Environmental Analysis of JW Marriot Hotel in Australia

This report conducts an environmental analysis of JW Marriot hotel in Australia, including PEST analysis, SWOT analysis, and Porter's Five Forces analysis. Strategic recommendations based on the analysis are provided.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author Note

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Executive summary
The purpose of this report is to conduct an environmental analysis of one of the most renowned
hotel chain of Australia, the JW Marriot hotel. In order to conduct the macro analysis, PEST
analysis as well as SWOT analysis of the mentioned organization will be conducted. For micro
analysis, porter’s five forces analysis will be conducted. Along with this, strategic
recommendation on the basis of the environmental analysis of the hotels will also be provided in
this report.

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Table of Contents
Introduction......................................................................................................................................4
Discussion........................................................................................................................................4
Macro analysis.............................................................................................................................4
PEST analysis...........................................................................................................................4
SWOT Analysis........................................................................................................................5
Micro analysis..............................................................................................................................6
Porter’s Five Forces..................................................................................................................6
Recommendation and conclusion....................................................................................................7
Reference List..................................................................................................................................9

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Introduction
The hospitality industry refers to a broad category of fields within the service industry
that is comprised of lodging, event planning, transportation, cruise line as well as others that falls
in the tourism industry. The mentioned industry completely depends on the availability of the
leisure time as well as disposable income. A hospitality unit like hotel, restaurant as well as
amusement park is comprised of multiple groups like direct operations as well as multiple
maintenance (Patiar, 2016). When it comes to Australia, the nation is known for its hospitality
and friendly gesture towards tourists. In this report, environmental analysis of one of the well
known hotel chain that is operating in the nation, the JW Marriott has been performed. Two
major theoretical modes namely, the PEST analysis as well as the SWOT analysis will be
conducted in order to understand the external environment of the nation. In order to understand
the internal environment, Porters Five Forces analysis will be performed. Finally, on the basis of
the analysis, strategic recommendation will be provided for the mentioned hotel chain.
Discussion
Macro analysis
Considering the fact that the hospitality industry is a highly crucial part of the nations,
economy, the government of Australia supports establishment of hotels in the mentioned
industry in order to ensure increment in the yearly revenue. As a result of this, a huge
competition is there among popular hotel chains established in Australia. There, in order to
create effective strategy for gaining competitive advantage in the highly saturated industry, it is
highly crucial for the Management of JW Marriott to conduct external environment analysis. In

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the following paragraph, PEST analysis of the hospitality industry of Australia has been
conducted (Hardy, 2018).
PEST analysis
Political Factor
The political stability of the nation encourages the establishment of Hotels in the nation.
The government charges a good amount of tax on both the luxury as well as star category of the
hotels. The government of Australia possesses good trading relation with the neighbor countries.
This imposes positive impact on the mentioned industry sine effective deals results in increased
business opportunities for the hotel chains.
Economic Factor
According to a survey conducted in the year 2018, Australia is considered to be the 13t
largest economy of the world. The economy grew by 2.4 percent in the year 2017 that was
bellow expectation. However, researchers are expecting a growth of at least 4 percent by the end
of 2020 (Goh, Nguyen & Law, 2017). Currently, a sharp growth has been recognized in the
economy which is definitely imposing positive impact on the nation. The economic stability of
the country attracts more and more international hotel chains towards the organization which is
beneficial for the mentioned industry (Park & Allen, 2018). However, considering the fact that
Australia is suffering from aging population, the labor market of the nation is getting diminished.
The cost of labor has got increased which in turn is imposing adverse impact on the hotel
industry of Australia.
Social Factor

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Being a developed country, the residents of Australia are pretty affluent. The middle class
as well as the higher middle class consumers possess the capacity to invest on luxuries hotels and
thus can be considered as a a good news for the hotel industry. Not only has this, being a highly
attractive tourist destination, the nation also attracted a good number of tourists with high
disposable income (Brien, Thomas & Brown, 2017). The lack of racism as well as friendly
nature of the residents further encourages tourism in Australia. Majority of the international
consumers prefers lodging and the mentioned industry has taken a shift for this in the recent
world. The rise of Air BnB can be considered as a major threat to the mentioned industry.
Technological Factor
Australia is highly advanced in technology. The technological advancement of the nation
makes it possible for the hotels to provide 24 hours availability of electricity and transportation
to both the local as well as international consumers. The technological advancement also makes
to possible for the nation to provide their consumers with superior quality services which in turn
enhances the consumer base of the hospitality industry each and every year.
SWOT Analysis
Considering the fact that high competition exists in the mentioned industry, it is highly
crucial for the management of JW Marriott to develop strategic plan for gaining competitive
advantage. For this, the company needs to understand its strengths, weaknesses, opportunities as
well as threats. In the following paragraph, SWOT analysis of the mentioned industry has been
conducted.
Strengths
 The strict adherence to the operational
Weaknesses
 The excessive focus on expansion is

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norms can be considered as one of the
biggest strengths of the hotel chain.
Their code of conduct has been custom
designed by the top management and
every employee is expected to follow it
to the final detail.
 The brand equity as well as the
worldwide presence of the mentioned
organization can be considered another
major strength of the same (McPhail et
al. 2015).
 The management of the hotel chain
focus ion innovative techniques to
attract thee consumers are create a
competitive advantage.
increasingly making it difficult for the
organization to maintain their excellent
standard of service.
 The controversies like blockage of
personal wifi of the consumers are
imposing negative impact on the
business (Wirahardja, Turner&
Richardson, 2016).
Opportunities
 The high technological advancement of
the nation makes it easier for the
organization to maintain its superior
quality service.
 Increment of global travel as well as
Threats
 The increasing competition in the
Australian hospitality industry
 The growing emergence of the Air
BnBs

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increment in the number of tourist in
Australia can be considered as another
opportunity for the organization.
 Vulnerability of terrorist attacks (Knox,
2016).
Micro analysis
Apart from understanding the external environment, it is also crucial for JW Marriot to
understand the internal environment of the organization
Porter’s Five Forces
Forces Analysis
Threat of New Entrants  The threat of new entrance is moderate
in the mentioned industry.
 The huge number of tourist and the
popularity of the nation as a tourist
destination attract new entrances
(Sonnenschein, Barker & Hibbins,
2017).
 However, the high investment cost as
well as the requirement of the large
initial capital can be considered as a
strong deterrent for the new entrances.

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Power of the buyers  The power of the buyer is moderate in
the mentioned industry.
 The superior quality of the service
provided by the mentioned organization
is quite hard to imitate for the
competitors
 However, a good number of luxuries
five star hotels are present in the
mentioned industry which in turn
enhances the opportunity of the
consumers to their loyalty form one
hotel to another( Wang & Chung,
2015).
Power of the suppliers  Due to the presence of a good number
of suppliers in the mentioned industry,
the power of supplier is moderate.
 The high labor cost provides the
opportunity for the suppliers to bargain
(Sonnenschein, Barker & Hibbins,
2017).
 Moreover the hotel managers
completely depend on the suppliers for
the technology and advanced system

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that helps the same to mage and locate
prospective properties.
Threat of the substitutes  The power of the substitute is low.
 A good number of middle class
consumers prefer Air BnB instead of
hotels.
 However, the availability of the
benefits like restaurants and pas are
better provided in hotels and hence the
treat is yet of no match for an entity
with a strong brand equity that provides
customer satisfaction
Revelry amongst competitors  Revelry among competitors is high.
 Due to low barrier to the entrance, a
good number well established
international hotels have expanded their
business in Australia (Wang & Chung,
2015).
 Apart from this the local hotels also
adapting innovative ways for attract
consumers in order to gain competitive
advantage
Recommendation and conclusion
From the above discussion it can be clearly understood that JW Marriot has the potential to
become the most popular hotel chain in Australia. Considering the fact that some major issues

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have been detected, in the following paragraphs, recommendation to eradicate the issues has
been discussed.
1. The first step that needs to be taken by the mentioned hotel chain is to introduce
innovative methods for enhancing the competitive advantage in the highly competitive
hotel industry of Australia. Considering the fact that the mission of the JW Marriot hotel
chain is to become the premier provider as well as facilitator of the leisure and vacation
experience across the world, the management can incorporate introduce strategies like
capturing and analyzing the feedback of the guests, regularly track as well as measure the
performance as well as tie staff incentives to guest satisfaction.
2. Considering the fact that the organization has recently dealt with a good number of
negative publicity, the consumer base and loyalty of the same is getting affected. In order
to deal with the issue, JW Marriot should establish an effective communication with the
target consumers both online as well as offline. For this usage of social media sites will
be an effective way since majority of both international as well as local consumers are
present there. Enhanced direct communication will help the management of the hotel to
develop effective consumer-management bonding which in turn will definitely enhance
their overall revenue in the following years.

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Reference List
Brien, A., Thomas, N. J., & Brown, E. A. (2017). How hotel employee job-identity impacts the
hotel industry: The uncomfortable truth. Journal of Hospitality and Tourism
Management, 31, 235-243.
Goh, E., Nguyen, S., & Law, R. (2017). Marketing private hotel management schools in
Australia. Asia Pacific Journal of Marketing and Logistics, 29(4), 880-889.
Hardy, A. (2018). Tourism boom and hotel investment lauded by industry, but some fear
Tasmania's natural charm under threat: Interview with Natalie Whiting.
Knox, A. (2016). The temporary agency work industry and its regulatory environment: Evidence
from Australia. In Temporary Agency Work and Globalisation (pp. 117-148). Routledge.
McPhail, R., Patiar, A., Herington, C., Creed, P., & Davidson, M. (2015). Development and
initial validation of a hospitality employees’ job satisfaction index: Evidence from
Australia. International Journal of Contemporary Hospitality Management, 27(8), 1814-
1838.
Park, S. Y., & Allen, J. P. (2018, July). THE HOTEL INDUSTRY VS. ONLINE TRAVEL
AGENCIES: FOREVER FOE?. In 2018 Global Marketing Conference at Tokyo, 837-
842.
Patiar, A. (2016). Costs allocation practices: Evidence of hotels in Australia. Journal of
Hospitality and Tourism Management, 26, 1-8.

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Sonnenschein, K., Barker, M., & Hibbins, R. (2017). Chinese international students' perceptions
of and reflections on graduate attributes needed in entry-level positions in the Chinese
hotel industry. Journal of Hospitality and Tourism Management, 30, 39-46.
Wang, Y. C., & Chung, Y. (2015). Hotel brand portfolio strategy. International Journal of
Contemporary Hospitality Management, 27(4), 561-584.
Wirahardja, F., Turner, G., & Richardson, S. (2016). Who will stay in the hospitality industry?:
A blue mountains international hotel management school case study. CAUTHE 2016: The
Changing Landscape of Tourism and Hospitality: The Impact of Emerging Markets and
Emerging Destinations, 632.