Strategic Analysis of Marriott International: Assessing Market Position and Competitive Advantage

In this document we will discuss about Strategic Analysis of Marriott International and below are the summary points of this document:- Introduction to strategic analysis of Marriott International, the largest hotel chain in the world. Use of PESTLE analysis to assess external factors affecting the organization's performance. Findings include the impact of political regulations and the influence of the strong US economy on Marriott's market position.

Hospitality

Marriott International 1
Contents
Introduction................................................................................................................................2
Findings......................................................................................................................................2
PESTLE Analysis...................................................................................................................2
Porters Five Forces.................................................................................................................4
Recommendation........................................................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

Marriott International 2
Introduction
Strategic Analysis is a process that analyse the business organisation environment in which it
operates. It is essential for the organisation to formulate strategic planning for smooth
working in order to grab the high market share and gain competitive advantage. The main
aim of this report is to explore the organisation to evaluate its position in the market. Hotel
Marriott International has been taken into consideration to evaluate its position in the market.
Marriott International is American Multinational diversified Hospitality Company that
manage and franchise a brand portfolio of Hotels. It is the largest hotel chain in the world
with the 6500 properties in 127 countries.
In this report, two theoretical models will be used to analyse the market environment of the
hotel such as Porter’s Five Forces Framework and Pestle analysis. At the end of the report,
recommendation will also be mentioned.
Findings
Strategic tools are used by the organisation to determine the position and the factors which
affects growth of the company.
PESTLE Analysis
This a strategic tool which is used to analyse the external factors such as Political, economic,
environmental, social, technology, legal and environmental. These factors affect the activities
of the organisation and its performance. The position of the hotel analyse by these tools are as
follows:
Political

Marriott International 3
This factor includes the government related point such as rules and regulation and the others.
Marriott International is established in US but it operates in 127 countries due to which it
faces the issue of different rules and regulation. According to Ricca (2018), the meeting and
events of government is organised in US hotels. It is considered as the main property for the
political party because the meetings and rallies are organised in hotel. It is a gathering place
for government that is why; they support the industry to grow in the country. There are many
rules and regulation related to hotel that is compulsory to follow them to survive in the
market.
Economic
United States is the world’s largest economy in the terms of GDP. It is also has the world
largest economy by nominal GDP and the second largest by purchasing power parity. The
market size of hotel industry was cover with the amount of 570 billion US. According to the
facts, it is observed that the Marriott International contribute the high amount of 22.3 billion
in US dollars. The strong economy states that the high power of consumer to consume the
facilities of hotels. The industry also rapidly grows in the market as the consumer has high
income. Exchange rate is an issue which is faced by the hotels and restaurants of US because
high exchange rate discourages the tourist to visit the US destination (Statista, 2018).
Social
US is a large country with a diverse social culture. As per the research, it has been seen that
all of people are considered equal in context of gender, race, sexuality and class. This type of
culture encourages the tourist to visit the place and stay for long time. Marriott hotel also
follow the different culture to attract the different type of consumer. Tourist feels comfortable
in the different countries just because of hotel industry. It is a positive factor for the hotel
because it increases the demand of consumer the facility.

Marriott International 4
Technological
United States is come into being around the age of enlightenment. Hotels used the technology
to enhance their services to attract the large number of customer such as online bookings,
smart solutions, and many others. It has been seen that the government of US invest the high
amount in educational department which enhance the technology in the country.
Legal
As the Marriott international is operated in different places that is why; it have the
responsibility to follow the rules and regulation as per the government (US Legal, 2018). The
main headquarter of the hotel is in US and the analysis is also done in the US market. It is
necessary for the hotel to follow the rules and regulation of US government such as consumer
rights, entertainment law, and homeowner’s association laws (United States Senate, 2018).
Environmental
The clean air act is the main act of environmental which is developed by US government to
enhance the services of hotel and restaurant chain. It is the main act which is essential to
follow by the hotels so that the environment will be safe and secure. Air Toxic is also an act
which is controlled by technology based standard that are set for various industrial categories.
These environmental laws and policies are necessary to follow to survive for long time in the
market (Environ.andrew, 2018).
Porters Five Forces

Marriott International 5
(Source: Mind Tools, 2018)
The threat of new entrants
The threat of new entrants is low as there is less capital required to enter the market. It has
been seen that there are many hotels and restaurants that have high brand value in the market
such as Hyatt, IHG and many others. It is difficult for the new entrants to compete with the
exiting hotel chain but with the differentiate product they can easily enter the market
(Bertozzi, Ali, & Gul, 2017).
Bargaining power of buyers
Bargaining power of buyers is high as there are many hotels and restaurants chain operated in
the market. It has been seen that people live with the different background which has
different taste as well. It is observed that the hotels and restaurant are those places in which
buyers consume the services as per their taste and preferences. There many companies enter
the market that is why; consumers have many options to consume the services.

Marriott International 6
Bargaining power of suppliers
Bargaining power of suppliers is low due to large number of competition in the market. The
ingredients provide by the suppliers are easily available in the market that is why; the large
number of suppliers enter the market. It is a fact that there are many suppliers in the market
due to which the switching cost of hotels and restaurants is getting low (Della Corte, 2016).
The threat of competitors
Large number of hotels and restaurants operated in the same industry of hospitality. There are
many restaurants and hotel that have high brand image in the market such as Hyatt,
Wyndham, and IHG. These are hotels that have close competition in the market as per their
demands of their customer. It is a fact that the Marriott have high competition with the name
of IHG hotel because its market share is high. It is also observed that the IHG have large
number of employees due to which their capacity of supplying is high (Owler, 2018).
The threat of substitute
It has been evaluated that the threat of substitute product is high because taste of consumer is
different with their tradition. It has been evaluated that the health conscious consumer does
not prefer to use the services of hotels and restaurant. They would like to eat the food at home
as per their taste and take the rest in their own places.
Recommendation
As per the above discussion, it has been recommended that the hotel have to adopt the
competitive strategy such as porter’s generic strategy.
Differentiation strategy

Marriott International 7
It has been analysed that the competitors of hospitality industry provide the similar type of
services to consumers (Köseoglu, Ross, & Okumus, 2016). It has been recommended that the
hotels have to adopt the differentiation strategy so that it can provide the different services
and attract the large number of customer. The hotel can provide the new machine technology
such as coffee machines in rooms, high technology of bathrooms and many others.
Cost leadership strategy
The hotel has to adopt the cost leadership strategy so that it can attract the large number of
consumers in the market. There are many competitors in the market those provide the similar
services at the same cost that is why; it is essential for Marriott hotel to adopt the cost
leadership strategy (Bell, Dyck, & Neubert, 2017).
Focus strategy
Focus strategy states that the hotels have to focus on the exiting services so that it can provide
the services with the different way. Differentiation and cost leadership are the strategy which
helps to attain the customer. Promotion technique is also a technique that can be adopt by the
hotel so that it can grab the market with the high share price.
Conclusion
According to above discussion, it has been concluded that the Marriott hotel have the high
opportunity to survive in the market for long time. It is also observed that the hotel have
many branches in different countries that is why it faces the political and legal issues. The
threat of competitors and substitute product are also the issues that affect the growth of hotels
and restaurants. It has been recommended that the hotels have to adopt the porter’s generic
strategy so that it can achieve the success in the market.

Marriott International 8
References
Bertozzi, F., Ali, C. M., & Gul, F. A. (2017). Porter’s Five Generic Strategies; A Case Study
from the Hospitality Industry. International Journal For Research In Mechanical & Civil
Engineering (ISSN: 2208-2727), 3(2), 09-23.
Della Corte, V. (2016). The strategic environment of hotel chains. In The Routledge
Handbook of Hotel Chain Management (pp. 83-94). Routledge.
Environ.andrew. (2018). Main US Environmental Laws. Retrieved from:
http://environ.andrew.cmu.edu/m3/s7/us_laws.shtml
Köseoglu, M. A., Ross, G., & Okumus, F. (2016). Competitive intelligence practices in
hotels. International Journal of Hospitality Management, 53, 161-172.
Bell, G. G., Dyck, B., & Neubert, M. J. (2017). Ethical Leadership, Virtue Theory, And
Generic Strategies. Radical Thoughts on Ethical Leadership, 113.
Mind Tools. (2018). Porter's Five Forces. Retrieved from:
https://www.mindtools.com/pages/article/newTMC_08.htm
Owler. (2018). Marriott's Competitors, Revenue, Number of Employees, Funding and
Acquisitions. Retrieved from: https://www.owler.com/company/marriott
Ricca, S. (2018). The role of hotels as political backdrops. Retrieved from:
http://www.hotelnewsnow.com/Articles/288924/The-role-of-hotels-as-political-backdrops
Statista. (2018). Hotel industry - Statistics & Facts. Retrieved from:
https://www.statista.com/topics/1102/hotels/
United States Senate. (2018). Laws and Regulations. Retrieved from:
https://www.senate.gov/reference/reference_index_subjects/Laws_and_Regulations_vrd.htm

Marriott International 9
US Legal. (2018). Hotels and Motels Law and Legal Definition. Retrieved from:
https://definitions.uslegal.com/h/hotels-and-motels/