Marriott Contemporary Trends and Competitors

Background JW Marriott hotels is owned by Marriot international. Marriot international is a Washington DC based company. In 1927, Willard Marriott started the hotel chainAdvertising We will write a custom report sample on Marriott: Contemporary Trends and Competitors specifically for you for only $16.05 $11/page Learn More (Marriott 6). Key Bridge Marriott is the company’s longest running hotel and it opened its doors in 1959. From there on, it ignited an international growth to include 3,150 properties. In 1992, Marriott cooperation was split into two. The split formed two companies; Host Marriot corp. and Marriot international (Marriott 8). In 1995, Marriott acquired a 49 % controlling stake in Ritz Carlot Hotel (Marriott 13). In 2005, all the rooms in the hotel were given an overhaul. In the same year, the hotel chain marked a milestone as the only hotel that did not offer trans fat foods (Marriott 15). Business performance Marriot hotels and r esorts have continued to perform exemplarily. This is as far as sales and financial performance are concerned. As much as it has a global presence in different markets, it has enhanced its sales activities to reach as many customers as possible. These can be demonstrated from many sales centers it has in different markets (Marriott 23). From its third quarter results as at October 2010, the company posted good financial returns. For instance, total sales revenues increased by 9% to $253 million. Its worldwide system and growth improved considerably by 8.2% (Marriott 7).in addition, the chain of hotels also realized a net income of $ 83 million.Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More This net income represented a 56 % rise in income in comparison with the results of the previous year. In addition, the company has a wide array of hotels under construction. The company’s stron g cash flow has enabled it to reduce its debts ahead of schedule. Its total revenues were $2.6 billion (Marriott 21). Strategy In order to remain competitive in the market, the chain of hotels has sought to integrate an inimitable brand strategy. On the other hand, it should be known that the hotel business was not a glimmer in the eyes of the company owner. Marriot believes that its job is to make sure that customers have the best possible experience. By doing this, the company knows very well that its customers come from different backgrounds, culture, religion and tradition (Marriott 19). The execution of the brand strategy begins with one branch of the hotel and then later on, it is replicated to the others. This is because customer satisfaction relates in one way or the other with overall business performance (Marriott 7). The company employs global diversity and inclusion as a way of thriving in the market place. This is done by laying more emphasis on customers, suppliers, ow ners, workforce and recognition. Its current business strategy is also built on strategic alliances with other like minded business partners. This strategy has encompassed various cultural competencies to build upon its success. In addition, the company believes in working with locally owned businesses. This is more so in relation to different communities. By doing this, the company believes that it will be a win for the business and the community (Okumas12). Competitor analysis Porter 5 forces Marriot Hotel has been a good shaper of the market because it has focused on operational and tactical execution. Industry mapping is a powerful tool that can help give a good strategic view of the competitive terrain (Harris 8). This is in relation to porters’ five forces as a framework that helps in business strategy development and industry analysis. Advertising We will write a custom report sample on Marriott: Contemporary Trends and Competitors specifically for you f or only $16.05 $11/page Learn More Source: Porter 2008 The hospitality industry has continued to attract a lot of new entrants’ because of its growth potential and high returns (Hassanien et al 13). Although this are expected in a normal business environment, the company has focused on continually renewing its business for success. On the other hand, there is a more intensified bargaining power from customers. This is because they are more enlightened about products and this has been enhanced by availability of information (Hax and Majluf 8). The company has survived this by enhancing brand recognition and customer satisfaction. Because of diversity and competition, there is a lot of competitive rivalry within the hospitality industry (Hubbard et al 11). This can be explained from the urge to expand and attract more customers. Marriot hotels has employed franchising as a way of reaching new markets instead of investing in real estate which is very costly. Compe titive rivalry has also forced it to enhance brand recognition and customers experience as a way of retaining customers. Bargaining power of suppliers is another force that businesses in the hospitality industry have to cope up with. Because of its global presence, the company has operations in different markets. As a matter of fact, it works with locally owned businesses and suppliers by making them part of the group. This is where they are given preference to contracts in areas the company has operations (Marriott 27). Because of intensified competition in the market, there is also a high threat of substitute products (Hubbard et al 2008, p. 24). Marriot hotels has employed innovative brand strategies as a way of ensuring that its products are not made irrelevant in the market by substitute products.Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The company encourages multiplication of talents as a way that it can use to build its products and brands and in the process ensure that its products are not threatened by substitute products (Marriott 29). Key success factors The company has transformed the hotel business in a number of ways. This has been done by delivering quality service to customers and guaranteeing high returns for shareholders. It has demonstrated a high ability to combine creativity and discipline. This seems to be the hallmark of any high performing company or business in the hospitality industry (Spears 4). In other words, it can be said that the company has shaped the market well to advance its operations. Just to show how successful the company is, its share price has been stable in recent years. This can be explained form the graph below. Industry lifecycle The hospitality industry has a very unique lifecycle. Products and services move through various stages. These include creation, growth, maturity and decline. Creation is where products are introduced in the market to be judged by customers. Marriott hotels has been coming up with innovative products to serve the market well. Growth on the other hand is marked by an increase in sales of the new product that the company has introduced. This can be an increase in hotel bookings or growth of restaurants in terms of customers served. Maturity is characterized by the stabilization of the hotels size and products. This can be in terms of employees or on the other hand stabilized sales. During this stage, companies are able to create a cash cow and in the process stabilize their operations. Decline will later be seen when the organization starts to shrink in size. In this stage, efforts to rejuvenate the company and enhance its operations may fail. As a matter of fact, companies in the hospitality industry need to be creative and come up with new products after doing extensive market research. Competitor Mapping Competitor analysis in the hospitality industry is more concerned with an assessment of weaknesses and strengths of potential and current competitors in the market and industry (Porter 17). In this way, through a strategic defensive and offensive approach, it should be able to come up with threats and opportunities (Lewis 13). The company has continued to thrive because of good strategic decisions and moves. All along, the company has combined a unique brand strategy as its success factor. On they other hand, it has focused on employee training and retention. By focusing on other elements of performance anatomy, the company has created a good cooperate culture to enhance a winning mindset (Carpenter and Sanders 19). This has in the long run pervaded the organizational framework and helped Marriot achieve a spectacular performance. In addition, it has also built a large portfolio of brands that have ended up providing a variety of lodging and hotel options to diverse and distinct customers. Its existing service oriented cooperate culture can also be said to be behind the company’s success. On the other hand, the company has put in place a good brand management initiative (Hunger 21). High performance businesses in the hospitality industry manage talent well and ensure that hiring is for the fit rather than skills (Hubbard et al 24). By giving the whole process of franchising and management of hotels, this has enabled the company to remain competitive in the market and thereby enhance its sustainability. As much as hotel management and franchising have been well done, the company has forgotten to offer increasingly deep discounts to attract a large number of customers. Because the market is getting saturated, the company has forgotten to build new full service hotels. Position-evaluate The company is currently franchising 50 to 60% of its hotel properties (Marriott 32). There is an improvement in the hospitality industry business climate. On the other hand, pricing has posit ively improved and this means that the company will continue getting good revenues (Lewis 16). It is also evident that the company has continually out performed its competitors in the hospitality industry. This is in relation to key benchmarks like total returns to shareholders. Source: Marriott 2010 It therefore implies that the company has a great outlook and performance. This can be explained from the profits that it has continued to return as years go by. For instance, in the third quarter results of 2010, the company recorded increased earnings before taxes and expenses of $220 million (Marriott 45). Although other competitors in the market are also performing well, the company seems to be ahead in terms of the general long term performance which is good in any industry and more so the hospitality industry. On the other hand, the company is engaged in a massive expansion plan that seeks to increase its chains and market presence. Most of its hotels that are expected to open ar e either under construction or are undergoing massive rebranding to increase its foothold in the market. Currently, it is estimated that the company has close to 3,500 properties in 70 countries which explains its dominance as a hospitality firm (Marriott 53). To ensure that it returns to the society well, the company has a good cooperate social responsibility program (Lewia 21). This can also be explained from the environmental award it received after being ranked position 42 as one of the greenest companies on the planet (Marriott 32). The company is currently a market leader in lodging development and operational excellence. In 2008, the company was one of the top hospitality firms in travels and leisure according to the Ceres Investor coalition awards (Marriott 39). The company can also pride itself as one of the companies with a high customer loyalty because of the returns it recorded even during the global financial crisis that greatly affected the hospitality industry (Spears 13). Generally, the company is in a great position to expand its business and grow further based on good strategies it has continued to employ for sustainability. Trends There is a big tension between expanding market boundaries and this will force the company to manage such through innovative brand strategies (Johnson and. Scholes 21). This will also force them to focus on operational and tactical execution to continue shaping the hospitality industry. Market trends are always changing and demanding that companies become more innovative and attentive to continue being competitive (Hassanien et al 27). This will therefore force the company to improve the quality and speed of decision making. On the other hand, they are supposed to master the speed of change and innovation as it deserves special attention by all players in the hospitality industry for efficiency (Hunger 25). The macro and task environments are moving towards an era where companies need to view information technology as an asset (Okumas 29). This will force the company to view information technology as part of its business strategy (Spears19). Global marketing trends are changing as people and companies use information technology to advance their interests. This means that the company will be forced to invest in information technology. Consumers are more enlightened and knowledgeable about products that the market offers (Hubbard et al 32). This is because there is a lot of information about companies and their products. To be on the safe side, the company needs to invest in research and development to know what customers will demand at a given time and devise the best method to serve them. Conclusion Marriott has continued to be successful because it uses a selective scorecard. The company has continually used data to support decision making and also on the other hand measure success (Marriott 42). For instance, the company has always stood out in terms of employee engagement, brand recognitio n and customer satisfaction. The company has also embraced IT to enhance innovation. This can be explained from the fact that it was one of the first companies to develop an inventory management system (Marriott 53). In addition, the chain of hotels is not afraid to embrace change in its operations in a bid to enhance its competitive edge in the market. Works Cited Carpenter, Andrew and Sanders, Gerald. Strategic Management: A Dynamic  Perspective, Concepts and Cases. Australia: Pearson, 2010. Print. Harris, Peter. Accounting and Finance for the International Hospitality Industry.  Oxford; Boston: Butterworth-Heinemann, 1995. Print. Hassanien, Ahmed, Dale Crispin and Clarke, Allan. Hospitality Business Development.  Oxford: Boston: Butterworth-Heinemann, 2010. Print. Hax, Arnoldo and Majluf, Nicolas. The Strategy Concept and Process: a pragmatic  approach. Upper Saddle River, N.J: Prentice Hall, 1996. Print. Hubbard, Graham, Rice, John and Beamish, Paul. Strategic Management Thinking,  Analysis, Action. Sydney: Pearson, 2008. Print. Hunger, David. 2005. Strategic Management: Concepts. Upper Saddle River, NJ, Prentice Hall, 2005. Print. Johnson, Gerry, Scholes, Kevan and Whittington, Richard. Exploring Corporate  Strategy. Harlow: Prentice Hall, 2005. Print. Lewis, Robert.1998. Cases in Hospitality Strategy and Policy. New York: John Wiley Sons, 1998. Print. Marriott., 2010. Marriott International Reports Third Quarter 2010 Results. Web. Okumas, Fevzi, Altinay, Levent and Chathoth, Prakash. Strategic Management for  Hospitality and Tourism. Boston: Butterworth-Heinemann, 2010. Print. Porter, Michael. The Five Competitive Forces That Shape Strategy. USA: Harvard, 2008. Print. Spears, Marian. Foodservice Organizations: A Managerial and System Approach. New Jersey: Prentice Hall, 2003. Print. This report on Marriott: Contemporary Trends and Competitors was written and submitted by user Celia Simmons to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.