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Executive Summary: Marriott International, Inc.
After conducting an in depth analysis of Marriott International, Inc. it can be
concluded that it would be most beneficial to the firm to continue with its current strategy of
differentiating offerings. Extensive research on Marriott as a company, the hotel industry,
current trends, and several other strategic aspects displayed throughout this summary led to this
conclusion. The following four analysis served as the main cornerstones to this conclusion.
Industry Analysis: By conducting a competitive factors framework analysis, it is evident that
Marriott International is performing better in maximizing the most key CSFs than Hyatt,
Starwood, and Hilton by varying degrees. Yet this variance is slight, which exemplifies how
competitive and tight knit this strategic group truly is, hence the high degree of rivalry. Marriott’s
success in this CFF stems from the firm’s ability to seize the most important opportunities being
franchising, developing environmentally friendly hotels, and properly handling the increase in
demand for hotel rooms. Also, mitigating the threat of undifferentiated offerings is crucial for
Marriott to focus on to set them apart and gain an advantage over competing firms in the luxury
strategic group. Each of these CSFs supports their current strategy of differentiating offerings.
Internal Analysis: As indicated in the IFF portion of the chart, a total score of 3.0 out of 4.0
was awarded to Marriott International, Inc. This indicates that Marriott’s management and
executives are utilizing their available resources and capabilities (R&Cs) efficiently and
effectively while also mitigating the detrimental effects of the R&Cs that the firm does not
possess. This high total score in the IFF was mainly attributed to Marriott’s success in its
distribution systems, environmentally consciousness, and diversified brand portfolio while also
properly mitigating the threats brought upon by struggling sales growth. In addition, Marriott’s
ability to legitimately address all aspects of VRIOS has led to this overall success as a firm.
Success in each of these essential aspects furthers Marriott’s current strategy to differentiate
their offerings.
Strategy Formulation Analysis: Each strategy gives Marriott the option to either increase
profits or increase market share. Their current strategy along with alternative strategies
appealing to younger more advanced generations and investing in customized offerings
results in the same competitive advantage with regards to the B-C framework. Each strategy
results in an increase in benefits which then leads to the option of increased price to increase
profits or competitive price to increase market share. The other alternative strategy of increasing
expansion efforts maintains benefits, but decreases costs. This gives Marriott the option to keep
a competitive price to increase profits or decrease price to increase market share. Overall, each
of these strategies result in the option for Marriott to either increase profits or increase market
share, which is ideal for the firm when deciding which of these strategies to pursue1 2.
Strategy Viability Analysis: The current strategy earned the most success overall and should
be maintained as a pursued strategy. This strategy of pursuing differentiated offerings
addresses the firm’s strengths and opportunities while also mitigating the main threats. This
strategy is consistent with the company’s mission to pursue excellence and put the people first as
well as its long-term objectives of providing strong and consistent product leadership and
experiencing steady market share growth. This indicates that this strategy is properly consistent
and aligned with all of the various aspects of Marriott mentioned throughout this analysis. In
conclusion, Marriott International’s current strategy of differentiating offerings is the most
aligned, sufficient, and viable strategy that has the least probability for failure and the best
chance for success and thus should be pursued.
2
Industry Analysis
Analysis Description: An industry study utilizes the strategic management process through
external analysis. An external analysis examines the opportunities, threats, issues, and
challenges that exist in the environment of a firm. Together these key components are called
critical success factors (CSFs). These CSFs are constructed through each of the player and
trend analyses that are derived from various analytical frameworks. Player analyses include
value chain analysis, value net analysis, strategic group mapping analysis, strategic canvas
analysis, and co-opetitive forces analysis. Trend analyses include industry evolution analysis,
DTLC analysis, political social trends analysis, international trends analysis, economic and
demographic trends analysis, and issue impact analysis.
Industry Description: The hotel industry provides offerings by accommodating its customers
with a room to stay in over some short-term period with the addition of living essentials such as
clean water, toiletries, bathroom facilities, and a bed. The key activities, derived from the value
chain analysis, related to all firms in the hotel industry are booking reservations and increasing
customer turnover rate3. In addition, key relationships, derived from the value net analysis, in
the hotel industry are identified through the dissecting of the customers, suppliers, competitors,
and complementors of various firms in the industry. By analyzing the hotel industry, three main
strategic groups were formed. These groups are labeled as luxury hotels, suitable hotels, and
economic hotels. Such strategic groups were formulated through the strategic group mapping
process. The luxury hotel strategic group includes Marriott International Inc., The Starwood
Hotels & Resorts, The Hyatt, and Hilton. These strategic groups are separated mainly by the
pursued competitive advantages of these different firms. What separates the luxury hotel
strategic group from the rest of the firms in the analysis is the group’s striving for a
differentiation advantage. Regarding player analyses, in the luxury hotel strategic group all
players share identical key activities in terms of reserving rooms and increasing customer
turnover and thus are ultimately undifferentiated. Also, players are grouped and distinguished
based on their sought after competitive advantages, which results in the creation of strategic
groups separated by mobility barriers. In addition, several key relationships exist amongst the
firms and customers, suppliers, competitors, and complementors that need to constantly be
maintained and improved. Regarding trend analyses in the luxury hotel strategic group, hotels
are in the maturity phase of industry evolution, but moving towards the reconfiguration stage due
to a lack of diversification and undifferentiated offerings resulting in a need for innovation. Also,
consumers are becoming more environmentally conscious so as a reaction firms are establishing
environmentally friendly and sustainable hotels. In addition, the global economy is picking up,
which results in a rise in demand for hotel rooms and the ability for customers to spend money.
Overall, the hotel industry is in a state of revival and growth4 5 6 7.
Competitive Factors Framework: The competitive factors framework analysis examines the
CSFs pertaining to the focal firm of a specific strategic group within an industry8. When
conducting a CFF analysis, each CSF is assigned a weight in percentage form based on its
relative importance. In addition, there are ratings for each firm’s individual performance with
regards to each CSF on a 1-4 scale. The firm with the highest rating is doing the best job
managing the critical success factors with respect to the other firms in the strategic group by
taking advantage of opportunities and mitigating threats and challenges9 10. Based on their
importance weight and consistent appearance through the external analysis the four most
important critical success factors for the hotel industry were identified below in a partial
competitive factors framework.
3
The 2 most relevant external CSFs to the firm’s current strategy of differentiating offerings are
discussed further below11.
1. Franchising: Franchising was identified as a trend in the luxury hotel strategic group through
the co-opetitive forces analysis. Franchising in the hotel industry involves allows large
companies to expand their portfolio, expand their market share, and gain a larger customer
base. Franchising leads to an extensive brand name as the main firm is able to offer different
levels of hotels and does not have to rely on one class of customers for revenue12. Franchising
has been and continues to be extremely important in the hotel industry, hence its 20% weight. It
is the most impactful way firms can gain a competitive advantage in this very tight strategic
group. Marriott International was assigned a rating of 4 because it operates under 18 different
names to date13. The other brands in the luxury strategic group were assigned lower scores
because of the lack of hotel brands and locations compared to Marriott14 15 16. By franchising
aggressively, Marriott is furthering its current strategy to differentiate their offerings. Each
one of the four firms in the luxury hotel strategic group is clearly taking advantage of this
opportunity on some level to expand their brand portfolio, increase market share, and gain a
larger customer base through the utilization of franchising, hence the large weight assigned.
2. Undifferentiated Offerings: The threat of undifferentiated offerings amongst the firms in the
luxury strategic group was identified through several analyses including the value chain
analysis, strategic group mapping analysis, industry evolution analysis, and co-opetitive
forces analysis. This threat is extremely important to the firms in the strategic group because
each firm is competing against each other over the same customer base, with the same offerings,
striving for the same differentiation advantage through product leadership. This external CSF is
given such an important weight of 25% because without any differentiation or product
leadership, each one of these luxury firms are basically interchangeable, which is exactly what
these companies want to avoid. Mitigating the threat of undifferentiated offerings thus also
directly furthers Marriott’s current strategy to differentiate their offerings. Marriott must
implement forms of innovation in order to head into the reconfiguration phase so that this
differentiation can occur. All firms received low ratings because there is still such similarity in
their offerings17 18 19 20. Overall, each firm stands to utilize creativity and innovation in order to
attain the desired competitive advantage of differentiation through product leadership, as the
firms in the luxurious strategic group are still extremely closely rivalled21.
Conclusion: By conducting a thorough competitive factors framework analysis, it is evident
that Marriott International is performing better in maximizing the most key CSFs than Hyatt,
Starwood, and Hilton by varying degrees. Yet this variance is slight, which exemplifies how
competitive and tight knit this strategic group truly is, hence the high degree of rivalry. Marriott’s
success in this CFF stems from the firm’s ability to seize the most important opportunities being
franchising, developing environmentally friendly hotels, and properly handling the increase in
demand for hotel rooms. Also, mitigating the threat of undifferentiated offerings is crucial for
Marriott to focus on to set them apart and gain an advantage over competing firms in the luxury
strategic group. Each of these CSFs supports their current strategy of differentiating offerings.
External CSFs
Key Trends - Opportunities: Marriott Hyatt Starwood Hilton Ave
20% 4 2 2 3 2.8
20% 4 4 1 2 2.8
10% 4 3 3 2 3.0
Key Trends - Issues / Challenges / Threats:
25% 1 1 2 1 1.3
75% 3.0 2.3 2.0 2.1 2.3
1
Relative importance of each CSF to the strategic group.
2
How well each company is able to take advantage of or addess each CSF.
Competitive Factors Framework: Luxury Hotel Strategic Group
Weight 1
Firm Ratings 2
Partial Performance Rating
a Franchising
b Development of environmentally friendly/sustainable hotels
c Increase in demand for hotel rooms
f Undifferentiated offerings
4
Internal Analysis
Analysis Description: In relation to the strategic management process, internal analysis is just
one aspect of the strategy crafting step of the SMP that focuses within the focal firm22. VRIOS
Analysis is the approach to internal analysis that involves the combination of several
frameworks and approaches collectively designed to provide a thorough exploration of the focal
firm’s resources and capabilities (R&Cs). The acronym VRIOS entails: Value creation (take
advantage of opportunities), how Rare it is (degree of commonality amongst rivals), how
Inimitable it is (likelihood of imitation), how controllable it is by the Organization (degree a firm
is organized to exploit the full competitive potential), and how Sustainable it is (holds value over
time). It is essential to coverall all aspects as a full VRIOS for an effective internal analysis23.
Company Description: Marriott International, Inc. is a leading global hospitality company
encompassed in a diversified hotel brand categorized in the luxury hotel strategic group24. The
company’s key offerings are a clean and satisfied short-term stay. The key activities include
booking reservations and customer turnover25. Marriott International was founded in 1971 and is
currently headquartered in Bethesda, Maryland26. There are 18 brands operating under Marriott
International that total over 4,000 locations holding nearly 700,000 rooms in 78 countries around
the world27. With this wide ranging diversified portfolio of hotel brands, Marriott International
can serve virtually and market of people, but mainly focuses on the middle to upper class
customers. Marriott’s top competitors, also located in the luxury hotel strategic group, are
Starwood Hotels & Resorts, Hyatt Hotels Corporation, and Hilton Hotels & Resorts28. Marriott
has attained great success in the hotel industry by means of a strong balance sheet, sound
management, and a history of industry leadership29 30 31 32 33.
Modified Internal Factors Framework/VRIOS Worksheet: The table below is a synthesized
combination of two vital frameworks being the VRIOS and the IFF. The IFF is used as a
summary to capture the key findings of the analyses, being the key R&Cs of the organization.
Similar to the CFF, the IFF in the internal analysis involves weighing and rating the key R&Cs of
the focal firm. In addition, the performance of the focal firm is then assessed with regards to how
well it is taking advantage of each existing R&C and handling each missing R&C. Each aspect
of VRIOS is addressed in the chart34. Based on an assessment of their importance and their
repeated appearance in the six analysis approaches of the external analysis, four existing and
missing R&Cs were identified as most important to Marriott and are provided below.
Ket R&C Weight Rating Valuable Rare Inimitable Organizational Sustainable
Many/Strong
Distribution
Systems
20% 4.0
Very valuable. Reach wide
variety of customers.
M itigates threats: of not
being able to reach
customers & depending on
one customer group.
Relatively rare. Not all
firms in luxury strategic
group pursuing. None
have accomplished as
many distribution
channels as M arriott.
Not easily imitable.
Very difficult,
expensive, & time
consuming to establish
the number, variety, &
quality of brands as
M arriott.
Very organizational. Utmost
importance to highest
ranking members of the
organization. Controlled
and benefitted most by
executives and upper level
managers.
Very sustainable.
Stable, continue to
grow, and even
expand further with
more hotel brands.
Supporting R&Cs
are numerous and of
a wide variety.
Environmentally
Conscious
12% 4.0
Valuable. Appeals to the
overall “ green” trend in
society. Fueled by rapid
advances in technology.
Establishes sustainable
buildings. Benefits from the
increase in environmentally
conscious consumers.
Relatively rare.
M arriott has 56 LEED
certified hotels, much
more than rivals. Rarity
may decrease in the
future.
Fairly inimitable.
Difficult, expensive, and
time consuming to copy
this R&C because of
vast amount of
technology.
Fairly organizational.
Technology, environment, &
innovation sectors, but still
involves executives.
Very sustainable.
Highly likely
supporting R&Cs &
investments will
come about as a
result: (green),
positive attention.
Diversified Brand
Portfolio
12% 3.5
Extremely valuable. Appeals
to wider variety & greater
number of customers.
M itigates threats: relying on
one class of customers.
Relatively rare.
M arriott’s 18 brands
much more than rivals.
Rivals aware of this
R&C, trying to pursue
more brands and catch
up, rivals are still
behind.
Highly inimitable.
Difficult, expensive,
time consuming,
resource exhausting for
rivals to attain the level
and breadth of success
as M arriott.
Highly organizational.
Pinnacle of M arriott's
organizational chart.
Decisions regarding
branding, franchising, &
expansion come from the
top executives. Utmost
importance to the most
powerful people in the
company.
Highly sustainable.
Highly likely
supporting R&Cs &
further investments
will result.
Struggling Sales
Growth
12% 2.0
Extremely valuable.
Challenges firm's ability to
market to its target
customers, pricing model,
quality of offerings, & overall
business model.
Rare. M arriott's sales
growth decreased
significantly from 2011-
2012, no other rivals
firms' sales decreased.
Relatively inimitable.
Inevitably cost time,
money, & resources to
improve sales.
Extremely organizational.
M arketing, advertising, &
finance. Concern to
executives of M arriott.
Not very
sustainable. Some
further investments
into R&D, marketing,
& pricing may occur.
Partial
Performance Rating
56% 3.0
5
35 36 37 38 39 40 41 42 43 44 45 46 47 48
Of these four top R&Cs, the two most worth mentioning are elaborated upon below.
1. Many/Strong Distribution Systems: The many and strong distribution systems of Marriott
International were identified through the value chain and value net49 50. In the hotel industry,
distribution is best accomplished through the occupation of numerous brands by a parent
company. Marriott International has utilized this R&C through the firm’s 18 different hotel
brands51 52 53 54. This is the most important R&C with a 20% weighting, which signifies that
abundant and strong distribution channels are extremely important to hotel chains such as
Marriott. Possessing such well diversified and stable distribution channels serves to be very
valuable. It allows firm to take advantage of the opportunity to reach a wide variety of
customers. It mitigates the threats of not being able to reach customers, having to depend on one
hotel or customer group for revenue, and customers going to competitors55 56 57 58. Marriott
International leverages this strength in an extraordinary manner, earning it a rating of 4. Marriott
has taken advantage of this R&C very well as it possesses the most distribution channels, 18, of
any of the firm's competitors by a substantial margin. Also, the firm's online reservation system
was one of the first of its kind and has only improved in recent years59 60 61 62.
2. Environmentally Conscious: This key existing R&C was identified through the DTLC
analysis63. Environmental consciousness entails implementing business practices that minimize a
firm's negative effect on the environment, while attempting to develop and execute sustainable
ways of conducting business. This R&C is fueled by rapid advances in technology that allow
hotel firms to implement "greener" strategies in an attempt to establish sustainable buildings that
minimally effect the environment in a negative way. Marriott International has implemented
these strategies before any rival firm did, with more variety and volume than others, and with the
most overall success64. In today's increasingly environmentally conscious society, anything
involving a movement towards being "greener" or more sustainable serves as a very important
trend, thus this R&C is assigned a 12% weight. This R&C is driven by the opportunity to appeal
to the overall trend in society of an increased importance and value on conducting business in
the most environmentally friendly way. This R&C tries to benefit from the increase in
environmentally conscious consumers, so firms are looking to take advantage of this opportunity
and appeal to this growing customer base and ultimately add value in that way. Marriott
possesses the most environmentally conscious facilities when compared to rivals. The firm has
56 LEED certified hotels, substantially more than any other hotel chain65 66. Marriott has taken
advantage of this R&C more than any other competing firm by a far margin, thus earning them a
4 rating. Marriott has appealed to the increasingly environmentally conscious consumer very
well as it is head and shoulders above the competition, which furthers their current strategy67.
Conclusion: As indicated in the IFF portion of the chart, a total score of 3.0 out of 4.0 was
awarded to Marriott International, Inc. This indicates that Marriott’s management and executives
are utilizing their available resources and capabilities (R&Cs) efficiently and effectively while
also mitigating the detrimental effects of the R&Cs that the firm does not possess. This high total
score in the IFF was mainly attributed to Marriott’s success in its distribution systems,
environmentally consciousness, and diversified brand portfolio while also properly mitigating
the threats brought upon by struggling sales growth. In addition, Marriott’s ability to legitimately
address all aspects of VRIOS has led to this overall success as a firm. Success in each of these
essential aspects furthers Marriott’s current strategy to differentiate their offerings.
6
Strategy Formulation Analysis
Analysis Description: Strategy formulation analysis entails conjoining the external analysis
and the internal analysis in order to support the development of strategy alternatives for the focal
firm. The process entails identifying potential alternative strategies. Next, a strategy canvas
analysis and strategy statement analysis are conducted to interpret further analysis of the
potential strategies. Completing these steps helps the analyst identify and understand the level of
success each strategy will have in the firm’s competitive industry.
Strategy Statement Analysis: Strategy statement analysis is the analysis used to assist an
analyst in evaluating strategies for completeness. A strategy is considered complete when it can
explain what a firms has available (what got- R&Cs), address its current context (what matters-
arenas), and seek to pursue some form of competitive advantage (what get- competitive
advantage). In other words, a complete strategy entails an explanation of what the firm has that
it seeks to leverage, what dimensions of competition it seeks to position itself against, and what it
hopes to accomplish as a result. Finally, a fourth component entails determining what specific
type of strategy is involved (how do it- strategy type). Strategy statement analysis requires
clearly defining and succinctly capturing each of the four aspects with regards to the potential
alternative strategies, to ensure that each is a compete strategy68. Provided below is a completed
strategy statement analysis conducted for Marriott International.
Marriott International competes in the luxury hotel strategic group, which is
characterized by a high degree of rivalry with little differentiation of offerings amongst the top
firms. Thus, current strategy Marriott is pursuing is aimed at differentiating their offerings.
Based on a comprehensive strategic analysis of Marriott International and the major hotel
industry focusing on the luxury strategic group, in addition to a strategy formulation sequence,
three potential alternative strategies were identified for the company and are elaborated on
further below as well as the current strategy69 70 71 72 73.
Strategy Arenas R&Cs Strategy Type Competitive Advantages
Alternative
strategies
Arenas intowhich R&Cs
are tobe applied
R&Cs the strategyseeks to
leverage or address
Specific type of strategy(e.g.,
intensive market penetration) B-Cexplanation of the strategy
Innovation. Technological
advancement. Product
leadership. Personalization.
Raise focus and attentionin
younger demographics.
[B- same, P- same, C- decr (inc profs) OR B- same,
P- decr, C- decr (inc mark share)] Market
diversification. Incr scope of offerings. More
availability and quality of brands, lower costs, larger
mark share, more profits, greater brand recognition.
[B- incr, P- incr, C- same (incrprofits)OR
B- incr, P- same, C- same (incrmark
share)]Incrperceived value, higher
price/higherprofits OR competitive
price/greatermarkershare.
[B- incr, P- incr, C- same (incrprof)OR B-
incr, P- same, C- same (incrmarkshare)]
Incrperceived value, higherprice/higher
profits OR competitive price/greater
markershare.
Intensive market penetration
Intensive market penetration.
Reduce threat ofhighdegree
ofrivalry. Raise value offirm.
Product diversification
strategy. Defensive strategy.
Strong brand recognition.
Strong financialposition. Strong
existing franchising prescence.
Innovation. Technological
advancement. Product
leadership.
Raise attention toward
customized offering
advancement. Reduce threat of
high degree of rivalry.
Uniqueness. Customization.
Technologicaladvancement.
Product leadership. Superior
offerings. Set market trend.
[B- incr, P- incr, C- same (incrprof)OR B-
incr, P- same, C- same (incrmarkshare)]
Incrperceived value, higherprice/higher
profits OR competitive price/greater
markershare.
Product diversification
strategy.
Strategy Statement Analysis: Marriott International, Inc.
Increase
Expansion
Efforts
Invest in
Customized
Offerings
Current
Strategy:
Differentiate
Offerings
Appeal to
Younger/
Advanced
Generatoins
Raise investment in
internationalmarkets. Broaden
prospective locationsearch.
7
1. Increasing Expansion Efforts focuses on leveraging Marriott’s existing franchising success
to further that initiative as well as developing hotels in untapped international locations. This
alternative strategy will help diversify the market, but also Marriott’s brand portfolio, locations,
and customer base. This will result in a larger market share, more profits, and greater brand
recognition. The effect on the B-C framework is mentioned above74.
2. Appealing to Younger and Advanced Generations seeks to allow the firm to use its vast
and numerous distribution channels and brands to reach out and raise attention of younger
demographics. This alternative strategy also helps Marriott pursue the differentiation competitive
advantage by taking the initiative to reach out to these non-ordinary customers to luxury hotels.
This will require innovation, technological advancement, and brilliant marketing in order to
touch these younger and more advanced generations in an attempt to lure them toward Marriott.
This would address one of Marriott’s rare weaknesses of lacking a diversified customer base, in
terms of age, by mainly catering to those over 30 years old. This poses as a challenging but
attainable alternative strategy for Marriott to pursue. The effect on the B-C framework is
mentioned above75.
3. Investing in Customized Offerings seeks to leverage Marriott’s advanced technology,
innovation, and personalization skills in order to minimize the weakness of little evolution in the
firm’s offerings and mitigate the threat of demand for customization. While being a defensive
strategy, this alternative strategy is also a product diversification strategy, thus it can also be
used to appeal to more technological inclined and personalized customers. The effect on the B-C
framework is mentioned above76.
4. Differentiating Offerings (Current Strategy) seeks to propel Marriott’s products and services
beyond the quality and uniqueness of its rival hotel brands. This strategy aims at setting Marriott
apart from the competition by providing offerings and an experience to its customers that is
exceptional, one of a kind, and memorable. By executing this initiative, Marriott expects
customers to be much more inclined to recommend their brand to others potential customers, as
well as remain loyal to the brand themselves. As an intensive market penetration strategy, the
firm is aiming to increase market share and raise the value of the firm in addition to reducing the
threat of a high degree of rivalry. Marriott has been striving to execute this strategy through
technological advancement, customization, and setting market trends in order to ultimately
provide superior offerings. The effect on the B-C framework is mentioned above77.
Conclusion: Each alternative strategy gives Marriott the option to either increase profits or
increase market share. Their current strategy along with alternative strategies appealing to
younger more advanced generations and investing in customized offerings results in the
same competitive advantage with regards to the B-C framework. Each strategy results in an
increase in benefits which then leads to the option of increased price to increase profits or
competitive price to increase market share. The other alternative strategy of increasing
expansion efforts maintains benefits, but decreases costs. This gives Marriott the option to keep
a competitive price to increase profits or decrease price to increase market share. Overall, each
of these strategies result in the option for Marriott to either increase profits or increase market
share, which is ideal for the firm when deciding which of these strategies to pursue78 79.
8
Strategy Viability Analysis
Analysis Description: Strategy viability analysis is a method analysts utilize to validate which
strategy is most viable to the focal firm. There are several key components that need to be
checked in order to determine the viability of a strategy. Overall, for a strategy to be viable it
must be aligned with the structure of “what matters, what got, and what get80.” This structure is
the basis for any strategy. For a strategy to be viable all of these aspects must be true81. First, a
strategy must be consistent with the firm’s mission statement and long-term objectives. It is also
required that a strategy is in alignment with the firm’s current strategy or goals in order to be
implementable. Next, the analysis requires the analyst to check the compatibility with its R&Cs,
Arenas, and CSFs. This essentially tries to determine how well each strategy matches these
various components. The next step in the strategy viability analysis is to determine each
strategy’s ability is in alignment with the company as a whole82. Analysts evaluate each strategy
along numerous analyses in order to justify each strategy’s viability with the focal firm. Based on
the overall score of these analyses, decision makers choose a proposed strategy in an attempt to
advance the firm’s overall success83. In essence, strategy viability analysis is aimed at
determining which strategy is the most viable strategy.
Risk Matrix Graphic: The risk matrix graphic is a visual framework that puts into perspective
the various proposed strategies with regards to being aligned with the present approach, the
intended focus, and the probability of failure. Such a tool clearly maps out where each strategy
lies in relation to each other and is extremely useful in visually putting in perspective the
alternative strategies so that a logical decision can be made. Below is the risk matrix graphic
conducted for the four strategies discussed throughout this portion of the analysis.
This risk matrix shows that the current strategy of differentiating offerings has the least
probability of failure when compared to the other alternative strategies. Obviously this strategy
was closest to the current strategy and present intended focus. This strategy has proven to be the
least risky, most aligned with Marriott’s goals, and has the most potential for success.
9
Summary Strategy Viability Analysis: In the final summary strategy viability analysis
below, overall scores are given to each strategy based on the final scores from each of the
various strategy viability analyses. Throughout the analysis, the current strategy pursued by
Marriott International Inc. is to differentiate offerings84.
Conclusion: After conducting a full extensive strategy viability analysis several conclusions
can be drawn. The current strategy earned the most success overall and should be maintained as
a pursued strategy. This strategy of pursuing differentiated offerings addresses the firm’s
strengths and opportunities while also mitigating the main threats. This strategy is consistent
with the company’s mission to pursue excellence and put the people first as well as its long-term
objectives of providing strong and consistent product leadership and experiencing steady market
share growth. The current strategy adheres to the various current political, social, and
technological trends as well by attempting to cater to each customer in a unique, personal, and
advanced fashion. This indicates that this strategy is properly consistent and aligned with all of
the various aspects of Marriott mentioned throughout this analysis. Increasing expansion
efforts posed as the most viable alternative strategy to the current as it also fulfilled most of
Marriott’s long-term objectives and overall company values. This alternative strategy also
performed above average in the remaining aspects of the summary strategy viability analysis, but
it was simply not as viable a strategy as the current. Investing in customized offerings was
neither a pure “hit or miss”, but rather in the middle of the road overall as an alternative strategy
to pursue. While this alternative strategy succeeded in being consistent with the company’s
mission, it failed to match with the company’s overall CSF profile. Appealing to younger and
more advanced generations matched the company’s R&C profile, but failed to be consistent
with the long-term objectives, have sufficient arenas of opportunity, and align with the
company’s approaches. Ultimately, this proved to be the least viable alternative strategy and
should not be pursued. In conclusion, Marriott International’s current strategy of
differentiating offerings is the most aligned, sufficient, and viable strategy that has the least
probability for failure and the best chance for success and thus should be pursued.
10
References
1 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 2 p. 1-12.
2 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 16: Strategy Formulation Analysis,p.1-21.
3 Google Finance. MarriottInternational Inc.
http://www.google.com/finance?q=NYSE%3AMAR&ei=ofZAUuCSGcLF0gHvgwE, accessed September 22, 2014.
4 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 3
5 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 4
6 Curcio,Brian.Check Up 3. MG 402 Business Policy.Loyola University Maryland.Fall 2014.
7 Curcio,Brian.Check Up 4. MG 402 Business Policy.Loyola University Maryland.Fall 2014.
8 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 14 p. 1-11.
9 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 14 p. 1-11.
10 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 14 p. 1-11.
11 Curcio,Brian.Check Up 8- External Analysis.MG402 Business Policy.Loyola University Maryland.Fall 2014.
12 "Luxury Hotel Franchises in theUS: Market Research Report." Luxury Hotel Franchises in theUS Market
Research. IBIS World,n.d. Web. 28 Oct. 2014. <http://www.ibisworld.com/industry/luxury-hotel-franchises.html>.
13 "Marriott Brands."MarriottInternational.MarriottInternational,n.d.Web. 3 Nov. 2014.
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16 "Our Brands."Hilton WorldwidePortfolio of Hotel Brands.Hilton Worlwide,n.d. Web. 03 Nov. 2014.
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BusinessTravelNews,23 June 2011.Web. 04 Nov. 2014.<http://www.businesstravelnews.com/Hotel-
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20 Writers,Staff. "Discover the Power of Innovation."Starwood Global Development. Starwood Hotels and Resorts
Worldwide,n.d. Web. 04 Nov. 2014. <http://development.starwoodhotels.com/>.
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22 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 15 Internal Analysis:VRIOS Analysis,p.1-37.
23 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 15 Internal Analysis:VRIOS Analysis,p.1-37.
24 Curcio,Brian.Hotel Industry- Check Up 8. MG 402 Business Policy.Loyola University Maryland.Fall 2014.
25 Curcio,Brian.Hotel Industry- Check Up 8. MG 402 Business Policy.Loyola University Maryland.Fall 2014.
26 "Marriott International,Inc."Bloomberg Businessweek. Bloomberg Businessweek, n.d. Web. 11 Nov. 2014.
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27 "Marriott Brands."MarriottInternational.N.p., n.d. Web. 10 Nov. 2014.<http://www.marriott.com/marriott-
brands.mi>.
28 Curcio,Brian.Hotel Industry- Check Up 8. MG 402 Business Policy.Loyola University Maryland.Fall 2014.
29 "About MarriottInternational - Find Your World."About Marriott Hotels. MarriottInternational,n.d. Web. 11
Nov. 2014.<http://www.marriott.com/marriott/aboutmarriott.mi>.
30 "Marriott International,Inc."Yahoo!Finance. Yahoo! Finance,10 Nov. 2014.Web. 11 Nov. 2014.
<http://finance.yahoo.com/q?s=MAR>.
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31 "Marriott International Inc."MarriottInternational,Inc Competition Comparisons to Its Competitors, Market
Share and Competitiveness by Segment. CSI Market, n.d. Web. 11 Nov. 2014.
<http://csimarket.com/stocks/compet_glance.php?code=MAR>.
32 "MAR." CNNMoney. Cable News Network, 10 Nov. 2014. Web. 11 Nov. 2014.
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33 "Marriott International,Inc."Bloomberg Businessweek. Bloomberg Businessweek, n.d. Web. 11 Nov. 2014.
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MAR>.
34 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 15 Internal Analysis:VRIOS Analysis,p.1-37.
35 Curcio,Brian.Check Up 9- VRIOS Analysis.MG 402 Business Policy.Loyola University Maryland.Fall 2014.
36 Carnrite,James. "Distribution System." Education Portal.Education Portal,n.d. Web. 11 Nov. 2014.
<http://education-portal.com/academy/lesson/distribution-system-definition-types-quiz.html#lesson>.
37 Shacklett, Mary. "Marriott: Focusingon Customer Experience and ExpandingBusiness Channels."Enterprise
Systems Media. Mainframe Executive, 12 Sept. 2011.Web. 11 Nov. 2014.
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expanding-business-channe%23sr%3Dg%26m%3Do%26cp%3Dor%26ct%3D-
tmc%26st%3D(opu%2520qspwjefe)%26ts%3D1415707038>.
38 "Marriott Reservation System Ready for Global Growth." MarriottNews Center. N.p., 6 Jan. 2010.Web. 11 Nov.
2014.<http://news.marriott.com/2010/06/marriott-reservation-system-ready-for-global-growth.html>.
39 "Luxury Hotel Franchises in theUS: Market Research Report." Luxury Hotel Franchises in theUS Market
Research. IBIS World,n.d. Web. 28 Oct. 2014. <http://www.ibisworld.com/industry/luxury-hotel-franchises.html>.
40 "Hospitality Net - FranchiseCompanies."Hospitality Net. Hospitality Net, n.d. Web. 28 Oct. 2014.
<http://www.hospitalitynet.org/list/1-10/154000984.html>.
41 Marriott. “Green Hotels.” http://www.marriott.com/corporate-social-responsibility/leed-hotels.mi,accessed
October 21, 2014.
42 "Marriott International Conservation Measures on Track to Meet 2020 Goals."MarriottNews Center. Marriott
International,14 Aug. 2014.Web. 11 Nov. 2014.<http://news.marriott.com/2014/08/marriott-international-
conservation-measures-on-track-to-meet-2020-goals.html>.
43 O'Neill,Siobhan."MarriottInternational Releases 2014 Sustainability Report." Green Hotelier. International
TourismPartnership,21 Aug. 2014. Web. 11 Nov. 2014. <http://www.greenhotelier.org/our-
themes/energy/marriott-international-releases-2014-sustainability-report/>.
44 "MAR Income Statement | MarriottInternational Stock." Yahoo! Finance. Yahoo! Finance,11 Nov. 2014.Web.
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45 "Marriott International Growth Comparisons."MarriottInternational (MAR) Growth Rates Comparisons,Sales,
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46 Patel, Akashleena."Shareholders Break from MarriottInternational FollowingSales Decrease."TickrWatch.
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47 "Market Share Definition."Investopedia.Investopedia, n.d. Web. 11 Nov. 2014.
<http://www.investopedia.com/terms/m/marketshare.asp>.
48 "Franchisingin theHotel Industry."The Highland Group. The Highland Group, n.d. Web. 28 Oct. 2014.
<http://www.highland-group.net/franchising-in-the-hotel-industry/>
49 Curcio,Brian.Hotel Industry- Check Up 8. MG 402 Business Policy.Loyola University Maryland.Fall 2014.
50 Carnrite,James. "Distribution System." Education Portal.Education Portal,n.d. Web. 11 Nov. 2014.
<http://education-portal.com/academy/lesson/distribution-system-definition-types-quiz.html#lesson>.
51 Shacklett, Mary. "Marriott: Focusingon Customer Experience and ExpandingBusiness Channels."Enterprise
Systems Media. Mainframe Executive, 12 Sept. 2011.Web. 11 Nov. 2014.
<http%3A%2F%2Fenterprisesystemsmedia.com%2Farticle%2Fmarriott-focusing-on-customer-experience-and-
expanding-business-channe%23sr%3Dg%26m%3Do%26cp%3Dor%26ct%3D-
tmc%26st%3D(opu%2520qspwjefe)%26ts%3D1415707038>.
52 "Luxury Hotel Franchises in theUS: Market Research Report." Luxury Hotel Franchises in theUS Market
Research. IBIS World,n.d. Web. 28 Oct. 2014. <http://www.ibisworld.com/industry/luxury-hotel-franchises.html>.
12
53 Cederholm, Teresa. "There Are No Shortcuts to Investing." Must-know: Marriott International Inc.Market
Realist,14 Oct. 2014. Web. 11 Nov. 2014. <http://marketrealist.com/2014/10/must-know-marriott-international-
inc/>.
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11 Nov. 2014.<http://dc.about.com/od/hotels/a/Marriott-Hotels-Brands-And-Locations.htm>.
55 Shacklett, Mary. "Marriott: Focusingon Customer Experience and ExpandingBusiness Channels."Enterprise
Systems Media. Mainframe Executive, 12 Sept. 2011.Web. 11 Nov. 2014.
<http%3A%2F%2Fenterprisesystemsmedia.com%2Farticle%2Fmarriott-focusing-on-customer-experience-and-
expanding-business-channe%23sr%3Dg%26m%3Do%26cp%3Dor%26ct%3D-
tmc%26st%3D(opu%2520qspwjefe)%26ts%3D1415707038>.
56 "Hospitality Net - FranchiseCompanies."Hospitality Net. Hospitality Net, n.d. Web. 28 Oct. 2014.
<http://www.hospitalitynet.org/list/1-10/154000984.html>.
57 "About Brands."MarriottBrands.MarriottInternational,n.d. Web. 11 Nov. 2014.
<http://www.marriott.com/aboutbrands/default.mi>.
58 "Marriott International Growth Comparisons."MarriottInternational (MAR) Growth Rates Comparisons,Sales,
Income, EPS. CSI Market, n.d. Web. 11 Nov. 2014. <http://csimarket.com/stocks/growthrates.php?code=MAR>.
59 Shacklett, Mary. "Marriott: Focusingon Customer Experience and ExpandingBusiness Channels."Enterprise
Systems Media. Mainframe Executive, 12 Sept. 2011.Web. 11 Nov. 2014.
<http%3A%2F%2Fenterprisesystemsmedia.com%2Farticle%2Fmarriott-focusing-on-customer-experience-and-
expanding-business-channe%23sr%3Dg%26m%3Do%26cp%3Dor%26ct%3D-
tmc%26st%3D(opu%2520qspwjefe)%26ts%3D1415707038>.
60 "Marriott Reservation System Ready for Global Growth." MarriottNews Center. N.p., 6 Jan. 2010.Web. 11 Nov.
2014.<http://news.marriott.com/2010/06/marriott-reservation-system-ready-for-global-growth.html>.
61 "MAR Income Statement | MarriottInternational Stock." Yahoo! Finance. Yahoo! Finance,11 Nov. 2014.Web.
11 Nov. 2014.<http://finance.yahoo.com/q/is?s=MAR&annual>.
62 "MAR Income Statement | MarriottInternational Stock." Yahoo! Finance. Yahoo! Finance,11 Nov. 2014.Web.
11 Nov. 2014.<http://finance.yahoo.com/q/is?s=MAR&annual>.
63 Curcio,Brian.Hotel Industry- Check Up 8. MG 402 Business Policy.Loyola University Maryland.Fall 2014.
64 Marriott. “Green Hotels.” http://www.marriott.com/corporate-social-responsibility/leed-hotels.mi,accessed
October 21, 2014.
65 O'Neill,Siobhan."MarriottInternational Releases 2014 Sustainability Report." Green Hotelier. International
TourismPartnership,21 Aug. 2014. Web. 11 Nov. 2014. <http://www.greenhotelier.org/our-
themes/energy/marriott-international-releases-2014-sustainability-report/>.
66 "Marriott International Conservation Measures on Track to Meet 2020 Goals."MarriottNews Center. Marriott
International,14 Aug. 2014. Web. 11 Nov. 2014.<http://news.marriott.com/2014/08/marriott-international-
conservation-measures-on-track-to-meet-2020-goals.html>.
67 Marriott. “Green Hotels.” http://www.marriott.com/corporate-social-responsibility/leed-hotels.mi,accessed
October 21, 2014.
68 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 16: Strategy Formulation Analysis,p.1-21.
69 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 16: Strategy Formulation Analysis,p.1-21.
70 Browning, Lynnley. "MarriottStrategy Brings Savings."The New York Times. The New York Times, 23 Nov. 2002.
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and-lawsuits.html>.
71 "Franchisingand Marketing:Marriott." MarriottInternational.MarriottInternational,n.d. Web. 18 Nov. 2014.
<http://www.marriott.com/hotel-development/marriott-sales-marketing.mi>
72 "MARRIOTT INTERNATIONAL, INC." Vault.com. Vault, n.d. Web. 18 Nov. 2014. <http://www.vault.com/company-
profiles/travel-leisure/marriott-international,-inc/company-overview.aspx>.
73 "Marriott News Center." MarriottNews Center. MarriottInternational,n.d. Web. 18 Nov. 2014.
<http://news.marriott.com/marriott-international-profile.html>.
74
Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 2 p. 1-12.
75
Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 2 p. 1-12.
76 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 16: Strategy Formulation Analysis,p.1-21.
13
77 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 16: Strategy Formulation Analysis,p.1-21.
78 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 2 p. 1-12.
79 Cummings, J. L., Creating Value (New York: Ming Press,2011),Ch. 16: Strategy Formulation Analysis,p.1-21.
80 Cummings, J. L., MG 402 Business Strategy, Loyola Univ. MD, Fall 2014,Lectures.
81 Cummings, J. L., MG 402 Business Strategy, Loyola Univ. MD, Fall 2014,Lectures.
82 Cummings, J. L., MG 402 Business Strategy, Loyola Univ. MD, Fall 2014,Lectures.
83 Cummings, J. L., MG 402 Business Strategy, Loyola Univ. MD, Fall 2014,Lectures.
84 Cummings, J. L., MG 402 Business Strategy, Loyola Univ. MD, Fall 2014,Lectures.

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Chapter 5; Chosen Competitive Strategies Startegic managnment assignment
 

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  • 1. 1 Executive Summary: Marriott International, Inc. After conducting an in depth analysis of Marriott International, Inc. it can be concluded that it would be most beneficial to the firm to continue with its current strategy of differentiating offerings. Extensive research on Marriott as a company, the hotel industry, current trends, and several other strategic aspects displayed throughout this summary led to this conclusion. The following four analysis served as the main cornerstones to this conclusion. Industry Analysis: By conducting a competitive factors framework analysis, it is evident that Marriott International is performing better in maximizing the most key CSFs than Hyatt, Starwood, and Hilton by varying degrees. Yet this variance is slight, which exemplifies how competitive and tight knit this strategic group truly is, hence the high degree of rivalry. Marriott’s success in this CFF stems from the firm’s ability to seize the most important opportunities being franchising, developing environmentally friendly hotels, and properly handling the increase in demand for hotel rooms. Also, mitigating the threat of undifferentiated offerings is crucial for Marriott to focus on to set them apart and gain an advantage over competing firms in the luxury strategic group. Each of these CSFs supports their current strategy of differentiating offerings. Internal Analysis: As indicated in the IFF portion of the chart, a total score of 3.0 out of 4.0 was awarded to Marriott International, Inc. This indicates that Marriott’s management and executives are utilizing their available resources and capabilities (R&Cs) efficiently and effectively while also mitigating the detrimental effects of the R&Cs that the firm does not possess. This high total score in the IFF was mainly attributed to Marriott’s success in its distribution systems, environmentally consciousness, and diversified brand portfolio while also properly mitigating the threats brought upon by struggling sales growth. In addition, Marriott’s ability to legitimately address all aspects of VRIOS has led to this overall success as a firm. Success in each of these essential aspects furthers Marriott’s current strategy to differentiate their offerings. Strategy Formulation Analysis: Each strategy gives Marriott the option to either increase profits or increase market share. Their current strategy along with alternative strategies appealing to younger more advanced generations and investing in customized offerings results in the same competitive advantage with regards to the B-C framework. Each strategy results in an increase in benefits which then leads to the option of increased price to increase profits or competitive price to increase market share. The other alternative strategy of increasing expansion efforts maintains benefits, but decreases costs. This gives Marriott the option to keep a competitive price to increase profits or decrease price to increase market share. Overall, each of these strategies result in the option for Marriott to either increase profits or increase market share, which is ideal for the firm when deciding which of these strategies to pursue1 2. Strategy Viability Analysis: The current strategy earned the most success overall and should be maintained as a pursued strategy. This strategy of pursuing differentiated offerings addresses the firm’s strengths and opportunities while also mitigating the main threats. This strategy is consistent with the company’s mission to pursue excellence and put the people first as well as its long-term objectives of providing strong and consistent product leadership and experiencing steady market share growth. This indicates that this strategy is properly consistent and aligned with all of the various aspects of Marriott mentioned throughout this analysis. In conclusion, Marriott International’s current strategy of differentiating offerings is the most aligned, sufficient, and viable strategy that has the least probability for failure and the best chance for success and thus should be pursued.
  • 2. 2 Industry Analysis Analysis Description: An industry study utilizes the strategic management process through external analysis. An external analysis examines the opportunities, threats, issues, and challenges that exist in the environment of a firm. Together these key components are called critical success factors (CSFs). These CSFs are constructed through each of the player and trend analyses that are derived from various analytical frameworks. Player analyses include value chain analysis, value net analysis, strategic group mapping analysis, strategic canvas analysis, and co-opetitive forces analysis. Trend analyses include industry evolution analysis, DTLC analysis, political social trends analysis, international trends analysis, economic and demographic trends analysis, and issue impact analysis. Industry Description: The hotel industry provides offerings by accommodating its customers with a room to stay in over some short-term period with the addition of living essentials such as clean water, toiletries, bathroom facilities, and a bed. The key activities, derived from the value chain analysis, related to all firms in the hotel industry are booking reservations and increasing customer turnover rate3. In addition, key relationships, derived from the value net analysis, in the hotel industry are identified through the dissecting of the customers, suppliers, competitors, and complementors of various firms in the industry. By analyzing the hotel industry, three main strategic groups were formed. These groups are labeled as luxury hotels, suitable hotels, and economic hotels. Such strategic groups were formulated through the strategic group mapping process. The luxury hotel strategic group includes Marriott International Inc., The Starwood Hotels & Resorts, The Hyatt, and Hilton. These strategic groups are separated mainly by the pursued competitive advantages of these different firms. What separates the luxury hotel strategic group from the rest of the firms in the analysis is the group’s striving for a differentiation advantage. Regarding player analyses, in the luxury hotel strategic group all players share identical key activities in terms of reserving rooms and increasing customer turnover and thus are ultimately undifferentiated. Also, players are grouped and distinguished based on their sought after competitive advantages, which results in the creation of strategic groups separated by mobility barriers. In addition, several key relationships exist amongst the firms and customers, suppliers, competitors, and complementors that need to constantly be maintained and improved. Regarding trend analyses in the luxury hotel strategic group, hotels are in the maturity phase of industry evolution, but moving towards the reconfiguration stage due to a lack of diversification and undifferentiated offerings resulting in a need for innovation. Also, consumers are becoming more environmentally conscious so as a reaction firms are establishing environmentally friendly and sustainable hotels. In addition, the global economy is picking up, which results in a rise in demand for hotel rooms and the ability for customers to spend money. Overall, the hotel industry is in a state of revival and growth4 5 6 7. Competitive Factors Framework: The competitive factors framework analysis examines the CSFs pertaining to the focal firm of a specific strategic group within an industry8. When conducting a CFF analysis, each CSF is assigned a weight in percentage form based on its relative importance. In addition, there are ratings for each firm’s individual performance with regards to each CSF on a 1-4 scale. The firm with the highest rating is doing the best job managing the critical success factors with respect to the other firms in the strategic group by taking advantage of opportunities and mitigating threats and challenges9 10. Based on their importance weight and consistent appearance through the external analysis the four most important critical success factors for the hotel industry were identified below in a partial competitive factors framework.
  • 3. 3 The 2 most relevant external CSFs to the firm’s current strategy of differentiating offerings are discussed further below11. 1. Franchising: Franchising was identified as a trend in the luxury hotel strategic group through the co-opetitive forces analysis. Franchising in the hotel industry involves allows large companies to expand their portfolio, expand their market share, and gain a larger customer base. Franchising leads to an extensive brand name as the main firm is able to offer different levels of hotels and does not have to rely on one class of customers for revenue12. Franchising has been and continues to be extremely important in the hotel industry, hence its 20% weight. It is the most impactful way firms can gain a competitive advantage in this very tight strategic group. Marriott International was assigned a rating of 4 because it operates under 18 different names to date13. The other brands in the luxury strategic group were assigned lower scores because of the lack of hotel brands and locations compared to Marriott14 15 16. By franchising aggressively, Marriott is furthering its current strategy to differentiate their offerings. Each one of the four firms in the luxury hotel strategic group is clearly taking advantage of this opportunity on some level to expand their brand portfolio, increase market share, and gain a larger customer base through the utilization of franchising, hence the large weight assigned. 2. Undifferentiated Offerings: The threat of undifferentiated offerings amongst the firms in the luxury strategic group was identified through several analyses including the value chain analysis, strategic group mapping analysis, industry evolution analysis, and co-opetitive forces analysis. This threat is extremely important to the firms in the strategic group because each firm is competing against each other over the same customer base, with the same offerings, striving for the same differentiation advantage through product leadership. This external CSF is given such an important weight of 25% because without any differentiation or product leadership, each one of these luxury firms are basically interchangeable, which is exactly what these companies want to avoid. Mitigating the threat of undifferentiated offerings thus also directly furthers Marriott’s current strategy to differentiate their offerings. Marriott must implement forms of innovation in order to head into the reconfiguration phase so that this differentiation can occur. All firms received low ratings because there is still such similarity in their offerings17 18 19 20. Overall, each firm stands to utilize creativity and innovation in order to attain the desired competitive advantage of differentiation through product leadership, as the firms in the luxurious strategic group are still extremely closely rivalled21. Conclusion: By conducting a thorough competitive factors framework analysis, it is evident that Marriott International is performing better in maximizing the most key CSFs than Hyatt, Starwood, and Hilton by varying degrees. Yet this variance is slight, which exemplifies how competitive and tight knit this strategic group truly is, hence the high degree of rivalry. Marriott’s success in this CFF stems from the firm’s ability to seize the most important opportunities being franchising, developing environmentally friendly hotels, and properly handling the increase in demand for hotel rooms. Also, mitigating the threat of undifferentiated offerings is crucial for Marriott to focus on to set them apart and gain an advantage over competing firms in the luxury strategic group. Each of these CSFs supports their current strategy of differentiating offerings. External CSFs Key Trends - Opportunities: Marriott Hyatt Starwood Hilton Ave 20% 4 2 2 3 2.8 20% 4 4 1 2 2.8 10% 4 3 3 2 3.0 Key Trends - Issues / Challenges / Threats: 25% 1 1 2 1 1.3 75% 3.0 2.3 2.0 2.1 2.3 1 Relative importance of each CSF to the strategic group. 2 How well each company is able to take advantage of or addess each CSF. Competitive Factors Framework: Luxury Hotel Strategic Group Weight 1 Firm Ratings 2 Partial Performance Rating a Franchising b Development of environmentally friendly/sustainable hotels c Increase in demand for hotel rooms f Undifferentiated offerings
  • 4. 4 Internal Analysis Analysis Description: In relation to the strategic management process, internal analysis is just one aspect of the strategy crafting step of the SMP that focuses within the focal firm22. VRIOS Analysis is the approach to internal analysis that involves the combination of several frameworks and approaches collectively designed to provide a thorough exploration of the focal firm’s resources and capabilities (R&Cs). The acronym VRIOS entails: Value creation (take advantage of opportunities), how Rare it is (degree of commonality amongst rivals), how Inimitable it is (likelihood of imitation), how controllable it is by the Organization (degree a firm is organized to exploit the full competitive potential), and how Sustainable it is (holds value over time). It is essential to coverall all aspects as a full VRIOS for an effective internal analysis23. Company Description: Marriott International, Inc. is a leading global hospitality company encompassed in a diversified hotel brand categorized in the luxury hotel strategic group24. The company’s key offerings are a clean and satisfied short-term stay. The key activities include booking reservations and customer turnover25. Marriott International was founded in 1971 and is currently headquartered in Bethesda, Maryland26. There are 18 brands operating under Marriott International that total over 4,000 locations holding nearly 700,000 rooms in 78 countries around the world27. With this wide ranging diversified portfolio of hotel brands, Marriott International can serve virtually and market of people, but mainly focuses on the middle to upper class customers. Marriott’s top competitors, also located in the luxury hotel strategic group, are Starwood Hotels & Resorts, Hyatt Hotels Corporation, and Hilton Hotels & Resorts28. Marriott has attained great success in the hotel industry by means of a strong balance sheet, sound management, and a history of industry leadership29 30 31 32 33. Modified Internal Factors Framework/VRIOS Worksheet: The table below is a synthesized combination of two vital frameworks being the VRIOS and the IFF. The IFF is used as a summary to capture the key findings of the analyses, being the key R&Cs of the organization. Similar to the CFF, the IFF in the internal analysis involves weighing and rating the key R&Cs of the focal firm. In addition, the performance of the focal firm is then assessed with regards to how well it is taking advantage of each existing R&C and handling each missing R&C. Each aspect of VRIOS is addressed in the chart34. Based on an assessment of their importance and their repeated appearance in the six analysis approaches of the external analysis, four existing and missing R&Cs were identified as most important to Marriott and are provided below. Ket R&C Weight Rating Valuable Rare Inimitable Organizational Sustainable Many/Strong Distribution Systems 20% 4.0 Very valuable. Reach wide variety of customers. M itigates threats: of not being able to reach customers & depending on one customer group. Relatively rare. Not all firms in luxury strategic group pursuing. None have accomplished as many distribution channels as M arriott. Not easily imitable. Very difficult, expensive, & time consuming to establish the number, variety, & quality of brands as M arriott. Very organizational. Utmost importance to highest ranking members of the organization. Controlled and benefitted most by executives and upper level managers. Very sustainable. Stable, continue to grow, and even expand further with more hotel brands. Supporting R&Cs are numerous and of a wide variety. Environmentally Conscious 12% 4.0 Valuable. Appeals to the overall “ green” trend in society. Fueled by rapid advances in technology. Establishes sustainable buildings. Benefits from the increase in environmentally conscious consumers. Relatively rare. M arriott has 56 LEED certified hotels, much more than rivals. Rarity may decrease in the future. Fairly inimitable. Difficult, expensive, and time consuming to copy this R&C because of vast amount of technology. Fairly organizational. Technology, environment, & innovation sectors, but still involves executives. Very sustainable. Highly likely supporting R&Cs & investments will come about as a result: (green), positive attention. Diversified Brand Portfolio 12% 3.5 Extremely valuable. Appeals to wider variety & greater number of customers. M itigates threats: relying on one class of customers. Relatively rare. M arriott’s 18 brands much more than rivals. Rivals aware of this R&C, trying to pursue more brands and catch up, rivals are still behind. Highly inimitable. Difficult, expensive, time consuming, resource exhausting for rivals to attain the level and breadth of success as M arriott. Highly organizational. Pinnacle of M arriott's organizational chart. Decisions regarding branding, franchising, & expansion come from the top executives. Utmost importance to the most powerful people in the company. Highly sustainable. Highly likely supporting R&Cs & further investments will result. Struggling Sales Growth 12% 2.0 Extremely valuable. Challenges firm's ability to market to its target customers, pricing model, quality of offerings, & overall business model. Rare. M arriott's sales growth decreased significantly from 2011- 2012, no other rivals firms' sales decreased. Relatively inimitable. Inevitably cost time, money, & resources to improve sales. Extremely organizational. M arketing, advertising, & finance. Concern to executives of M arriott. Not very sustainable. Some further investments into R&D, marketing, & pricing may occur. Partial Performance Rating 56% 3.0
  • 5. 5 35 36 37 38 39 40 41 42 43 44 45 46 47 48 Of these four top R&Cs, the two most worth mentioning are elaborated upon below. 1. Many/Strong Distribution Systems: The many and strong distribution systems of Marriott International were identified through the value chain and value net49 50. In the hotel industry, distribution is best accomplished through the occupation of numerous brands by a parent company. Marriott International has utilized this R&C through the firm’s 18 different hotel brands51 52 53 54. This is the most important R&C with a 20% weighting, which signifies that abundant and strong distribution channels are extremely important to hotel chains such as Marriott. Possessing such well diversified and stable distribution channels serves to be very valuable. It allows firm to take advantage of the opportunity to reach a wide variety of customers. It mitigates the threats of not being able to reach customers, having to depend on one hotel or customer group for revenue, and customers going to competitors55 56 57 58. Marriott International leverages this strength in an extraordinary manner, earning it a rating of 4. Marriott has taken advantage of this R&C very well as it possesses the most distribution channels, 18, of any of the firm's competitors by a substantial margin. Also, the firm's online reservation system was one of the first of its kind and has only improved in recent years59 60 61 62. 2. Environmentally Conscious: This key existing R&C was identified through the DTLC analysis63. Environmental consciousness entails implementing business practices that minimize a firm's negative effect on the environment, while attempting to develop and execute sustainable ways of conducting business. This R&C is fueled by rapid advances in technology that allow hotel firms to implement "greener" strategies in an attempt to establish sustainable buildings that minimally effect the environment in a negative way. Marriott International has implemented these strategies before any rival firm did, with more variety and volume than others, and with the most overall success64. In today's increasingly environmentally conscious society, anything involving a movement towards being "greener" or more sustainable serves as a very important trend, thus this R&C is assigned a 12% weight. This R&C is driven by the opportunity to appeal to the overall trend in society of an increased importance and value on conducting business in the most environmentally friendly way. This R&C tries to benefit from the increase in environmentally conscious consumers, so firms are looking to take advantage of this opportunity and appeal to this growing customer base and ultimately add value in that way. Marriott possesses the most environmentally conscious facilities when compared to rivals. The firm has 56 LEED certified hotels, substantially more than any other hotel chain65 66. Marriott has taken advantage of this R&C more than any other competing firm by a far margin, thus earning them a 4 rating. Marriott has appealed to the increasingly environmentally conscious consumer very well as it is head and shoulders above the competition, which furthers their current strategy67. Conclusion: As indicated in the IFF portion of the chart, a total score of 3.0 out of 4.0 was awarded to Marriott International, Inc. This indicates that Marriott’s management and executives are utilizing their available resources and capabilities (R&Cs) efficiently and effectively while also mitigating the detrimental effects of the R&Cs that the firm does not possess. This high total score in the IFF was mainly attributed to Marriott’s success in its distribution systems, environmentally consciousness, and diversified brand portfolio while also properly mitigating the threats brought upon by struggling sales growth. In addition, Marriott’s ability to legitimately address all aspects of VRIOS has led to this overall success as a firm. Success in each of these essential aspects furthers Marriott’s current strategy to differentiate their offerings.
  • 6. 6 Strategy Formulation Analysis Analysis Description: Strategy formulation analysis entails conjoining the external analysis and the internal analysis in order to support the development of strategy alternatives for the focal firm. The process entails identifying potential alternative strategies. Next, a strategy canvas analysis and strategy statement analysis are conducted to interpret further analysis of the potential strategies. Completing these steps helps the analyst identify and understand the level of success each strategy will have in the firm’s competitive industry. Strategy Statement Analysis: Strategy statement analysis is the analysis used to assist an analyst in evaluating strategies for completeness. A strategy is considered complete when it can explain what a firms has available (what got- R&Cs), address its current context (what matters- arenas), and seek to pursue some form of competitive advantage (what get- competitive advantage). In other words, a complete strategy entails an explanation of what the firm has that it seeks to leverage, what dimensions of competition it seeks to position itself against, and what it hopes to accomplish as a result. Finally, a fourth component entails determining what specific type of strategy is involved (how do it- strategy type). Strategy statement analysis requires clearly defining and succinctly capturing each of the four aspects with regards to the potential alternative strategies, to ensure that each is a compete strategy68. Provided below is a completed strategy statement analysis conducted for Marriott International. Marriott International competes in the luxury hotel strategic group, which is characterized by a high degree of rivalry with little differentiation of offerings amongst the top firms. Thus, current strategy Marriott is pursuing is aimed at differentiating their offerings. Based on a comprehensive strategic analysis of Marriott International and the major hotel industry focusing on the luxury strategic group, in addition to a strategy formulation sequence, three potential alternative strategies were identified for the company and are elaborated on further below as well as the current strategy69 70 71 72 73. Strategy Arenas R&Cs Strategy Type Competitive Advantages Alternative strategies Arenas intowhich R&Cs are tobe applied R&Cs the strategyseeks to leverage or address Specific type of strategy(e.g., intensive market penetration) B-Cexplanation of the strategy Innovation. Technological advancement. Product leadership. Personalization. Raise focus and attentionin younger demographics. [B- same, P- same, C- decr (inc profs) OR B- same, P- decr, C- decr (inc mark share)] Market diversification. Incr scope of offerings. More availability and quality of brands, lower costs, larger mark share, more profits, greater brand recognition. [B- incr, P- incr, C- same (incrprofits)OR B- incr, P- same, C- same (incrmark share)]Incrperceived value, higher price/higherprofits OR competitive price/greatermarkershare. [B- incr, P- incr, C- same (incrprof)OR B- incr, P- same, C- same (incrmarkshare)] Incrperceived value, higherprice/higher profits OR competitive price/greater markershare. Intensive market penetration Intensive market penetration. Reduce threat ofhighdegree ofrivalry. Raise value offirm. Product diversification strategy. Defensive strategy. Strong brand recognition. Strong financialposition. Strong existing franchising prescence. Innovation. Technological advancement. Product leadership. Raise attention toward customized offering advancement. Reduce threat of high degree of rivalry. Uniqueness. Customization. Technologicaladvancement. Product leadership. Superior offerings. Set market trend. [B- incr, P- incr, C- same (incrprof)OR B- incr, P- same, C- same (incrmarkshare)] Incrperceived value, higherprice/higher profits OR competitive price/greater markershare. Product diversification strategy. Strategy Statement Analysis: Marriott International, Inc. Increase Expansion Efforts Invest in Customized Offerings Current Strategy: Differentiate Offerings Appeal to Younger/ Advanced Generatoins Raise investment in internationalmarkets. Broaden prospective locationsearch.
  • 7. 7 1. Increasing Expansion Efforts focuses on leveraging Marriott’s existing franchising success to further that initiative as well as developing hotels in untapped international locations. This alternative strategy will help diversify the market, but also Marriott’s brand portfolio, locations, and customer base. This will result in a larger market share, more profits, and greater brand recognition. The effect on the B-C framework is mentioned above74. 2. Appealing to Younger and Advanced Generations seeks to allow the firm to use its vast and numerous distribution channels and brands to reach out and raise attention of younger demographics. This alternative strategy also helps Marriott pursue the differentiation competitive advantage by taking the initiative to reach out to these non-ordinary customers to luxury hotels. This will require innovation, technological advancement, and brilliant marketing in order to touch these younger and more advanced generations in an attempt to lure them toward Marriott. This would address one of Marriott’s rare weaknesses of lacking a diversified customer base, in terms of age, by mainly catering to those over 30 years old. This poses as a challenging but attainable alternative strategy for Marriott to pursue. The effect on the B-C framework is mentioned above75. 3. Investing in Customized Offerings seeks to leverage Marriott’s advanced technology, innovation, and personalization skills in order to minimize the weakness of little evolution in the firm’s offerings and mitigate the threat of demand for customization. While being a defensive strategy, this alternative strategy is also a product diversification strategy, thus it can also be used to appeal to more technological inclined and personalized customers. The effect on the B-C framework is mentioned above76. 4. Differentiating Offerings (Current Strategy) seeks to propel Marriott’s products and services beyond the quality and uniqueness of its rival hotel brands. This strategy aims at setting Marriott apart from the competition by providing offerings and an experience to its customers that is exceptional, one of a kind, and memorable. By executing this initiative, Marriott expects customers to be much more inclined to recommend their brand to others potential customers, as well as remain loyal to the brand themselves. As an intensive market penetration strategy, the firm is aiming to increase market share and raise the value of the firm in addition to reducing the threat of a high degree of rivalry. Marriott has been striving to execute this strategy through technological advancement, customization, and setting market trends in order to ultimately provide superior offerings. The effect on the B-C framework is mentioned above77. Conclusion: Each alternative strategy gives Marriott the option to either increase profits or increase market share. Their current strategy along with alternative strategies appealing to younger more advanced generations and investing in customized offerings results in the same competitive advantage with regards to the B-C framework. Each strategy results in an increase in benefits which then leads to the option of increased price to increase profits or competitive price to increase market share. The other alternative strategy of increasing expansion efforts maintains benefits, but decreases costs. This gives Marriott the option to keep a competitive price to increase profits or decrease price to increase market share. Overall, each of these strategies result in the option for Marriott to either increase profits or increase market share, which is ideal for the firm when deciding which of these strategies to pursue78 79.
  • 8. 8 Strategy Viability Analysis Analysis Description: Strategy viability analysis is a method analysts utilize to validate which strategy is most viable to the focal firm. There are several key components that need to be checked in order to determine the viability of a strategy. Overall, for a strategy to be viable it must be aligned with the structure of “what matters, what got, and what get80.” This structure is the basis for any strategy. For a strategy to be viable all of these aspects must be true81. First, a strategy must be consistent with the firm’s mission statement and long-term objectives. It is also required that a strategy is in alignment with the firm’s current strategy or goals in order to be implementable. Next, the analysis requires the analyst to check the compatibility with its R&Cs, Arenas, and CSFs. This essentially tries to determine how well each strategy matches these various components. The next step in the strategy viability analysis is to determine each strategy’s ability is in alignment with the company as a whole82. Analysts evaluate each strategy along numerous analyses in order to justify each strategy’s viability with the focal firm. Based on the overall score of these analyses, decision makers choose a proposed strategy in an attempt to advance the firm’s overall success83. In essence, strategy viability analysis is aimed at determining which strategy is the most viable strategy. Risk Matrix Graphic: The risk matrix graphic is a visual framework that puts into perspective the various proposed strategies with regards to being aligned with the present approach, the intended focus, and the probability of failure. Such a tool clearly maps out where each strategy lies in relation to each other and is extremely useful in visually putting in perspective the alternative strategies so that a logical decision can be made. Below is the risk matrix graphic conducted for the four strategies discussed throughout this portion of the analysis. This risk matrix shows that the current strategy of differentiating offerings has the least probability of failure when compared to the other alternative strategies. Obviously this strategy was closest to the current strategy and present intended focus. This strategy has proven to be the least risky, most aligned with Marriott’s goals, and has the most potential for success.
  • 9. 9 Summary Strategy Viability Analysis: In the final summary strategy viability analysis below, overall scores are given to each strategy based on the final scores from each of the various strategy viability analyses. Throughout the analysis, the current strategy pursued by Marriott International Inc. is to differentiate offerings84. Conclusion: After conducting a full extensive strategy viability analysis several conclusions can be drawn. The current strategy earned the most success overall and should be maintained as a pursued strategy. This strategy of pursuing differentiated offerings addresses the firm’s strengths and opportunities while also mitigating the main threats. This strategy is consistent with the company’s mission to pursue excellence and put the people first as well as its long-term objectives of providing strong and consistent product leadership and experiencing steady market share growth. The current strategy adheres to the various current political, social, and technological trends as well by attempting to cater to each customer in a unique, personal, and advanced fashion. This indicates that this strategy is properly consistent and aligned with all of the various aspects of Marriott mentioned throughout this analysis. Increasing expansion efforts posed as the most viable alternative strategy to the current as it also fulfilled most of Marriott’s long-term objectives and overall company values. This alternative strategy also performed above average in the remaining aspects of the summary strategy viability analysis, but it was simply not as viable a strategy as the current. Investing in customized offerings was neither a pure “hit or miss”, but rather in the middle of the road overall as an alternative strategy to pursue. While this alternative strategy succeeded in being consistent with the company’s mission, it failed to match with the company’s overall CSF profile. Appealing to younger and more advanced generations matched the company’s R&C profile, but failed to be consistent with the long-term objectives, have sufficient arenas of opportunity, and align with the company’s approaches. Ultimately, this proved to be the least viable alternative strategy and should not be pursued. In conclusion, Marriott International’s current strategy of differentiating offerings is the most aligned, sufficient, and viable strategy that has the least probability for failure and the best chance for success and thus should be pursued.
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