SWOT Analysis of Marriott International

Evaluation of Conceptual Frameworks
Used in Strategy Development

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Strategic position of each companies in industry........................................................................1
Assessing the impact of internal factors that governs the strategic direction of both companies.
.....................................................................................................................................................2
Impact of external forces that can affect the strategic position of both the companies..............3
Presenting Porter' Forces analysis on both companies with its challenges.................................5
Finding the reason for successful strategy of one company than other with reason...................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The strategic development is very important for companies operating in the same
industry. On the basis of cited case situation, for this project Airbnb and Marriott International
have been selected. Airbnb Inc. is a recently established rental website, while Marriott
international is traditional luxurious hotel brand. In present report, strategic position of each
company will be discussed. The internal factors that governs strategic direction will be discussed
by using SWOT analysis of each company. This report will also shed light on STEPPLE and the
Porter's five forces analysis in the context of chosen organization.
Strategic position of each companies in industry
Basis of comparison Airbnb. Inc. Marriott international
Company's overview
Airbnb is a private
accommodating rental website
which enables hosts to rent out
their properties or rooms to guests
who uses the website to find a
place to stay.
In 80 years, Marriott
international has built a
reputation for immeasurable
quality, service excellence and
innovation. It is the leading
lodging company in industry.
Market share in industry In 2017, the total number of
bookings through Airbnb.com is
108.1 million approx. There are 10
cities in U.S with highest market
share of Airbnb company.
The company has seen large
growth in both property
numbers and revenue (Belk
2014).After 1957, Marriott has
grown in both property
numbers and revenue as a
result of acquisition of Star
wood hotels and resorts.
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Target market of
company
The users of Airbnb is divided in
two market segmentations. People
that are looking for places and one
who are willing to rent out theirs.
Travellers and hosts are main
target market of Airbnb.
Marriott international, as a
luxury brand designed mainly
on customer who are looking
for quiet and luxurious stay for
their accommodation.
Business strategy The main strategy is the high rate
of satisfaction among those
staying at their listed properties.
Attaining a larger share of market
is the main focus of company.
Connecting more with online
travel agencies and hotels.
Actively utilizing social media.
The main strategy is to provide
their guests with simple
elegant atmosphere to guest
without any distraction and
disruption. The Marriott hotels
uses the 'generic strategy'.
Assessing the impact of internal factors that governs the strategic direction of both companies.
Impact of external factor can be understand by SWOT analysis of both companies.
SWOT analysis Airbnb Marriott international (MI)
Strength One of the biggest strength of Airbnb
is that it’s a well-established brand and
has a good public image. The business
models enables company to compete
with low prices as compared with
hotels and guest houses. Guests and
travellers focuses on rating and review
system, which provides trust and
safety.
MI has a very strong position
in the market with diverse and
expended business in market.
The company has strong
financial position in hospitality
industry. The company
provides wide range of
satisfied products and services
to its customers.
Weakness The lodging industry as competitors
are damaging the company's concepts.
In the context of MI,
management system is weak
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Company mostly based on quality
provided by hosts (Prebensen, Chen
& Uysal, 2018). The company's
reputation can be damaged if hosts
doesn't follows standard guidelines.
The business model can be easily
copied by competitors.
due to huge extended business.
It is focusing on expansion that
it become impossible to
maintain standards of services
throughout with the result that
the brand is becoming weak.
Opportunities With increasing in mobile devices,
Airbnb is facilitating both guests and
hosts to get connected. Airbnb can
exploit those market where hotels
ratios are quite low and are very
expensive.
Company has opportunity to
explore business operations all
over the world through merger
and acquisition especially in
Europe. Marriott should take
steps to grow in market as in
case by improving marketing
plans.
Threats As Airbnb is operating in more than
192 countries, every country has their
own laws and regulations to comply
with. The company has to rely on
hosts and guests to deal with local
laws. Competitors are growing out and
can give Airbnb a tough competition.
The company is facing lots of
competition from various
brands across the world who
are pursuit to become market
leaders. Star rated properties
across the world have risk
from terrorist groups. High rate
of fluctuations is found in
market because of high
competition.
Impact of external forces that can affect the strategic position of both the companies
The STEEPLE analysis on Airbnb and Marriott International:
STEEPLE analysis Airbnb Marriott international
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Socio-Cultural Airbnb is operating in more than 191
countries. Social media plays a main
role to spread voices of both host and
tenants. Airbnb has different websites to
educate and help the community.
Society's culture impacts the
culture of organization.
Marriott international should
understand the demographics
and skill level of population
(Marriott Marketing Mix,
2018) and education level of
the lodging industry.
Technological Airbnb is fully automated company
which helps both hosts and tenants to
connect in a positive manner (Pestle
analysis of Marriott, 2018). By using
technology Airbnb can collect data and
perform environment analysis easily.
Fast speed of technology will
help to give firm little time to
cope and be profitable.
Company should focus on
technology's impact on product
offering, value chain structure
in service sector.
Economic Airbnb is a good example of shared
economy. The company is considered to
be a source of income and provides jobs
to hosts and to more than 3100
employees in organization.
The economic factors such as
inflation, savings and interest
rate, foreign exchange and
economic cycle determine the
demand and investment of
company in an economy.
Environmental Airbnb has home-sharing model which
is suitable choice for hosts and guest as
it helps in reducing waste usage, energy
and unnecessary wastes.
Before entering in a new
market, company should
analyse the environmental
standards that are required to
operate in that market like
laws regulating environment
pollution, waste management,
recycling etc.
Political Airbnb is facing some legal and There are different trade
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regulatory issues in many countries as
every country have their different laws
and regulations. The company also have
to deal with the issue of different tax
rates.
regulation and tariffs related to
services in different countries.
Bureaucracy and interference
of government in lodging
industry, level of corruption in
service sectors.
Legal Airbnb is relying on the hosts and guest
as they can meet local laws and can
follow rules while agreeing to
company's terms and condition while
renting space (Dogru, Erdogan &
Kizildag, 2018). This is why Airbnb is
facing lawsuit in many cities.
Legal factors such as
discrimination of laws,
copyright, patents and
intellectual property laws etc.
are need to be considered.
Ethical Airbnb should maintain the
confidentiality of guests.
The personal information of
guests should be kept secured
by Marriott international.
Presenting Porter' Forces analysis on both companies with its challenges.
The Porter' Forces analysis of Airbnb and Marriott international:
Porter's Forces Airbnb Inc. Marriott International
Threat of new entries
The threat of new entries in
market for Airbnb is weak.
Because company is not only
well funded but has vast
operations in nearly 200
countries. Any new company
to pose a threat will need to
have a strong capital and
excellent brand image.
Through lower pricing
strategy, reducing costs and
providing new value to
customer which is creating
pressure on Marriott
international.
5

Threat of substitutions
There is a threat of substitution
for Airbnb because of high
competition. Customer can
easily switch to other company
who offers the same concept.
Industry profitability suffers
when there are more than a
services available to meet
customer needs in different
ways. Marriott international is
suffering with threat of being
replaced by other competitor’s
brands in market.
Negotiating power of
customer
The threat of negotiating
power of customer for Airbnb
is high as they have a broad
range of services to choose
(Guttentag & et.al., 2018).
Customers wants the best stay
at a low possible price. It gives
pressures on Marriott
International profitability in
long run.
Bargaining power of supplier The bargaining power of
supplier is limited as Airbnb
controls the connection
between two parties. The
suppliers are hosts that offer
rooms and apartments and are
the one that makes business
happen.
Powerful suppliers in service
sector use their negotiating
power to extract higher prices
from firm in lodging field,
higher negotiating power will
lower the profitability.
Inter-firm rivalry There are various new
websites which are working to
overthrow Airbnb. The one
main competitors is
Onefinestay.com that operates
as an upmarket Airbnb
services.
Marriott international operates
in very competitive lodging
industry. This competition
affect overall long term
profitability of the
organization.
6

Finding the reason for successful strategy of one company than other with reason
It’s important to have a strong entrepreneurial strategies for crucial growth of the
company in lodging industry. While Airbnb is depended on hosts who offers houses on rent and
can affect the marketing position of company. Whereas, Marriott international being a luxurious
brand hotels focuses on giving splendid experience to guests in their accommodation. Marriott
international has successfully employed the business level generic strategy. It gives various
competitive advantages at the disposal of the company. This advantage includes cost, uniqueness
and their competitive extent. Its strategy of differentiation helps in creating various hotel brands.
Market segmentation strategy used by hotels is a proper approach in creating a wide range of
consumer. These strategies helps Marriott international to stay the topper in lodging industry
from past 70 years.
CONCLUSION
By summing up the above report, it be concluded that strategic development is essential
to operates in competitive lodging industry. The report summed up the impact of internal factors
on strategic with the help of SWOT analysis. A STEEPLE analysis has been done to understand
external factor impact on strategic decisions. The challenges faced by both the companies is
concluded by Porter's forces analysis. Further, reasons behind Marriott international business
strategies being more successful than Airbnb.Inc are been discussed.
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REFERENCES
Books and Journals
Belk, R., (2014). You are what you can access: Sharing and collaborative consumption
online. Journal of business research. 67(8). pp.1595-1600.
Dogru, T., Erdogan, A. & Kizildag, M. (2018). Marriott Starwood merger: what did we learn
from a financial standpoint?. Journal of Hospitality and Tourism Insights. 1(2). pp.121-136.
Guttentag, D & et.al., (2018). Why tourists choose Airbnb: a motivation-based segmentation
study. Journal of Travel Research. 57(3). pp.342-359.
Prebensen, N. K., Chen, J. S. & Uysal, M. eds. (2018). Creating experience value in tourism.
Cabi.
Online
Pestle analysis of Marriott .2018. [Online] Available Through:
<http://pestleanalysis.com/pestle-analysis-of-marriott/>
Marriott Marketing Mix .2018. [Online] Available Through:
<https://www.mbaskool.com/marketing-mix/services/17317-marriott.html>
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