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Analysis Porter’s Five Forces model
Porter’s five force model
Porter's five force model l and t
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Table of Content 1. Introduction to Strategy 3 2. Conducting an Environmental Analysis 5 3. Investigating Strategic Alternatives 8 4. Formulating a Strategy 11 5. Implementing a Strategy 13 6. Monitoring and Evaluating Strategic Performance 15 Bibliography 17 Appendix I: Porter’s 5 Forces Model for Marriott International Inc. 19 1. Introduction to Strategy Strategic management is the set of managerial decision and action that determines the long-run performance of a corporation. It includes environmental scanning (both external and internal), strategy formulation (strategic or long range planning), strategy implementation, and evaluation and control (Hunger & Wheelen, 2011). In this report I will do research about the strategy of Marriott International, Inc. I will give advise on how Marriott can improve their strategy and I will come up with an advisory strategy. Marriott is organized like picture 1.1, focused on their vision; Marriott did come up with a vision; To be the number 1 hospitality company in the world. In order to achieve this vision there are several parts which are helpful. The purpose of this vision. Which explains why Marriott choose this vision and who is involved. Furthermore there are values, which are helping Marriott by gaining a competitive advantage. Moreover there is a strategy involved, in which is stated where Marriott has to focus on (those focus points are listed in picture 1.2). Finally, Marriott also had to measure how this vision is performing. They are looking at 3 success measures; Loyalty, Profitability and Growth. Marriott International, Inc is founded in 1927 and in 1983 it became the first hotel chain designed for business travellers. Up till now, Marriott has grown to a chain with 18 different brands and broad segment groups, with 3,900 properties over 72 countries all over the world and with around 42 million members in their loyalty program. As of March 2013, Marriott International Inc owned six hotels, leased 38 hotels, managed 1,021 hotels and franchised 2,571 hotels. Furthermore Marriott is having 387 hotels (67,000 rooms) in the pipeline since the start of 2013. (Freed, 2013) (Hampton, 2014) In order to keep consistent, Marriott has a strategy for all their brands and properties. This strategy consists of six parts, which is shown in the picture 1.
Marriottt International, Inc. is an American diversified hospitality company with broad portfolio of hotels and related lodging facilities.It has more than 3900 properties in over 72 countries and territories around the world. Founded by J. Willard and Alice Marriottt and guided by Marriottt family leadership for more than 80 years, the company is headquartered in Bethesda, Maryland, USA, and reported revenues of nearly $13 billion in fiscal year 2013 (Marriottt.com)
There is another benefit if Marriott performs well on increasing its profit; Marriott will be able on the one hand to increase the salary of their employees and on the other hand to improve the quality of services provided to the customers.
MGM Resorts International has a very long, extensive history from where it started almost 50 years ago with CEO and founder, Kirk Kerkorian. Founder Kirk Kerkorian, opened the original MGM Grand on the corner of Flamingo and Las Vegas Boulevard in 1973. The grand opening of MGM Grand debuted as the world’s largest hotel with 2,100 rooms. Five years following the grand opening of the first MGM Grand, another MGM Grand was opened in Reno. Over the next few decades, Kirk Kerkorian would be busy with many acquisitions, changes and even some unfortunate events. MGM Grand faced what was called “one of the worst high-rise fires” in U.S. history with 87 deaths. The MGM Grand was then rebuilt on the corner of Tropicana and Las Vegas Boulevard in 1993 with a seasonal outdoor theme park.
Founded in 1919, Hilton Worldwide has remained a beacon of innovation, quality, and success. What Hilton Worldwide calls their mission statement imposes its worldwide high status: “We will be the preeminent global hospitality company - the first choice of guests, team members and owners alike.” Fierce competition, however, does currently exist among hotel corporations within the market. Marriott International, Hilton’s main competitor, currently stands as the third-ranked world leader within the industry (according to hospitalitynet.org), coming in after Hilton. Other competition faced by Hilton comes from Wyndham Worldwide, Starwood Hotels and Resorts, and Best Western, to name a few. Affiliated with ten different hotel brands, Hilton Worldwide provides its guests with the advantage of choosing from any one of their 4,000 operating hotels located throughout 90 different countries. This has evidently contributed to Hilton Worldwide becoming one of the top leaders (ranked second to be exact) in the hospitality industry, despite their competition. The vision of Hilton Worldwide is “to fill the earth with the light and warmth of hospitality.” As the modern luxury hotel, Hilton has created a prestigious heritage with a modern attitude. The values of Hilton Hotels are stated uniquely, giving one value to each letter that constitutes the word for the hotel brand. “H” stands for Hospitality– “We are passionate about delivering exceptional guest experiences”; “I” stands for Integrity– “We do the right thing, all the time”; “L” stands for Leadership– “We are leaders in our industry and in our communities”; “T” stands for Teamwork– “We are team players in everything we do”; “O” stands for Ownership– “We are the owners of our actions and dec...
47% of Marriott’s rooms are in North American Limited Service, 30% are classified as North American Full Service, and the remaining 23% of its rooms are in the international segment (Marriott, 2015). Recognizing that travelers have a range of budgetary and amenities needs, Marriott operates its properties under a variety of different brand names, 19 in total, each of which has its own “price and service points” (Marriott, 2015). Most of Marriott’s brands are at the high end of the market, which includes such widely recognized luxury brands as the Ritz-Carlton, JW Marriott, Renaissance Hotels, Bulgari Hotels, Marriott Executive Apartments, Marriott Vacation Club, Edition Hotels, Autograph Collection Hotels, Gaylord Hotels, and Marriott Hotels (Marriott, 2015). These properties often command nightly rental rates that can run several hundred dollars a night and offer a wide range of amenities well suited for both business and pleasure travelers. These properties are classified as “Full-Service.” Marriott also offers a range of “Limited-Service” brands that do not contain as many amenities and tend to be much cheaper than the Full-Service line. Examples of these properties include Courtyard, Residence Inn, SpringHill Suites, and Fairfield Inn & Suites (Marriott, 2015). Even though these properties are considered Limited-Service, they do offer considerably nicer accommodations and more amenities than other types of budget motels and hotels. In contrast to many of the other hotel brands, Marriott International does not operate any midscale, economy, or budget
Rebranding Strategy - Internationally, Hilton hotels are acknowledged by the mid to senior company executives, and are also well-known among global tour operators. They exported management expertise to Australia, Egypt and Singapore, where The Oberoi Group took control of the running of existing luxury hotels They entered into a strategic arrangement with Hilton for the international marketing and management of reservations of the "Trident" hotels in 2004 as part of their globalization strategy. Under this arrangement, all the "Trident" hotels were re-branded as "Trident Hilton". At the same time, the Oberoi Towers in Mumbai was re-branded as the Hilton Towers. As of April 2008, this alliance has ended and the "Trident" Hilton hotels and the Hilt...
The hospitality industry in the United States is large, complex and intensely competitive. Within this industry is a segment comprised of hotels and motels, which will be the relevant sector for this marketing plan. To note, the hotel and motel industry in the United States had an estimated value of $137.5 billion as of the end of 2012 (MarketLine, 2012). The industry is forecasted to experience a compound annual growth rate (CAGR) of 5.5% from 2011 to 2016, to attain a value of $179.5 billion (MarketLine, 2012). In this industry, the most lucrative segment is leisure which has a market share of 71.1% (MarketLine, 2012). Sunshine Inn (fictional) is a small independent hotel that operates within the leisure segment of the hotel and motel industry in the United States. It is an adventure-themed hotel situated along the California-Nevada border in order to capture the tourist market for Lake Tahoe. Sunshine Inn has 30 bedrooms and 15 suites and offers specialty home-cooked type meals to guests for breakfast, lunch and dinner. It must be emphasized that the hotel and motel industry is one of the most fiercely competitive in the United States, and in fact, in the world (Johanson & Cho, 2009; Kosarkoska, 2010). Therefore, in order to compete with large hotel chains with five-star hotel rankings, Sunshine Inn will have to depend on strategic approaches, such as effectively targeting and positioning itself in the appropriate market, as well as developing a marketing plan that will promote the unique value propositions that only small, personalized hotels can provide: excellent customer service, customized adventure packages as well as a total customer experience that revolves around enjoyment, fun and discovery. As this marketing plan wi...
Who is the hotel’s target market and what services do they use to attract and satisfy this market?
The external environment of the hotel industry in is very competitive and already well established. Trends in the market include promotional campaigns to customers using the "more bang for your buck," method. There are several different segments of the hotel industry including: luxury, upscale, mid-market with food and beverage, mid-market without food and beverage, economy, and budget. Each different segment offers certain amenities to appeal to consumers depending on what they are looking for in an over night stay away from home. As McDonald's looks at entering the hotel industry they have looked at several important issues dealing with an entry into this market. McDonald's would like to enter the market in the state of Illinois where the company's headquarters is. Illinois leads all other states in money spent on tourism totaling $61.1 million in the year 2000. Illinois also ranked fourth in the nation for leisure person trips in 2000. Hotel industry has several important barriers to entry including cost of entry, ability to differentiate from other hotels, and competition in every hotel segment.
... European market currently offers the highest demand for hotels especially in gateway cities. In attempts to deal with this problem they decided to launch two new brands “Autograph” and “Edition” which are aimed at catering to the luxury market and are meant to increase Marriott’s expansion plans.
History of Hilton hotel has been very interesting as it started as Mobley Hotel in year 1919 a small building. Because, when the company started it had no plans or ideas of expanding, the sole purpose was to serve as a place for the travelers to stay where they can comfortably enjoy a night or few and carry on towards their journey. After twenty-seven years of business and hard work, this small hotel went nationally in eleven states within United States, known as Hilton. Currently they have four thousand worldwide properties, either directly owned or franchised (including third party), in seventy-eight countries. Hilton even though allows franchises but there policies remain the same and direct Hilton officials do all the upper level management. The company name Hilton understands for Hosp...
The company that contributed most to this figure is the British hotel chain InterContinental Hotels Group where in 2013, the result obtained was of $ 21.6 billion in over 4,600 hotels worldwide, include Hilton Worldwide and Marriott International with where each hotel has a 3992 and 3672 worldwide.
Moreover, the InterContinental Hotels & Resorts is considered the first international hotel brand in the world, as it began operations in the year 1946 (About InterContinental Hotels Group Brands, 2015). Over time the hotel group has evolved to encompass quality hotel rooms not only in North America, but in Central and South America, Europe, the Middle East, Africa, Australia, and Asia-Pacific (IHG – InterContinental Hotels Group, 2015). In addition, they have acquired extended stay facilities and the Hualuxe Hotels & Resorts, which specifically “celebrates the essence of Chinese hospitality” (About InterContinental Hotels Group Brands, 2015). In my opinion, this shows that their target market has changed by expanding their scope of travel, which means they are traveling to farther and farther locations and require the familiar surroundings with equivalent product quality at the final destination. The InterContinental Hotels Group is in the fourth and final stage of the product life cycle, which is the decline stage (Editorial Board, 2014, p. 212). Indeed, the brands lengthy history indicates it has loyal customers, but its addition of innovations indicates the targeting of new customers for the organization, which are clear signs of a business in the decline stage of the product life cycle (Editorial Board, 2014, p.
It is imperative to the success of The Ritz-Carlton that they have selected the right location, provided the customer with the product that they desire and have the right employees to successful provide the service to its customers.
Whitla, P., Walters, P., Davies, H. 2007, Global strategies in the international hotel industry, Hospitality Management, vol. 26, pp. 777–792.