company through the implementation of effective IT practices. Another supporting activity is the human resource management (HRM) through which the company can match associates with the proper job description to focuses on delivering high-quality services to its guests which are the company's center of gravity, and they do it better than other companies such as Hilton. Marketing is a vital part of the value chain of Marriott through which the company ensures that it reaches a broad audience while highlighting its key features (Vrkljan, Bartoluci, & Cižmar, 2017).

Capabilities

The strategic tool used to analyze the skills of Marriott is the VRIO framework by listing internal resources. These internal resources include staff, which are not commonly used by the competitors, bring out the value in the organization. Marriott analyzed the value (V), rareness (R), imitability (I) and organization (O) measure highly linked to resource for long-term competitive advantage. Marriott's Value is its brand name, brand loyalty, service quality, and reputation, which is a competitive advantage. Their rareness is employee loyalty and commitment; their turnover rate is the lowest in the industry, In 2017, 107,038 new hires were made, and global voluntary turnover (including retirements) was 19%.  (2018 Server 360 Report, 2018). It is hard to imitate Marriott's IT systems and innovation, service quality and economies of scale. Marriott's ability to assemble and coordinate resources such as management systems, processes, structures, and culture effectively gives them a sustained competitive advantage.

Competencies and competitive advantage

The Boston Consulting Group (BCG) Matrix is a strategic tool used in business to decide investment strategically depending on the market growth and market share increment of the company. The BCG Matrix for Marriott International will help in implementing the business-level strategies for its business units. The analysis will first identify where the strategic business units of Marriott International fall within the BCG Matrix for Marriott International. Marriott Internation needs to identify the sets of business consists of cash cows, question marks, dogs, and stars. The implementation of strategies in the business is dependent on the position of the company in the market. This matrix is used for product and market development, market saturation, investment, and expansion. The changing competitive aspects are used to attain a competitive advantage for the development of practical and actionable solutions (Evans, 2015). It includes VRIO measures for competitive advantage and by activities related to value activities. The business strategy is used for the involvement of the company's market spaces recognition for creating a competition of the company unconnected by coming up with new products through innovation.  

Recommendations

My recommendation is the organization implements a corporate growth strategy by expanding into the online marketplace while still operating Marriott International. Marriott is always looking to grow, with the stellar reputation, loyal customer base, and the IT infrastructure upgrade while lowering the rates below Airbnb and HomeAway, Marriott will penetrate the market and increase its market shares.

By growing horizontally, Marriott can offer their customers another option and experience. Marriott could also expand operations both globally and domestically through mergers and acquisitions, which will allow them to reach the younger generation. It will help the company continue its growth strategy by an increase in revenues, and gain market shares by leveraging operational expanses.

On the business level, my recommendation is the cost leadership strategy. Cost leadership strategy will allow the company to address its critical challenges while generating a competitive advantage. With the help of this business-level strategy, the company comes up with solutions that can be connected to marketing as a business unit assuming the role of manager (Song & Kang, 2019). The company should implement cost leadership strategy to attain a competitive advantage which will allow the organization to provide fierce competition to Airbnb, Hilton, Sheraton, and Expedia.  The company should reduce the prices points of its loyalty program to increase the number of customers due to societal challenges. In this regard, the company can rely on its IT infrastructure and HRM capabilities to generate a competitive advantage while ensuring that the prices of its services are low. The natural environmental factors implemented by the company to reduce food waste and carbon emissions will enable it to provide intense competition to its major competitors including Hilton, Airbnb, and Expedia.

Conclusion

To conclude, Marriott International: is to analyze the challenges and opportunities by determining the environment of the company. It is done by applying strategic tools and strategies for the development of the company. It is recommended that the organization should adopt growth and cost leadership strategies to address critical challenges related to its internal and external environment to provide fierce competition while sustaining its growth in the hotel industry.