Hospitality Business Strategy: Impact of Macro and Internal Environment on Marriott International Inc.

This report analyses the impact of macro and internal environment on Marriott International Inc. using frameworks such as PESTLE, SWOT, VRIO, Porter's Five Forces, and Ansoff's Matrix. It recommends growth strategies for Marriott International Inc. in the hospitality industry.

Hospitality
Business
Strategies

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Analyse the impact and influence of the macro environment on a given hospitality
organisation and its strategies by applying appropriate frameworks such as PESTLE and
SWOT analysis...........................................................................................................................3
Analyse the internal environment and capabilities of a given hospitality organisation using
appropriate frameworks such as the VRIO Framework or McKinsey’s 7s Framework.............6
Applying Porter’s Five Forces model, evaluate the competitive forces of a given market sector
for a hospitality organisation.......................................................................................................7
Justify and recommend the most appropriate growth platform and strategies through the
application of Ansoff’s Product/Market Growth Matrix. ..........................................................9
Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given hospitality organisation. .............................................................................................11
Here onwards, a brief observation of strategic planning in context to Marriott International
Inc. is being mentioned. The theories and concepts in below mentioned theories can be
implemented to create effective strategic plans for the organisation........................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
There are numerous businesses operating in business world. Every business has its own
specific target to achieve. Businesses follow a well defined path to achieve their targets, All the
plans, decisions, actions and suggestions being formed or taken to achieve the final business
goal along with achievement of competitive position in the market is called Business strategy. In
concise way, it refers to the roadmap of actions required to achieve final business objective.
Hence forth in this report, a detailed study of internal and external impact/influence on strategic
business planning will be observed by using multiple analysis tools. This report is being formed
in context to Marriott International Inc. to deeply analyse the business environment of
hospitality industry.
Marriott International Inc. is a global leading brand in hospitality industry. Founded in
1927, it is headquartered in Bethesda, Maryland – USA. Catering its services in Premium luxury
and mid market size segments. With current portfolio of 30 brands, 13,32,826 rooms presence in
131 countries and with total workforce count of 176000 employees, Marriott itself is a
benchmark in hospitality industry. Furthermore in this report, a brief business strategic
information of Marriott has been presented.
MAIN BODY
Analyse the impact and influence of the macro environment on a given hospitality organisation
and its strategies by applying appropriate frameworks such as PESTLE and SWOT
analysis.
Here to analyse the impact of macro environment on Marriott International Inc. Two
most sought tools and framework named as PESTLE and SWOT are used.
PESTLE refers to the framework or set of tools used by companies or organisations to examine
or analyse macro (External) environment in which a company commences its business
operations. PESTLE stands for political, economic, social, technological, legal, and
environmental factors that influence business from outside environment.
Forth mentioned are the factors that could affect Marriott International Inc. by using PESTLE
framework.

 Political Factors – Marriott being present in multiple countries has hotels at popular
tourists destinations. The biggest threat of terrorist attack is always there as hotels and
crowded tourists destinations are the foremost target of terrorist attack. Also, any
negative change in political relations between countries may cause restricted travelling to
certain places causing fall in business for Marriott hotels.
 Economic Factors – Due to rise in inflation across the globe, is a serious concern for
Marriott as slow down in economy causes reduction in buying power of individual and
the ability to travel for leisure. Also, business visits are being reduced by such
economical impact.
 Social Factors – Recent social changes have big surprises for Marriott hotels. As boom
in world travelling culture has given Marriott a positive business. People are becoming
more travel enthusiast and targetting multiple destination to explore where Marriott has
its presence already. Giving a boom in experiencing more customers to its hotels.
 Technological Factors – Though several technological advancements have created
simple interface for both customers and Marriott in hotel industry. i.e. online
reservations, early check-ins through specific phone applications etc. But emerging of
online accommodation competitors like Airbnb has somewhere reduced the customer
counts of big giants like Marriott.(Dogru, Erdogan and Kizildag, 2018)
 Legal Factors – There have been multiple legal actions been taken on competitors of
hotel industry. Airbnb has been fined in various states and also banned at multiple
destinations giving a positive advantage to Marriott. Apart, In USA, Marriott has faced
legal order to increase minimal wage up to $15 / hour, leading to higher labour cost and
service charges.
 Environmental Factors – There are multiple environmental factors that may affect
business of Marriott. For example – Increase in fuel prices could lead to increased travel
cost and less demand for hotel rooms and vice versa. Apart, climate change causing rise
in level of water at ocean being a potential threat for beach side resorts of Marriott.
(Ashutosh, 2021)

External environment effects on Marriott International Inc. through SWOT lens -
Swot is one of the most sought framework used to evaluate and determine company's
competitive position in the market. It refers to the process of analysing the (strengths,
weaknesses, opportunities and threats) of a company or organisation. Hereby, mentioned is the
SWOT analysis of Marriott International Inc. -
Strengths
 Multi Brand Acquisition – Marriott has
acquired some of the big names like
Ritz Carlton, Gaylord and other resorts
eventually amplifying the revenue of
the company.
 Established Market leader – It is the
major player on hospitality industry
with 665 hotels, 26 billion dollars of
assets, establishing deep and strong
roots in the market.
Weaknesses
 Strict rules and regulations – Marriott
has framed some serious strict rules and
regulations for its employees. It creates
harsh working environment leading to
down-gradation of productivity.
 Unprotected data – There have been
incidents where hackers broke into
online systems of Marriott where data
of 500 million customers was stolen.
Data privacy and protection is a serious
concern for Marriott.

Opportunities
 Service customisation plans – To offer
personal customization services to its
customers can be a huge plus for
Marriott where customers can
customise their stay comfort plans and
leisure package accordingly.
 Targetting developing economies – In
developing countries tourism market is
expanding. Marriott has great
opportunity to expand its business by
opening hotels and resorts in such
countries.
Threats
 Terrorism – Tourist destinations, hotels
and resorts are always targetted by
terrorist for attacks. Terrorist targets 5
star hotels like Marriott so that they
could make a statement.
 Arising Competition – Market
competition has been severe in
hospitality industry. Existence of few
major players like Novotel and Hilton
are capable of increasing their market
share giving tough competition to
Marriott.
Analyse the internal environment and capabilities of a given hospitality organisation using
appropriate frameworks such as the VRIO Framework or McKinsey’s 7s Framework.
To analyse the internal environment and capabilities of Marriott International Inc. VRIO
framework has been used.
VRIO refers to the framework or technique which is resource focused and used to
evaluate the relative importance of resources to a firm. VRIO focuses on internal analysis of
entire resources a firm has to operate its business operations and determine the competitive edge
a company has over its existing or new competitors.(Ebersberger, Herstad and Nordli, 2021)
Further discussed are the key points of framework in context to Marriott International Inc. -
Resources
and
Capabilities
Valuable Rare Imitable Organised Competitive
implications
Market
Position
Yes Yes Challenging Yes Sustainable
competitive

advantage
Products and
Services
Yes No Yes Yes Sustainable
competitive
advantage
Financial
Resources
Yes Yes Challenging Yes Sustainable
competitive
advantage
Employees
and
Workforces
Yes Yes No Yes Strong
competitive
advantage
 Market Position – Marriott holds strong market position as its been in business since
1927, its market position is valuable, rare and quite hard to imitate for its competitors. It
requires a long time span to establish prestige position for the competition alike Marriott.
 Products and Services – Services offered by Marriott are quite valuable but not rare as
the chances of offering similar services are high in hotel industry apart any new service
introduced may easily be imitated by competitors or new entrants in the market.
 Financial Resources – Marriott's financial resources are highly valuable, rare as it has
strong financial reserves, hard to imitate because these resources are acquired by
company by prolonged profits over the years. It requires the same efforts of prolonged
years to accumulate such reserves for any new entrant.
 Employees and Workforces – Marriott's employees are highly valuable and a proportion
of them is highly trained resulting in bringing more productivity to the organisation.
Also, workforce can be considered as rare because its been trained and better
compensation makes sure the employees remains with Marriott. It is quite hard or
challenging for any new entrant to employ such workforce also it requires huge sum to be
spent on training and development to match with Marriott's workforce which is quite
challenging.

All key points of VRIO analysis of Marriott has a mutual aspect and that is organised
resources and capabilities. All the resources are organised enough that sums up in creating
sustainable competitive advantage for Marriott International Inc. over the new entrants or
competitors in hospitality industry.
Applying Porter’s Five Forces model, evaluate the competitive forces of a given market sector
for a hospitality organisation.
 Porter's five forces analysis – Porter's five forces model is a combination of tools that
are used to study the competitiveness existing in the market of a company, organisation
or any Industry. Using porter's five forces analysis method any company can determine
its Industry's strengths and weaknesses along with framing corporate strategy to survive
in the market.(George, 2021)
 Henceforth, detailed analysis of competitive market in hospitality industry has been
conducted in context to Marriott International Inc. by using Porter's 5 forces model -
 Potential of new entrants – Marriott is a well established renowned brand that has
cemented its position in premium, luxury and higher mid class segments of hospitality
services in the industry. Threat of new entrant is would be low here as it requires a large
sum of capital to be invested and it is quite difficult to arrange such capital to compete
with player like Marriott. Apart, recent COVID pandemic has influenced on work from
home leading in downfall of business trips of companies giving a loss of revenue to hotel
industry. Considering this might create discouragement for any new entrant in market.
(Kim, Roehl and Lee, 2019)
 Competition in the Industry – Competition for Marriott in the industry is considered on
high scale as there are other big players offering same services and facilities to its
customers in the same price range. Few of them includes – Carlson, Hyatt, Hilton,Four
seasons hotels and resorts etc. They compete with each other by offering heavy discounts
and offers to their customers. Still, Marriott leads in competition as it has higher no. of

hotels and resorts in construction pipelines in multiple countries making him a step ahead
from its competitors.
 Power of Suppliers – Bargaining power of suppliers is considered as low, reason being
Marriott has excellent brand value and its suppliers consider it as one of their biggest
client. Marriott requires suppliers for the supply of fooding raw materials, infrastructure
and maintenance for its hotels. Marriott is very specific in choosing its suppliers and
cares for maintaining long and strong relationship with them. Whenever Marriott brings
in new product a proper and long inspection is finalized. This entire process makes its
suppliers bargaining power low. (Rossidis, Belias and Vasiliadis, 2021)
 Power of Customers – In relation with Marriott, customer's bargaining power can be
considered as moderate because customer base in hospitality industry can be divided into
two categories. One who travels into luxury hotels for leisure and vacation purpose such
customers have low power as they are insignificant for the sales of hotel. On the other
hand Marriott has its customers in the form of business offers who have a tie up with the
hotels for their employee's stay during business trips. Such customers are regular
customers for Marriott.
 Threat of Substitutes – Threat of substitute is considered higher for Marriott. There are
multiple substitutes emerged in recent years and are able to offer luxury services and
facilities to customers at more reasonable prices. Homestays concepts has experienced
boom in market share in recent years. Concepts like Airbnb, bubble rooms, ice homes,
tree houses etc. have created an excitement in customers to visit and experience new
adventure in staying at such places rather than hotel rooms.(Konovalova and et. al., 2018)
Also, work from home culture has given Marriott and other luxury brands loss of
business in past few years. But Marriott is always preferred by customers seeking
standard and quality service without getting into hassle of searching comfortable places
for their stay.

Justify and recommend the most appropriate growth platform and strategies through the
application of Ansoff’s Product/Market Growth Matrix.
Ansoff Matrix refers to the strategies implemented by marketers of a company to
understand the market conditions and to develop productive and efficient strategies for the
growth and expansion of their customer base and introducing new products in existing market or
acquiring new market with existing products. (Nikolskaya and et. al. 2018)
Mentioned below are the growth strategies of Marriott International Inc. by using Ansoff's
growth matrix.
 Market Penetration – Marriott being an global brand currently have multiple hotels in
construction pipeline is striving towards growth in market share and revenues by opening
more hotels in various developing economies. This is its market penetration growth
strategy. Company is focused in implementing this strategy because it intends to grow in
the existing industry through the production of existing services. As a result of which its
products/services can experience growth without risking financial performance.(Li and
Singal, 2021)
 Product/Service development – This strategy involves introducing more and new
products and services in existing market. Introduction of technological advancement like
online reservations, mobile check-ins etc. services can be useful source to grab the eye of
new clients. Also adding free spas service and operating cruise holiday business packages
would be a plus to attract more customer base in the market. This strategy could be
beneficial as market environment, customer tastes and preferences are changing rapidly.
Thus, product development strategy would turnout to be a gem for Marriott.
 Market Development – It is the strategy where companies target new markets by
offering their existing products and services. It could be beneficial for Marriott to target
the market of developing countries emphasising on development of tourists destination in
their countries. Company should focus on offering its services by opening luxurious new
hotels with discounted existing services and schemes for their elite customers and leisure
packages to attract new market. Though heavy financial investment is required to acquire

new market but it gives an advantage over competitors by developing and taking over
new market share. (Li and Singal, 2019)
 Diversification – Diversification is considered as the most risky and last business
strategy that could be implemented in acquiring new customer base. This strategy is risky
as it requires launching of new products or services in complete new marketplace. So
here, Both products and market are new for the company. It could contain high risks for
Marriott to enter in market with such business strategy as being a luxurious brand it
requires heavy capital investment and failures in such market will lead in huge loss for
the Marriott.
By conducting deep observation through above mentioned strategies it is recommended
to use strategies like Market penetration along with Product development would turnout to be
more beneficial for Marriott International Inc. to increase its market share, revenue and
ultimately profits along with achieving competitive edge in the market. Other mentioned
strategise would not be much helpful for Marriott as risk involvement is higher and growth
opportunities are challenging in new markets.
Applying a range of theories, concepts and models, interpret and devise strategic planning for a
given hospitality organisation.
Here onwards, a brief observation of strategic planning in context to Marriott International Inc. is
being mentioned. The theories and concepts in below mentioned theories can be
implemented to create effective strategic plans for the organisation.
Porter's Generic Strategies - Porter gave generic strategies that are used by companies to gain
competitive advantage over its competitors or to establish its business across its chosen
marketplace. Further mentioned is the description with consideration of Marriott Inc.
 Cost Leadership Strategy - It refers to targetting the broad market where the demand is
quite large and offering products at the lowest possible price to the customers. The vast
competition in hospitality industry creates high options for its customers to choose from.
Marriott can win and acquire more customers and market share by offering its services at

lower price than its competitors. Discounts and offers to its business clients would add an
advantage in acquisition of more customers. (Nair, 2019)
 Differentiation Strategy - Differentiation strategy is used by companies wanting to
make its products standout from the competitors. Though, in hospitality sector services
offered are quite similar in the market but Marriott should introduce new services like
cruise accommodation, destination holiday packages to its regular customers, and hassle
free e – services on all of its hotel branches. Thus, it can enhance its services and
facilities from its competitors giving Marriott an advantage in the market.
 Focus Strategy – This is the third strategy which further splits into 2 sub areas – Cost
focus and Differentiation Focus. Here focus is on customers with unique needs and wants
it is basically considered as focusing on niche marketplace. In hospitality, there has been
customers who are specific with their needs and such as business organisations,
universities and college groups etc. Marriott should focus on providing its services to
such niche customers to grow its brand value and market share.(Maté-Sánchez-Val and
Teruel-Gutierrez, 2022)
Bowman's strategy clock
Bowman's strategy clock is a tool used to analyse the competitive position of the
company by designing and implementing the efficient marketing strategy. The 8 factors of
Bowman's strategy are mentioned below in context to Marriott Inc. -
 Low price and Low value added – Marriott Inc. can offer its stay services at lowest
price possible with minimal free services in areas where business is low for Marriott to
attract customers.
 Low price – Keeping the prices lower than its competitors, Marriott can attract more
customer base especially on year end vacation period.
 Differentiation – By keeping their services different or offering more services in single
package than competitors could give Marriott an winning edge in the market.

 Increased price and standard product – For short term gain Marriott can use this
strategy to increase its revenue and profits. It involves increment in price of
products/services without increasing value(features or services) of the product.
 Hybrid – Providing reasonable services at low cost to its customers can give positive
market share to Marriott over its competitors. It is basically refers to providing more
services at the same price that competitors are charging in the market.
 Focus Differentiation – As mentioned prior in the report regarding niche market,
Marriott should specifically focus on its niche customers to fulfil their needs and wants
because such customers are high valued giving higher business to Marriott regularly.
 High price low value – This strategy works in monopoly market where company can rise
its product price against low value offered. So, it seems of no use in highly competitive
market like Marriott.
 Low value / Standard price – Use of this market strategy can lead to loss of market
share as offering low value at higher price can downgrade any business. Marriott being
an International renowned brand should never consider such strategy as its goodwill and
reputation would be at high stake resulting in loss of huge market share.
CONCLUSION
Thus, it has been observed and concluded form the above report that there are several
business strategies that could be fruitful for an organisation if implemented efficiently. Several
strategies like Swot, pestle are briefly used to understand impact of external environment in
addition to Ansoff analysis, been defined above in context to Marriott International Inc. gives
clear picture of efficient business strategies being implemented by the company to achieve
higher growth and market share along with acquisition of sustainable market advantage over its
competitors. Also, the recommendation for the most effective business strategy is also discussed
in relation to Marriott International Inc.

REFERENCES
Books and Journals
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Dogru, Erdogan and Kizildag, 2018. Marriott Starwood merger: what did we learn from a
financial standpoint?. Journal of Hospitality and Tourism Insights.
Ebersberger, Herstad and Nordli, 2021. Hospitality innovation strategies: Robustness analysis of
paths to firm performance. Tourism Management, 85, p.104310.
George, 2021. The Tourism and Hospitality Marketing Environment. In Marketing Tourism and
Hospitality (pp. 183-219). Palgrave Macmillan, Cham.
Kim, Roehl and Lee, 2019. Effect of hotels’ price discounts on performance recovery after a
crisis. International Journal of Hospitality Management, 83, pp.74-82.
Konovalova and et. al., 2018. Forming approaches to strategic management and development of
tourism and hospitality industry in the regions. Journal of Environmental Management
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Li and Singal, 2021. Deal characteristics and M&A performance: How do hospitality firms
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Maté-Sánchez-Val and Teruel-Gutierrez, 2022. Evaluating the effects of hotel location on the
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Nair, 2019. Dynamics of pricing and non-pricing strategies, revenue management performance
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Rossidis, Belias and Vasiliadis, 2021. Strategic Hotel Management in the “Hostile” International
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