Marriott Competitive Strategy 144o32

About Marriott: Marriott International, Inc., is a global leading lodging company with nearly 4,500 properties in 87 countries and territories. Marriott International reported revenues of more than $14 billion in fiscal year 2015. Founded by J. Willard and Alice Marriott and guided by Marriott family leadership for nearly 90 years, the company is headquartered in Bethesda, Maryland, USA.

 Vision  “To become the premiere provider and facilitator of leisure and vacation experiences in the world.”  Mission  “To enhance the lives of our customers by creating and enabling unsured vacation and leisure experiences.”

 Core Values  We put people first – “Take care of associates and they will take care of the customers.”  We pursue excellence – Our dedication towards the customer shows in everything we do.  We embrace change – Innovation has always been part of the Marriott story.  We act with integrity – How we do business is as important as the business we do.  We serve our world – Our “spirit to serve” makes our company stronger.

Marriott’s Competitive Strategy: Marriott quickly recognized that one hotel brand would not cater to every guests needs. Therefore, Marriott utilizes a Broad Differentiation strategy in that there are multiple hotel brands all

catering to a different type of traveler or consumer in the hospitality market. From upscale offerings like Ritz Carlton and JW Marriott Resorts and Spas for the consumer desiring highend and luxurious accommodations to the Courtyard by Marriott that provides the business traveler in-room offices space, to the Fairfield Inn which provides Marriott quality for travelers on a budget, Marriott International has lodging brand that will meet about any consumer desires. The aforementioned Ritz Carlton, JW Marriott and Marriott Hotels and Resorts are marketed toward a consumer that desires a more upscale lodging experience and is willing to pay a higher cost for the extra luxurious amenities. Courtyard by Marriott provides business travelers space to have a remote office set-up in room and affords the ability to be productive after hours on business trips. Springhill Suites is a moderate hotel offering a single traveler or a family a living area to unwind before a good nights rest. Residence Inn and Townplace Suites offers extended stay accommodations for travelers that are looking for a place a little more like home. These accommodations offer full size kitchens and living areas with the sleeping quarters completely separated. Finally, the Fairfield Inn as mentioned above is for the budget traveler that desires Marriott quality accommodations. All-in-all, there is a Marriott for all sorts of occasions and Marriott's many offerings in accommodations, all providing exceptional Marriott service and quality, assist Marriott in their mission of building customer loyalty.

Generic building blocks of Competitive Advantage of Marriott: Efficiency: The Marriott's competitive advantage concerning the building block of efficiency is exhibited in the vast global presence and diversified sources of revenue the company holds. Even though the majority of the company's earnings come from the U.S,

around 43% is produced by its international operations. This is a great advantage as it allows the company to not depend on one single market to generate revenues. The earnings are obtained by operating in both emerging and already matured markets; the latter driving the value of growth while the former drives the volume. The company's global presence creates a barrier against risk that may arise in each varying economy. Furthermore, aside from having an enormous global coverage, the company generates revenues by tapping into various customer segments. Ranging from the lower priced segment, with the Fairfield inn, to the luxury priced segment, with the Ritz-Carlton, the company can profit by satisfying a multitude of customer demands.

Quality: The quality standard of the Marriott is far from lenient; this is something the company prides itself in. Marriott's brand is one of the most respected, not to mention influential, in the marketplace; with over 80 years of experience it has grown to be a principal hospitality leader. Hotel brands such as the RitzCarlton and Bulgari, which the Marriott operates, are set to cater all the luxury needs guests may require. On the other hand, the more moderately priced SpringHill Suites and Courtyard carry on amenities and services focused on total quality; never stepping away from providing affordability to the customer. The high level of quality is effectively maintained by strict franchise agreements; often having managers and owners follow strict regulations from the brand. The company continues to refine their business model, innovate their brands, and essentially master the art of taking care of customers.

Innovation: A strong focus of the Marriott's business model is to consistently formulate ways of making operations more efficient; in this they have not failed. The company remains to be a leader in developing innovative ways to improve the customer experience and the process of conducting business. As previously mentioned,

programs like MARSH provide a valuable level of customer service through a practical use of technology. Another innovation Marriott developed is a price auditing tool to handle costly renegotiation requests from its clients. The program, called the Property Guest Object Oriented System (PGOOS), automated the process of monitoring shifting corporate rates and auditing of MARSH. The implementation of PGOOS leads to customers receiving the lowest rates available that coincided with the current state of the market. Innovation can definitely be qualified as a competitive advantage and edge for this company.

Responsiveness to Customers: In order to properly respond to customers' wants a company must constantly identify and cater to their changing needs. The Marriott has consistently taken steps to excel in this competitive advantage, either through customization or consistent delivery of quality service. In order to meet customer demands the Marriott has utilized multiple systems, such as MARSH, to provide an incomparable attention to its customers. It also depends heavily on customer to constantly improve customer satisfaction and loyalty. The company is committed to providing a level of quality that will keep customers coming back; whether it is for business or for pleasure. The Marriott hotel brand is not only notorious but also respected in the hotel industry. In 2009, Fortune magazine ranked Marriott as number 37 in the World's Most ired Companies; a list that they have been a part of for ten consecutive years. Awards such as this one, and many others, clearly demonstrate the dominant brand value this company has and will continue to have for years to come; millions of customers can agree to this.

Business Strategy:

Marriot International is a company that has used generic business-level strategies successfully. Marriot is a worldwide franchisor and operator of hotels and lodging facilities. They are a top player in the Hotel industry and will continue to be for many years. Based on multiple competitive advantages, which include uniqueness, cost, and extent of their competitiveness. Marriott International, Inc. pursues multiple business level strategies. Marriott’s vast portfolio of brands allows them to have a strong presence in the market. This is part of their differentiation strategy.

 Differentiation Strategy: Marriot International uses the differentiation strategy to develop a product and service that uniquely satisfies a customers needs. By providing multiple lodging options, from moderately priced to priced, the Marriott has earned a reputation for innovation and quality. The value added provided by the company’s uniqueness allows it to charge a higher for upscale hotels.

 Cost Leadership Strategy Marriott International also offers brands that are aimed for a lower budget. Brands such as SpringHill Suites, and Courtyard target the upper moderate price tier segment, while Fairfield Inn targets the lower moderate price tier. The company excels in efficient cost production that enables to charge a low price compared to its competitors while still making a reasonable profit. The Marriott strives to keep costs low while catering to a broad range of customers.  Franchising Strategy: In order to be a global competitor, Marriot International adopted the strategy of franchising and managing hotels instead of becoming a full owner. In 2009, about 46 percent of the hotel rooms in the company’s system were operated under management agreements, 52 percent operated under franchise

agreements, while only 2 percent were leased or owned by the company. In a franchised property, the company foregoes direct control over employees and strives to build upon maintenance and internal operations. This reduced a great financial risk for the company while still allowing global growth. It was also beneficial during tough economic periods.

SWOT Analysis: Strengths

Weakness

Opportuni ties

Threats

1. High brand recognition and recall. 2. Technical innovations to improve customer .experiences and Constant upgrade of business processes. 3. Good employee retention with a total workforce of 150,000. 4. Has over 3700 hotels and resorts in over 70 countries. 5. Various brands range from attainable to aspirational. 1. Competition from long established hotel chains means limited market share. 2. Global expansion and high number of hotels may lead to brand dilution. 1. High potential in emerging markets. 2. Innovation in customer services. 3. Better interiors/Well done renovations. 4. Indian and as well as global hospitality sectors are looking at a boom. 1. Entry of several international brands along with the strong hold of long standing, well established Indian brands. 2. Competition on price points. 3. Stagnated growth.

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