1. Table of Contents
TASK 1:
Introduction 1
Environmental analysis 2
Strategic formulation: 3
Theories and models for strategic planning: 5
Important Theories & strategy formulation 6
TASK 2
Suggested Strategic planning model for Marriott 8
Assessment: 8
Baseline 9
Components 11
Down to specifics 11
Evaluate 12
Reference 14
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2. TASK 1:
Introduction
The tourism and hospitality is one of the growing industries. The growth of this industry can be
predicted by the fact that almost 72.4 million jobs have been created within this industry.
Although many of us have been the tourists at some instance in their life even then defining the
tourism is still considered to be one the hardest task. In the simplest way we can say that tourism
is the activity of a person or group who travels to and stays outside their routine and usual
working environment for the purpose of relaxation, leisure or business. There are a number of
competitors competing in the market to serve for the tourism; Marriott International is one of
them (www.marriott.co.uk). The strategic planning will be discussed keeping in view the
environment of Marriott International.
The interesting fact of tourism like many other industry and business, it demands the ability to
regularly change with the changing needs of the customers. The most highlighted factors of the
tourism are the satisfaction of the customers, the safety and enjoyment of the customers. (Barton
and Sandy 1995).
The diversity of the portions of the overall tourism makes it more favorable for growth.
Reasons for tourism growth:
Income increase
Paid holidays
Developed transportations
More vocations and holidays
Less cost flights and travels.
Economic growth of the country
Due to change in life style as people love to tour more exotic and unusual places.
Strategic planning for Selected Organization:
Marriott International
The contribution of the hotels and lodgings cannot be ignored in tourism. The most important
feature of the tourists’ services providers is the hospitality. If we name the international hotels
we can count them on fingers. Among the list of these distinctive hotels is the Marriott
International. The data and facts related to Marriott are listed below that shapes the position of
the Marriott International. (Morgan et al 1994)
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3. Mission statement:
“Our mission is to become the leaders in the Hospitality services and strives to get it through
the energy of serving the culture”
Environmental analysis
To develop the business strategies and making suggestion to the needs of Marriott
International that the existing position of the hotel must be uncovered and the competitors of
the hotel must also be studied. This particular feature is called the environment analysis. In
the simplest words we can say that the factors that affect the organization from within and the
factors that affect the efforts of the organization from outside, these factors are categorized as
internal and external factors. Two most accepted techniques are SWOT analysis and PEST
analysis. The first one is related to the Strengths, Weaknesses, Opportunities and Threats.
Whereas the second one is related to the Political, economical, Social and technological.
PEST is more related to external factors and does not provide a detailed assistance for the
internal factors that is why the SWOT analysis is select for the strategy formulation of the
Marriott for the purpose of tourism and hospitality. (Anderson et al 1992)
Internal Analysis:
These are the factor which are more controllable and found inside the organization. These
factors can be explored by studying own organization and in our case it is Marriot
international. A general discussion is done here which will be summarized as a report in the
later section. After studying the secondary data and justifying it by the primary data it is
found that the following points can be regarded as the strengths of the Marriott
International. Dwyer et al (1987)
Strengths:
The Marriott is enjoying a good volume of strengths and that is an edge. They are in good a
financial condition that is why they do not feel hesitation while investing. They have got a
good wide spread business and can show their presence around the world. The industry of
hotel and business is highly saturated but Marriott is leading the business. The hotel has
given franchise to many other businessman and organizations. The website is quite
attractive and informative. The departments are supported by a focused effort; the
fruitless and objective less efforts are not made. The aspect of retaining the culture is made
possible even in the situation of leading the product innovation. The struggle is adopted to
create the positioning of hospitality. People recognize the brand of the Marriott that shows
good brand equity. With such a large number of strengths the hotel can adopt any strategy
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4. that want to as all the aspects of the business are covered by strengths. (Anderson and James
1990)
Weaknesses:
While discussing the internal factors sometimes the weakness are more valuable to explore as
they let the organization know that what factors are the weaker factors to build their strategy
on. The Marriott International has focused themselves on a very few market especially US
and Europe and has not explored the other markets in detail. The study of the Marriott
International Hotel showed that focusing on a very few markets means their selection
process is very tough. Over reliance on a single market is not felt well in any business and
Marriott International is relying more on the US market. They are true if saying that they
have distinguished their brands as the leading brands but that is more luxurious they are
depending more on these luxurious brands which may cause harm. They are not
launching low cost products and services means they are ignoring a specific segment of the
market. (Barnes and Howlett 1998)
External Analysis:
Threats
The tourism and hospitality is also facing many threats but some of threats are faced by the
Marriott International and these threats come from the external environment. These threats
can be seen either from the laws implemented by the state or from the competitor. The
changing economic situation of the regions and individual is also worth considering.
Marriott International has to live with a few non –popular brands so these brands must
also be either closed or updated. The business competitors are coming into business at a
rapid pace and to keep a distinguished look is quite difficult. As the Asia is showing a
better real estate situation as in Gulf and Arabian countries that is why the tourism and
hospitality business is shifting more the these regions. The effect of terrorism is also seen on
this industry as the cross boarder movement has become more difficult that is why less
people get a chance of traveling and hence a threat to this industry. (Barney and Jay 1991)
Opportunities
These are considered to be the most interesting and favorable points for any business. A true
exploration of these factors makes the growth and profit earning easy. There are two sort of
opportunities some of the opportunities are from the external environment like the fault of the
competitor, a favorable law by the government where as some of the opportunity is created
by the offensive attitude of the company. Simply we can say that it is like seeking for
opportunity and creating an opportunity. Marriott International is working on both types of
opportunities. They are exploring a fast growing market like Asia. They are also paying
attention to the products which are comparatively low in cost. The level that the Marriott
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5. international has gained has honored a very few Hotels that is why they have to opportunity
to keep up with this distinctive level. The people like the hotels who provide a more home
and family oriented atmosphere so it is an opportunity to exploit. (Berry and Leonard
1995)
Strategic formulation:
To formulate the strategic plan different tools can be used and against the same need there are
multiple strategies as discussed:
Cost leadership:
Cost leadership means becoming a leader in the market while calculating the costs of the
products and services being offered. The state of art architecture used in almost every hotel
of Marriott, the cooking and chefs hired by the Marriott International, the most experienced
managers makes it possible that the hotel is having a distinct position as a cost leader in the
hospitality and tourism industry.
Strategic alliances:
For the favor and betterment of the organization, business, society or industry strategic
alliances are established. The each business and organization keeps its identity whereas they
have mutual goals. Marriott International has also established many strategic alliances with
many of the organization to show their responsibility.
AFB (American foundation for the Blind)
AAHOA (American Asian Hotel Owners Association)
HRC (Human Rights campaign)
WPEO (Women President’s Educational Organization)
Value based strategies:
Marriott’s value based points of strategy are :
compensation package to attract and retain talent
Marriott, like other competitors, is facing increases in medical costs
Marriott has designed strategies to address the immediate issues
Marriott is managing high-risk illnesses, improve patient safety and increase
productivity
Market segmentation:
Marketing segmentation is the division and segregation of the MASS MARKET into more
easily identifiable groups called segments. Whereas an identified segment is further
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6. subdivided in smaller groups, these smaller portions of the market are called NICHE
MARKET. The Marriott International has identified the BUSINESS class are the primary
segment and from this business class they have identified Leisure demanded business class as
NICHE market. The future prospective is to target the most identified level of segmentation
and that is INDIVIDUAL MARKET. When taking about the geographical segmentation the
identified and targeted segments are ASIA and GULF. From the ASIA segment the NICHE
is INDIA and CHINA.
Work force competence development:
The Human resource department of the Marriott International has made it clear that there is
no compromise over the hiring and training of their team members. A tough and valid criteria
of employee selection is adopted and further more frequent trainings are undertaken to make
a competent work force.
Product portfolio reconfiguration:
The running list of products by the Marriott International in different market segments are:
Restaurants
Meeting rooms
Athletic facilities
Other up-scale amenities.
The identified list of newly introduced product and services portfolio of Marriott is:
Courtyard by Marriott
Fairfield Inn
Residence Inn
Towne Place Suites
Spring Hill Suits
Renaissance Hotels
Ritz Carlton
Benchmarking
The most easiest and less favorable is the benchmarking in which the organizations adopts
the successful strategies of the leading organization. This is a hit and trial strategies as it may
work as success or may go wrong. The environmental factors change with the time and that
is why due to this dynamic situation the results can be different. Against these pros and cons
many businesses are still adopting this business strategy. It is studied that being a leader
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7. Marriott International has never used any known benchmarking as they have established
their own.
Theories and models for strategic planning:
The engagement of the corporate strategies along with business strategies and accompanied by
the functional strategies makes up the competitive advantages of the businesses in the portfolio.
It is all because of these strategies the helps the business in determining the level to which a
particular strategic business unit is able to get and maintain a competitive advantage. The
competitive advantages are helpful in effecting the performance based on market and the
financial performance of the business. A number of competing and complementary theories in
industrial organization economics, business policy and strategy, and marketing provide valuable
insights into the determinants of performance at different levels. The theories and models they
are being engaged by the Marriott International are also included in the section and thoroughly
discussed. It includes: (Kelly S. 2000)
The model of structure-conduct-performance and this strategical model tries to explain
that why some of the industries produces more profit than the other competitors.
Another model is based upon the efficiency perspective and this model provides an
insight into the fact that why few of the firms in an industrial competition are more
profitable than the others.
The models and work of Micheal porter enables the strategy makers to have an insight to
the structural characteristics of the industry and combined with a business strategy
determines the business performance.
The next model is the resource based view and it tries to mention the firms who are
superior in term of skills and resources which are valuable, rare and known as non-
substitutable.
The matrix approaches for the portfolio analysis is also among the choices like BCG
matrix and the market attractiveness & business competitive position matrix and it helps
in determining why some of the businesses in the multi-business firms are more profit
earning.
The work of waterman and peters shower light on the content, processes and the
implementation factors that affects the long term performance of the business at a more
detailed level inspite of the type of industry. (Johns N. 1999).
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8. Important Theories & strategy formulation
Innovation Theory
The fact of innovation and the Research and development of the firm is taken a long term
profitability and it is also taken as a creative destruction due to the reason that the innovation
destroys the exiting products and services and creates new one. The innovation also changes the
nature of the competitive advantages and disturbs the market equilibrium. The arguments are
supported by many people who suggests that the environment of the business in purely dynamic
and that is why it is characterized with the help of uncertainty and non-equilibrium. The
innovation theory is taken as the key to success by the Marriott International. They view the
profit as the result of the discovery of the innovations. The discoveries like that do not mean to
implement a total change but may be a minor change. This minor change spans the idea of
providing a differential competitive advantage to the firm. It may compasses the better
formulation of the product, may be developing a new product or process. It may be the new
channel of distribution. Simply stating the scope of innovation is difficult to enclose under a
paragraph.
Product Quality Theory:
The strategy theory may be taken as the dependent of product quality but it is found very
difficult to define the product quality as different subjects define the product quality in different
ways. The term of product quality also covers the service quality. The people of marketing say
that the demands of the product make up the product quality. The scholars of economics view the
aspect of quality as anything other than price that influence the demands of the buyers if the
quality. The Innovation theory alone cannot serve any organization thoroughly as is the case with
Marriott International. Therefore the aspect of quality makes the product or service superior in
the market and is capable of changing the demand curve. It is obvious that the business demand a
high price of the product as well as a high market share but to make these two features
compatible with one other is a difficult task. If the business chooses to target a niche market by
providing a product or service at a high price and high quality product, they are excluded from
the routine market contest and market share dominance in a broader sense. The capability of the
business to ask for a higher price for offering a high quality is contingent on the ease by which
the consumer can define the product quality. That is why when the factor of quality is uncertain
then the price is taken to be the indicator of the quality. The above discussion creates a bi-
directional linkage between price and quality. The percept quality of the product influence the
price of the product in a positive sense and the price of the product influence the quality of the
product in case of less information. (Chaffey et al 2000)
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9. Market Pioneering:
The market pioneers are the business who explore the idea of innovation before the others and
becomes the first one to introduce a new idea, initiating new processes or plunge into the new
market. The history of the company enables them to consider themselves as the pioneer in the
tourism industry. Even if it is not recognized by many, even in most of the tourism aspect
Marriott International are the pioneers. The advantages of the market pioneer are clearly
evident and are associated with the development to the business strategies. In more detail we can
study as: (Jackson ad Barbara 1985)
TASK 2
Suggested Strategic planning model for Marriott International
A B C D E
Assessment Baseline Components Down to Specifics Evaluate
Assessment: at the Assessment stage the situation analysis is done and the current position of
the Marriott International is done whose details are as under:
Introduction
“Our mission is to become the leaders in the Hospitality services and strives to get it through
the energy of serving the culture”
Environmental analysis
Strengths:
Leading the industry
Had a strong brand equity
Good financial position
Well trained and experiences employees
Weaknesses:
Targeting a specific set of consumers
Ignoring new markets of Asia.
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10. Opportunities
Less competition in India, China and Gulf.
Better business situation in Gulf and India.
Gap for the new products and services.
Threats
Entrance of the new competitors
Threat of terrorism
Relying on single market
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11. Baseline
Significant issues
Almost every business is found to be at risk. Although, the nature of these risk may vary from
one another. What every be the type of risk or whatever be the level of risk that must be
considered and insured that the damage do not happen or if it happens causes a minimum loss. In
case of tourism and hotel business this risk management becomes even more important. The
management is required to hire an experienced employee with an expert team to take care of
many of such risk and they must be well trained and equipped in case of any disaster. Being one
of the leading service provider Marriott International is not found to be behind the other such
service providers. They have a well defined code of risk management and they are considering a
lot of things in this regard. To name a few:
Risk for the property
In well serving hotels the customer demands each and every comfort regarding proper
heating and cooling capability, proper plumbing and all things are now a day’s operate by
using electricity. The chance of fire cannot be ignored. The risk managements desire that
the plumbing of the building must be checked regularly and repaired without wasting any
time. The wiring of the compartment and building must be regularly checked and after
the expiry of any electronic equipment that should be replaced by a new one. The smoke
detectors, the fire alarms and sprinklers must be installed. The cost of these repair and
maintenance is found to be quite less than the damages that may occur due to fire or any
disaster. The same risks have been faced by the Marriott International.
Liability of the premises
The premises liability of a hotel is directly proportional to the number of visitor visiting
the site. That is the reason they have to implement and consider the same level of security
for their customers. The working of the elevators, the stairs, the grill on the balconies
should be checked regularly. The Marriott International has taken it as a liability and
they are true to take it as their core responsibility. The path ways must be tagged with
proper information of exits or hot or care etc. the services related to the laundry,
swimming pools, barber shop, exercise rooms, and other services requires separate
strategies for the management of the risks.
Liability of the automobile
In many hotels the management feels pleased to provide a pick and drop facility or driver
and vehicle for a recreational or business visit. The risk is felt to be high in these
situations. The customers are severed on the behalf of Marriott International therefore
the services related to automobile are also critical. Therefore strategies like conducting
investigation for the driver before hiring; getting the driving history before hiring and
hiring a senior driver for this purpose can minimize many risks.
Compensation for the workers.
The compensation for the workers must be considered clearly in the hospitality industry.
The operations like cleaning and operations may create harm to the employee that data
shows that most of time employees has to suffer risks like slipping and falling, the
injuries on back, the problem of sprain and strain, itching and reactions are the normal
risks associated with the employees of such services. To gain employees loyalty and to
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12. decrease the absentees, a proper compensation is taken as the basic HR activity by the
Marriott International. The proper tools and hygienic measures must be adopted to
prevent the employees from such risks.
These are the risk management tools which are seen to be adopted by the Marriott international.
But depending upon the type of business and industry these types of risks and the strategies for
managing them may change.
Ethical issues:
In the above section the expected strategies for the Marriott International have been sorted and
collected. A very critical question arises that do some of the strategies causes damage to the
business ethics. The answer is “YES” but at the same time the ethics of the business forces the
decision makers that such strategies must be changed and refreshed in the favor the ethical
activities. it is often seen the ethical consideration arrives at a risk due to the financial problems
and at the same time it is practically very difficult to consider in the ethical way when the
organization is found in problem. There are some of the ethical issues which are needed to be
discussed like (Martha and Bob 1999)
Product purchased only once:
There are some products which are needed to be bought only once by the buyer and the
life cycle of the product is too short that the life cycle ends before the word of mouth
reaches the other buyers. Many businesses erect their strategies on such issues but the
Marriot has always denied such strategies even for the products which are bought or
served for only one time, because they weight more the loyalty of the consumer rather
than profits. But the Marriott International is not recommended to rely on this strategy
and the business like tourism and hospitality does not afford to do so.
The durability of the product:
There are some products or services that do show durability at and after the purchase of
the product but the life of the durability is short. The limitation and disadvantages of such
products rise after some time and in the mean while the business achieves their short term
goals. The international fame is not surly obtained by using such strategies but to avoid
such strategies. This is what implemented by Marriott International. (Carpenter and
Gregory 1987)
Hubris
The strategies are mostly developed and implemented by the top management, therefore
some time they also start thinking unethically, by giving more percentage of the benefits
to the top management rather than a proper distribution of compensations and benefits.
The HRM department of the Marriott International is found intelligent enough to
consider such unethical activities
Ownership of information:
The customer provide their personal information like phone numbers, addresses, date of
birth, the close circuit cameras do capture their snaps too. The question is that who is the
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13. owner of this data the hotel or the consumer. Marriott International is using information
technology like no one other has used that is the reason to secure the information of the
organization as well as of the consumer has became an ethical requirement. The truest
answer is that the data belongs to the consumer and it is the ethical responsibility of the
hotel to protect and secure that data from some unauthorized access. (Rohit and John
2000)
Gap
Every new product and service is the result of identified gaps in the demands of consumer and
offers of the business. The same is identified by the study for Marriott International.
New products and services.
Better services regarding security.
Better learning of the culture of the new markets.
Components
Goals and Objectives (Marriott International)
Profitability strategies
A better property management
Rather than owning the properties leasing is more recommended.
The investment should be made in the projects that increase the value of the
stakeholders.
The use of debt in the capital structure of the corporation must be optimized.
Human capital strategies (Marriott International)
Assigning right person to the right job.
Going just beyond the pay checks
The working environment must be caring for the employee
Customer strategies (Marriott International)
Sales according to the strategies.
Attempting to accommodate the customer with a one step fashion.
Internet strategies (Marriott International)
The web page must guarantee the user for the best available rates.
The web user must have a tension and hassle free browsing and surfing
The price details must be transparent with no ambiguity.
A partnership must be established with the 3rd party website
Down to specifics
Action plans
There are many ways of arriving at the action plans. Some of the organization adopts to
use their strengths to exploit the opportunities. Some like to work on their strength in
order to overcome their threats.
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14. Strengths – Opportunities:
The strength of the business is that they have got enough financial support from their
financial situation and the opportunity is seen in the Asian region to grow the business
that is why the Marriott International must go for acquiring new locations in Asia. They
have good human resource and their new products have become successful most of the
time that is why they must develop new product and services especially for the products
and services that ate affordable for the middle and upper middle class. The world and the
societies are paying more attention to the environment friendly efforts of any business so
the Marriot can adopt the action plan that creates the image of the environment friendly
company. Therefore the construction and architectural work must be done that makes the
feature of environment friend as high as possible. The Marriott International is observed
to be implementing the same action plan most the time. They have adopted and they are
adopting their strengths for the utilization of the opportunities in their favor. The start of
the new business in Philippines and Gulf and other regions is the example of such action
plans. They have also expanded their business by franchising many of the people for the
Marriott International. (Bharadwaj et al 1993)
Strengths – threats:
One of the other action plans is to use their strengths in order to snub the threats which
are going against their normal and expected working. Not always but some times it is
seen that Marriot international has freely used the action plans against the threats and
they have remained successful. Using their strengths of the dedicated human force that
have overcame the threats of loss the cost effectiveness as they have achieved the target
at a corporate level. They have learned the art of struggling in the present and enjoying in
the future and they are implementing the same rule. It was smelled that the franchisee are
losing hope and energy in the competitive market and the Marriott International has
provided financial and experts help in order to support them in the competitive market.
The threat of being attacked by the terrorist around the world as a threat the Marriott
International has started employing the local employee with the support of the local state
and government that is why the situation for the Marriott International has changed. The
social work is also kept at the priority in order to win the moral support of the local
people. (Buttle F.B. 1996)
Evaluate
The organization under discussion enjoys a good position among their competitors while serving through
the rules of hospitality and promoting the tourism. All the business strategy aspect are wide open to be
used but some of the strategies and theories are needed to be twisted hard to make them harmonize with
the vision and mission of the Hotel (Marriott International). The study of the secondary data via
research papers, journals and case study shows that the hotel is adopting the theories and model of
Innovation and Product Quality. The primary data uncovered the belief of the Marriott International
team members (employees) that while adopting the above models and theories they are covering the
remaining models automatically. As the innovation makes them pioneer in many of the market segments,
the processes and the new products. They have defined the product quality in terms of customer
satisfaction and managing the same.
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15. The above section is related to the general aspect of the business strategy and analysis but in the
preceding section the general terms are made specific. In this section the Marriott International would
be specifically discussed. Let us start with the environmental analysis. (Berthon et al 2003)
Strategies and operational conflicts:
The strategies are made by the top management and acted upon by the middle and low level
management. Mostly it is believed by the middle and low level management that the top chairs
are unaware of the challenging and difficult nature of the strategies and in such reason a conflict
occurs between the strategies and their operations. The solution of such problems is quite easy to
be implemented. It is the responsibility of the HRM to convey and communicate the strategy to
the all level of management and seek suggestion from them regarding such strategies. If there
exists any in-acceptability that should be discussed and must be cleared to the subordinated
before their implementation. In these situations the operational conflicts will not occur with the
strategies of the organization.
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