Hospitality Business Strategy

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This report discusses the business strategy in the hospitality industry, specifically focusing on Marriott International hotel. It includes a stakeholders analysis, evaluation of external factors, analysis of the internal environment and capabilities, competitive forces, strategic directions, and the application of Ansoff's Product/Market Growth Matrix.

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Hospitality Business Strategy

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Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PART A...........................................................................................................................................1
A Stakeholders’ analysis of the group of people or organisations..............................................1
External factors that influence the strategies...............................................................................2
Internal environment and capabilities..........................................................................................3
Competitive forces.......................................................................................................................5
PART B............................................................................................................................................6
Strategic directions......................................................................................................................6
Application of Ansoff’s Product/Market Growth Matrix............................................................7
Strategic planning for a given hospitality organisation...............................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Business strategy can be describe as the process of organisation that includes planning,
analysing and selecting the best possible way to enhance activities of business. It is crucial for
organisation to develop effective and efficient business strategy in order to attain desired
objectives. business strategy is consider as the combination of all decisions which is taken and
action performed by organisation in order to gain competitive advantage over other rival
companies (Ruel and Njoku, 2020). This report is based on Marriott International hotel. This is
American multination company which is conducting its business practices in hospitality industry.
Marriot organisation was developed in year 1927 and founder of this organisation is J. Willard
Marriott and Alice Marriott. Head office of this company is located in Bethesda, Maryland, U.S.
This report includes stakeholders analysis in order to determine influence over business
practices. Different external and internal factors has been analysed. This report consist of
evaluation of the competitive forces market area. Different types of strategic directions for
business is determined in this report. Apart form this, appropriate growth platform and strategies
for business and strategies planning has been analysed.
MAIN BODY
PART A
A Stakeholders’ analysis of the group of people or organisations.
There are different individuals or group of people that are associated with business and lead
to have major impact on overall performance of business (Canhoto and Wei, 2021). it s essential
for respective company that is Marriott International hotel to determine different stakeholders
along with their impact on business and its practices.
Stakeholder analysis
Stakeholder analysis refer as the process of identifying different people according to their
participation level, interest as well as influencing capability in the process. Stakeholder analysis
in respect to Marriott International hotel is mention below –
Manage closely – This segment of stakeholder analysis consist of individuals who have high
power as well as high interest in business activities. For example owners, CEO of respective
company.
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Keep satisfied – It includes all those stakeholders who have high power to influence
decision making but low interest in business practices. This consist of government and legal
authority.
Keep informed – This segment includes people that have high interest in business activities
but have low power to take decisions. For example employees or customers of Marriott
International hotel.
Monitor – Stakeholders who have low power as well as low interest in business practices are
considered in this segment. For example non profit organisation, media people and so on.
External factors that influence the strategies.
There are different factors and elements of business which will lead to have affect over
business and it will influence over decision making practices. It is important that Marriott
International hotel is consider impact of external factors of business environment in order to
accomplish desired goals and objective of business. External environment can be describe as the
outer surrounding of business that lead to have direct or indirect affect over business and its
activities (Nikolskaya and et.al., 2020). In order to determine influence of external factors on
strategy of respective company, Marriott International hotel PESTLE analysis is considered.
PESTEL Analysis
PESTLE stands for political, economical, social, technological, legal or environmental
factors. Different elements of PESTLE analysis is mention below –
Political factor – This factor refers to different rules and policies which are develop by
government and authority to carry out business practices. Political factor consist of taxation
policies, rules and regulation, tariffs and so on. Marriott International hotel have to consider
changes in rules and regulation that is developed by UK government while developing
effective business strategy.
Economical factor Economical factor will lead to have significant influence over
performance and profitability of business. it is important that Marriott International hotel is
consider different factors such as economic growth rate, interest rates, exchange rates,
inflation, employment rates and disposable income. Respective company will consider
economic growth rates of UK market area while taking important business decisions and
developing strategies.
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Social factor – Social factor consist of population growth, age distribution, belief and
psychology of customers regarding the products and services offered by respective company
(Aladag and et.al., 2020). Marriott International hotel needs to develop strategies which are
significant for meeting needs and requirements of customers. This will assist in attracting
more and more customers towards business as well as help in accomplishing desired goals.
Technological factor – This is one of the crucial external factor and it will directly influence
business performance as well as decision making practices. Technology is supportive in
order to conduct business practices in better manner. Adoption of new and innovative
technology will lead to have significant impact on enhance performance and profitability of
business.
Legal factor – Legal factor consist of health and safety act, equal opportunities, consumer
rights and laws, employment act and various other laws. It is essential that Marriott
International hotel is developing its strategies which is according to the consumer rights.
This will assist in providing better services and meeting with their needs and wants.
Environmental factor – This factors is crucial for business as it will affect over functioning
of organisation. Environmental factor consist of climate changes, air pollution, water
pollution and different other environmental issues. It is essential that respective company is
conducting different corporate social responsibility practices in order to overcome with the
environmental issues.
Internal environment and capabilities
It is important for company to determine its internal business environment as well as
capabilities for taking better and accurate business decisions (Tajeddini, Martin and Ali, 2020).
Marriott International hotel needs to determine number of elements related to internal
environment in order to enhance business practices. There are different models and approaches
that are significant for determining internal environment as well as capabilities of business.
SWOT analysis and VRIO model in respect to Marriott International hotel is mention below –
SWOT analysis
SWOT analysis stands for strength, weakness, opportunity and threats. It is very important
for respective company, Marriott International hotel to consider SWOT analysis for taking better
decision and enhancing business practices. Different elements of SWOT analysis are –
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Strength – Marriott International is a well established company which is providing its
products and services to large market area. This company has strong global presence and it
is able to successfully meet with the needs and requirements of customers. High loyalty of
customers can be consider as major strength of Marriott International hotel.
Weakness – There are some weakness of respective company which lead to have negative
impact on business practices (Ioannidis and et.al., 2021). Marriott International hotel is not
able to position its products and services in effective manner. This company is majorly
focusing on small segment that affects its sales and revenues.
Opportunity – There are number of opportunities available for Marriott International hotel in
order to enhance its overall performance and attain desired goals. This company needs to
consider new and advance technology for providing better services and products to potential
customers.
Threat – Marriott International hotel is dealing in highly competitive environment. This can
be consider as the major threat form respective company as it has influence over its
performance and productivity. There are various strong rival organisation such as Holiday
Inn, Hilton and many other.
The VRIO Framework
This is effective strategic framework that assist company to determine different resources
and capabilities of business. This tools is significant for gaining long term competitive
advantage. VRIO refers to Valuable, Rare, Inimitable and organized. This model is mention
below in respect to Marriott International hotel.
Resources Valuable Rare Inimitable Organized
Financial
resources
- - -
Technology - -
Employees -
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Products and
services
- -
Financial resources – This is consider as the valuable resources of respective
company. Financial resources can be describe as all those resources which is helpful
for successfully and effectively conducting business practices. Marriott International
hotel has strong financial resources and assets that is helpful for taking better
decisions.
Technology – Technology that is used by Marriott International hotel is very
effective and efficient in order to meet with the needs and requirements of
customers. Technology of respective company is valuable and rare resources which
directly enhance its practices.
Employees – Employees are the workforces which is using their full potential and
capability to conduct business practices effectively. Marriott International hotel has
strong employees which is valuable, rare and inimitable resources (Shulga, Busser
and Bai, 2021).
Products and services – This organisation is providing high quality products and
services to customers in order to meet with their demand. Products and services
which is offered by Marriott International hotel is rare and well organised resources.
Competitive forces
This is consider as effective and efficient tools which is consider by organisation in order
to determine different forces of market that affect overall functioning and performance of
business. It is important that respective company is considering competitive forces in order to
enhance overall performance and productivity of business. Porter Five Forces Analysis is a
strategic management instrument to investigate industry and comprehend hidden switches of
productivity in a given industry. Porters five forces includes threat of new entrant, bargaining
power of suppliers, bargaining power of buyers, Threat form substitute products and rivalry
among current companies. Porter’s five force model is mention below in detail –
Porter’s Five Forces model
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Threat of new entrant – Marriott International hotel is conducting its business practices
from many years. This organisation has developed its strong brand image in market area
as well as strong customer base. So threat of new entrant force has low impact on overall
practices of respective company.
Bargaining power of suppliers – Respective organisation to buying resources and other
material from numerous suppliers. Due to this, dominant position of suppliers decreases
in market area. Marriott International hotel face low impact on bargaining power of
suppliers.
Bargaining power of buyers – Customers are very important part of business dealing in
hospitability industry (Cerchione and Bansal, 2020). It has been determined that buyers
are very demanding and Marriott International hotel focus on meeting demand of
potential customers. so bargaining power of buyers has moderate impact on respective
company performance.
Threat form substitute products – Introduction of new products and services in market
area which is able to successfully meet requirement of Marriott International hotel
customers is consider as threat form substitute products. There are some business which
is providing similar types of services to customers so it has moderate impact on
respective business.
Rivalry among current companies – This force will lead to have high influence on overall
performance and productivity of business. Marriott International hotel is dealing in highly
competitive environment in which companies are providing its products and services in
very creative manner. Respective organisation has major threat form rivalry among
existing business.
PART B
Strategic directions
It is crucial for respective company to develop effective and strong strategies in order to
enhance overall functioning and performance of business. There are different types of strategic
direction that are available for organisation and it will support in increasing business productivity
and profitability. In order to determine different strategic directions which is available for
Marriott International hotel, Porter’s Generic Strategies is mention below –
Porter’s Generic Strategies
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This is significant approach for determining different elements which are associated with
the industry (Poretti and Blal, 2020). Through this strategic management tool respective
company that is Marriott International hotel is able to analyse whether a profitability of firm is
above or below the averages of industry. This includes cost leadership strategy, differentiation
strategy and focus strategy.
Cost leadership strategy – This can be describe as the strategy in which organisation is
focusing to develop products and services at lower cost. Cost leadership is a strategy in
which company is consider as the low cost producer in the industry. It is essential for
Marriott International organisation to providing high quality products and services to
customers with low cost in industry. This strategy will lead to attract more and more
customers towards business.
Differentiation strategy – In this strategy, the main motive of organisation is to provide
different products or services as compare to the offerings of rival company. This is
significant for influencing customers and attracting them towards offerings of
organisation. Marriott International company needs to identify needs requirements of
customers in order to provide more valuable or creative products and services.
Differentiation strategy will assist in gaining competitive advantage over other rival
companies.
Focus strategy – The focus strategy is classified into two parts that is cost focus and
differentiation focus. In this type of business strategy organisation is focusing on
providing products and services to limited or niche market area. In cost focus strategy
organisation is providing lower cost products to limited targeted segment. Differentiation
focus strategy helps in providing differentiated products to targeted market area.
Application of Ansoff’s Product/Market Growth Matrix.
It is essential for Marriott International organisation to grow and develop its business
practices in market area. There are different ways and strategies that will assist respective
company to enhance functioning of organisation as well as conduct business practices effectively
and efficiently. Ansoff matrix is mention below in respect to Marriott International company.
Anoff’s Matrix
This matrix refers to product or market expansion grid. This is very effective and efficient tools
that is consider by organisation in order to analyse different strategies which will lead to growth
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of business. It consist of four different strategies that is significant for the use for growth and
development of business. This matrix assist organisation to determine different risk associated
with each strategy.
Market penetration – In this strategy organisation is focusing on providing its existing
products and services to current market area. This is significant business strategy that
helps in overall improvement in sales and profitability. Marriott International company
needs to offer its current products and services to existing market customer base.
Product development – This refers to the strategy in which new products and services is
provided by company to current market area (Senbeto and Hon, 2020). Product
development strategy is significant in order to meet with the requirements of customers
as well as increase sales of products and services.
Market development – Market development strategy can be describe as the action plan in
which organisation is focusing on providing current products and services to new market
area. This is significant strategy for market growth and expansion. By considering this
strategy respective company will be able to increase market share.
Diversification – In this strategy, Marriott International company focus on entering new
market by introducing new products and services. Diversification strategy is consider as
one of the most risky strategy that will lead to have major impact on business and its
practices.
Thus, it has been determined that for Marriott International company product development is
very effective and efficient strategy. By considering product development strategy respective
company will be able to provide new and innovative products and services to potential
customers.
Strategic planning for a given hospitality organisation.
There are different models and approaches that needs to be consider by organisation for
strategic planning. In hospitality industry strategic planning play very important role and it will
provide number of benefits to business. Strategic planning can be describe as the art of
developing effective strategies for business. This includes planning, analysing, evaluating
different elements. Strategic planning is the way toward reporting and setting up a heading of
your private company—by evaluating both where you are and where you're going. The strategic
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arrangement gives you a spot to record your main goal, vision, and qualities, just as your drawn
out objectives and the activity plans. Strategic planning is the craft of making explicit business
systems, carrying out them, and assessing the effects of executing the arrangement, as to an
organization's generally speaking long haul objectives or wants.
Strategic planning process – This refers to the documentation process which includes
different elements and aspects to enhance overall performance of business. Strategic
planning process of Marriott International organisation includes determining strategic
position, prioritizing objectives, developing strategic plan, executing or managing plans
as well as review plans (Senbeto and Hon, 2020). Marriott International company needs
to determine different needs and demands of customers in order to create new products.
Tactical strategic priorities Marriott International hotel is considering product
development strategy in order to differentiate its products and services from other rival
companies. This is very effective for growth and development of business and assist in
attaining desired goals.
Objectives – The main objective of respective company that is Marriott International is to
increase productivity and profitability of business by successfully meeting with the needs
and wants of customers. This helps in creating strong brand image as well as assist in
developing better relationship with customers.
CONCLUSION
From the above report it can be concluded that business strategy play significant role in
enhance business practices or accomplishing desired goals. business strategy is consider as the
combination of all decisions which is taken and action performed by organisation in order to gain
competitive advantage over other rival companies. Organisation needs to determine internal and
external factors that could lead to have impact over business strategy and its functioning. There
are different models and approaches which is effective for developing better and effective
strategy for business success. Porters five force model helps in determining different forces of
market area that have impact on business performance.
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REFERENCES
Books and Journals
Kumar and et.al., 2021. What do we know about business strategy and environmental research?
Insights from Business Strategy and the Environment. Business Strategy and the Environment.
Yuan and et.al, 2020. Business strategy and corporate social responsibility. Journal of Business
Ethics, 162(2), pp.359-377.
Lim, E.K., Chalmers, K. and Hanlon, D., 2018. The influence of business strategy on annual
report readability. Journal of Accounting and Public Policy, 37(1), pp.65-81.
Antamoshkina, O.I. and Zinina, O.V., 2019, May. A methodology for assessing the prospects of
modifying business strategy of an enterprise in the external environment. In IOP Conference
Series: Materials Science and Engineering (Vol. 537, No. 4, p. 042023). IOP Publishing.
Maniora, J., 2018. Mismanagement of sustainability: What business strategy makes the
difference? Empirical evidence from the USA. Journal of Business Ethics, 152(4), pp.931-947.
Ali, B.J. and Anwar, G., 2021. Business strategy: The influence of Strategic Competitiveness on
competitive advantage. International Journal of Electrical, Electronics and Computers, 6(2).
Puspitawati, L. and Susanto, A., 2018, November. The Influence of Business Strategy Through
the Management Accounting Information System to the Quality of Management Accounting
Information-Evidence in Indonesia. In International Conference on Business, Economic, Social
Science and Humanities (ICOBEST 2018) (pp. 24-29). Atlantis Press.
Bourguignon, R. and Floquet, M., 2019. When union strategy meets business strategy: The union
voucher at Axa. Business History, 61(2), pp.260-280.
Nikbakht, M.R., Omrani, H. and Akhoundi, O., 2019. Client business strategy and audit
fee. Applied Research in Financial Reporting, 8(1), pp.97-118.
Games, D., Kartika, R., Sari, D.K. and Assariy, A., 2020. Business incubator effectiveness and
commercialization strategy: a thematic analysis. Journal of Science and Technology Policy
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Peng, M.W., 2021. Global strategy. Cengage learning.
Ostaev, G.Y., and et.al., 2019. Agricultural business planning management: development,
motivation, strategy and decision making. Indo American Journal of Pharmaceutical
Sciences, 6(5), pp.10960-10967.
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Clemons, E., and et.al., 2019, January. Platforms in the sharing economy: does business strategy
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