Unit 41 - Hospitality Business Strategy

Hospitality Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
P1 Using different frameworks examine the impact of macro environment..........................3
P2 Evaluate internal environment and capabilities of enterprises..........................................4
P3 Use Porter Five force model in relevance with organisation............................................7
PART 2............................................................................................................................................8
P4 Apply concept/ frameworks for strategic planning in relevance with organisation..........8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
REFERENCES..............................................................................................................................11
BOOKS & JOURNAL.........................................................................................................11

INTRODUCTION
A business strategy is described as a process in which integration of taking effective
decision and actions by organisation for achieving goal in order to achieve competitive position
at marketplace. It describes what required to be done for achieving goal and objective, which
also assists manager to take effective decision in relation to recruiting as well as assigning
resources. This report is carried upon Marriott. It is the American international diversified
hospitality organisation which provides wide variety of services to its customer in order to satisfy
them. This company was founded by Bill Marriott in the year of 1927. In this report, the
PESTEL is used for assessing external environment which enforces direct influence on
performance of organisation. In addition to this, VRIO and SWOT are adopted for identifying
internal capabilities of firm. And Porter five force models is used for achieving competitive
advantage over rival firm in the market. At last, Ansoff is adopted for strategic direction for
future growth of organisation in an effective manner (Ahmad, Bakar and Ahmad, 2018). A
business strategy provides direction to organisation for performing different activities and
functions in an appropriate way.
Overview of company: Marriott is the American international diversified hospitality
organisation which provides wide variety of services to its customer in order to satisfy them.
This company was founded by Bill Marriott in the year of 1927.
Vision: The vision of Marriott is to expand their business across world.
Mission: The mission of organisation is to offer superior quality services to its customer in
order to satisfy them. It increases profit and sales in future period of time.
Objective: The organisation focuses on increasing sales by 20% in upcoming 6 months.
PART 1
P1 Using different frameworks examine the impact of macro environment
It is necessary to build effective strategy for increasing success and growth of business
organisation in future period of time. In addition to this, PESTEL Analysis is adopted for
assessing external environment which imposes direct impact on productivity as well as
profitability of business organisation that is mentioned below:
PESTEL Analysis

Political factor: Political factor involves government regulation, terrorism, laws and
many more. Due to increase in terrorist attack as well as military grievances that interrupt air
travel internationally this imposes negative impact on success and growth of organisation. On the
other hand, due to follow government regulation by Marriott hotel, they do not need to change in
any policies which are beneficial for company in future period of time (Prud’homme and
Raymond, 2016).
Economical Factor: It includes interest rate, interest rate, inflation rate as well as deflation
rate and so on. Due to slowing down the economic growth in china and economic turmoil occurs
in Europe. This imposes negative impact on stock market and decreases income of individual
person. On the other hand, the organisation provides high quality services to its customer that
increases sales and profit in future period of time (Alegre and Berbegal-Mirabent, 2016).
Social Factor: It involves age, lifestyle, and fashion as well as market trends which
enforces direct impact in growth of company. Due to change in need of customer, Marriott
focuses on satisfying their changing requirements that increases experience level of customer at
marketplace. Whereas, sometime the change in need of customer very frequently, so it is not
possible for organisation to change policies as per their need so it decreases sales and erode
profit.
Technological Factor: Technology plays an important role in success and growth of
business in hospitality sector. It is necessary to implement advanced technology for providing
innovative services to its customer and replacing it’s by traditional services in an effective
manner. And, the execution of latest technology is very costly; it adds extra cost to the services
provided by company imposes adverse impact on performance level of company.
Environmental Factor: It involves climatic and weather condition which enforces both
favourable and adverse impact on growth of organisation. Due to increase in fuel prices, it
enhances the cost of travel, thus it reduces demand for staying in hotel which decrease profit of
Marriott in hospitality sector. On the other hand, they provide eco- friendly services to its
customer which increase standard of living of people of society.
Legal Factor: Legal factor involves consumer protection law, legislation and many
more. Due to increase in labour cost, it adds addition cost to the services provided by firm which
erodes sales as well as profitability level in future period of time. And, due to follow legal

structure by Marriott, it increases brand value and reputation of company in front of customer at
marketplace. Therefore, it boosts sales and profit in future period of time.
Therefore, it has been analysed that, it is necessary to consider macro environmental
factor in order to increase sales in future period of time. And it also helps Marriott in increasing
experience level of customer in upcoming time period which is beneficial for hotel within
hospitality sector.
P2 Evaluate internal environment and capabilities of enterprises
SWOT Analysis is the framework which is used for assessing internal environment in
order to track situations and trends occurs in the market. It determines strength, opportunities,
weaknesses as well as threat which are going to be mentioned below:
SWOT Analysis
STRENGTH WEAKNESS
 Marriott is the international
organisation which expands their
business at global level which increases
brand image and reputation of hotel in
front of customer at marketplace.
 In context of Marriott, they provide
innovative services to its customer who
increases sales and profit in upcoming
period of time (Boella and Goss-
Turner, 2019).
 Due to increase in competition level, it
decreases profit of firm can be
considered as weakness for firm.
 In reference of Marriott, they depend
too much on North American market
which decreases sales of company in
future of time.
OPPORTUNITIES THREAT
 The major advantage for Marriott is to
expanding multinational travel which
gives them more and more revenue.
 Furthermore, due to enhance Alibaba
partnership which helps Marriott in
boosting their business in Chinese
market.
 Due to slowing down the economic
growth in US can be determined as a
major threat in order to erode
profitability level at marketplace.
 Moreover, in order to increasing level
of competition from new entrants, it
imposes adverse effect on growth of

company.
SWOT Analysis aid assistance to organisation in order to offer comprehensive
information, fashion, changes as well as trends at marketplace. This framework assists in
assessing level of performance at wider level.
Furthermore, VRIO is used for assessing opportunities as well as resources used by
organisation in an effective manner. In addition to this, VRIO provides comprehensive image
which helps in taking effective decision for success and growth of company in hospitality sector
that is going to be mentioned below:
Valuable: These are resources which provide value to its customer for increasing success
and growth of business organisation. It signifies, it is necessary to make effective use of
resources in order to maximize profit (Cheo and Cheon, 2016).Therefore, it is important to pay
attention to those valuable resources which helps in increasing experience level of customer at
marketplace. And also, these valuable resources aid assistance in accomplishing goal as well as
objective in stipulated period of time
Rare: Rare includes those resources which is unique and specific for business
organisation. The rare resources are those which are not copied by its competitive firm in easy
manner. It helps in expanding business across the world within hospitality sector. In context of
Marriott, they emphasised on their luxurious accommodation services which is provided to its
customer in order to gain competitive advantage over rival firm at marketplace. It also helps in
achieving leading position across the world.
Inimitable: It signifies those resources which is not imitable by is competitive firm. In
reference of Marriott, the competent staffs provide effective services to its customer as per their
needs which are not imitable by its competitive firm as considered as a unique for organisation.
They provide effective training session to its employees in order to increase their knowledge
regarding services provided by organisation. And also their supply chain network is also not
copied by another firm which will be beneficial for taking effective decision in future period of
time.
Organised: It is necessary for Marriott to perform different activities and functions in
better way. In addition to this, the firm focuses on adopting various structures, procedure in an
effective manner for executing business functions in an appropriate way. In reference of

Marriott, their staffs maintain good relation with its user in order to retain them for a longer
period of time. Their main focus is to make positive relationship with its user for increasing
brand value and reputation of company in front of customer at marketplace. And also, it helps in
enhancing experience level of customer for maximizing profit and sales in upcoming period of
time.
From the above mentioned micro environmental factor such as SWOT and VRIO is adopted
by Marriott for assessing market trends, fashion at marketplace. Therefore, it has been stated
that, it is necessary to consider internal environmental factor which imposes direct influences on
success and growth of organisation. In addition to this, Marriott adopts both tools VRIO and
SWOT for assessing their growth across the world (D’Annunzio-Green, 2018).
P3 Use Porter Five force model in relevance with organisation
Porter five force models are used by Marriott for achieving competitive advantage over
rival firm at marketplace. It also adopted to assess the competition level which is confronted by
company within hospitality sector and it imposes direct impact on growth and development of
organisation. Therefore, the porter five force model in relation to Marriott which is going to be
mentioned below:
Buyer power: The buyer’s power is moderate in hospitality sector. In context of Marriott,
they achieve strong brand position in the market that helps in attracting large number of
customer at marketplace. They provide innovative services to its buyer as per their needs, thus it
aid assistance in increasing brand value and reputation of company in front of customer at
marketplace. In helps them in increasing competitive advantage over rival firm at marketplace.
In addition to this, they focus on adopting innovative styles in order to provide superior quality
facilities like spas, gym, bar facilities in order to attract ample of customer in the market. Thus, it
has been stated that it is not easy for firm to take entry in hospitality sector. Thus, the main
purpose of Marriott is to retain customer for longer period of time (Han, Lee and Kim, 2018).
Supplier’s power: The power of supplier is moderate which depends upon different
situations and circumstances. Therefore, the Marriott focuses on implementing advanced
technology for retaining customer for longer period of time. They offer innovative facilities to its
customer such gym, spa as well as bar facilities as per their requirements so that customer do not
switch for additional services provided by its competitive firm. And also, it increases sales as
well as profitability level in future period of time in order to increase experience level of

customer at marketplace. Their main purpose is to satisfy customer by their effective services
provided during the period of time for achieving goal and objective in stipulated period of time.
In addition to this, it also aid assistance in gaining competitive advantage over rival firm at
marketplace (Hua, 2016)
Threat of New Entrants: Due to increase in growth of hotel industry, there are various
firms who take entrance in this sector. There are various opportunities in this industry related to
tourism as well as travel which attract firm to take entrance in this hospitality sector. In addition
to this, there are numerous economic downturns taken place in this sector but still it is continued
growing during the period of time. Therefore, it has been stated that, due to launch their business
in hospitality sector, it is vital for organisation to have large amount of capital in order to operate
activities and functions of organisation in an effective manner. Therefore, the threat of new
entrants is low in hospitality sector. For executing their operations in this industry, the new
entrance need large amount of fund for increasing success as well as growth of company in
future period of time. The Marriott run their business at global level which is the strength for
organisation.
Threat of Substitutes: There are various competitive firms such as Hyatt, Accor hotels as
well as Wyndham and many more who provide similar services to its customer. Therefore, it
increases possibility of switching by customer for services of its competitive firm. But, the
Marriott operate their business at global level so there is the less chances of switching their
services by consumers. They offer high quality services at affordable cost in order to gain
competitive advantage over rival firm at marketplace.
Competitive rivalry: The threat of competitive rivalry is moderate in hospitality sector
due to need of high finance. There are various companies in this industry that is considered as
large branded chain of hospitality industry. Therefore, the organisation focuses on providing
services as per their need and wants in order to gain competitive advantage over rival firm at
marketplace.
From the above mentioned strategies, it has been analysed that Marriott adopt competitive
strategy. And they focus on providing innovative services to its customer in order to gain
competitive benefits over rival firm at marketplace (Hwang and Lee, 2019).

PART 2
P4 Apply concept/ frameworks for strategic planning in relevance with organisation
Strategic management plan
It is described as a process which is used for communicating suitably for accomplishing
goal and objective in targeted period of time. In context of Marriott, they adopt diversification
strategy in order to provide innovative services in new market for gaining competitive advantage
over rival firm at marketplace (Martínez-Pérez, García-Villaverde and Elche, 2016).
Vision: The vision of Marriott is to expand their business across world.
Mission: The mission of organisation is to offer superior quality services to its customer
in order to satisfy them. It increases profit and sales in future period of time.
Objective: The organisation focuses on increasing sales by 20% in upcoming 6 months.
Strategies: Marriott adopts differentiation strategy in order to provide innovative
services in new market for gaining competitive benefits at marketplace.
Implementation: It is important for organisation to implement plan in an effective
manner. Therefore, the main purpose of Marriott is to execute their plan for increasing sales and
profit in future period of time.
Evaluation: Herein, it is vital for Marriott to assess actual performance with desired one
in order to take appropriate decision which will be beneficial for success and growth in future
period of time. They make comparison between desired as well as actual performance for
implementing plan in better way (Oskam, Dekker and Wiegerink, 2017).
Porter generic strategy
Porter generic strategy signifies how an organisation pursues competitive edge around its
selected market scope. There are different generic strategies such as low cost, differentiation and
focus that is given below:
Cost Leadership strategy: Herein, the Marriott international focuses on offering cost
effective products and services to its user at marketplace. They provide goods and services at
relatively low cost for achieving competitive edge over rivalries at marketplace.
Differentiation strategy: This strategy is used by Marriott for providing unique services
to its customer that helps them in increasing experience level of customer in future period of
time.

Focus cost Leadership / Differentiation: Herein, the company focuses on providing
differentiation services at relatively less price as per the need or wants of its user at marketplace.

Ansoff Matrix
Ansoff matrix is considered as a planning tool that offer a framework which assists
management team devise tactics for future growth of business organisation. There are four
quadrants in this matrix that is given beneath:
Market Penetration: In this level, the business organisation focuses on selling existing
product in existing market. Herein, the Marriott hotel focuses on providing food,
accommodation, bars facilities, gym to its customer. They offer their services in innovative
manner for increasing profit and sales in future period of time. In addition to this, their main
purpose is to make good relationship with its customer by fulfilling their need and wants in an
effective manner (Kallmuenzer, 2018).
Market development: In this level, the organisation focuses on providing existing products
in new market. For this purpose, they adopt various promotional techniques such as
advertisement, publicity as well as sponsorship in order to introduce their available products in
innovative market. They want to expand their business at global level for boosting profit in
future period of time.
Product development: Herein, the organisation sells their innovative product in existing
market. Therefore, for this purpose, Marriott focuses on providing innovative services such as
gym, spa as well as bar facilities to its user in order to satisfy them. It increases sales as well as
profitability level in future period of time.
Diversification: In this stage, the innovative product is sold in new market for attracting
large number of customer towards products and services which is provided by firm. Therefore, it
has been stated that it is risky stage but also provide higher return. It increases sales as well as
profitability level in future period of time. They adopt promotional techniques such as
advertising, publicity as well sales promotion in order to promote their innovative product in new
market. And it helps them in boosting profit and sales in future period of time. And it assists in
achieving competitive advantage over rival firm at marketplace.
From the above mentioned topics, it has been analysed that, the company adopt
diversification strategy in order to offer innovative services in new market.

CONCLUSION
From the above discussed report, it has been analysed that it is necessary to make effective
strategy for success and growth of organisation. In addition to this, the organisation focuses on
assessing strategies which is adopted by its rival firm in order to gain competitive advantage over
rival firm at marketplace. Apart from this, PESTLE Analysis is adopted by Marriott in order to
overcome from external forces occurs in the dynamic environment. Beside from this, it is vital to
assess micro environmental factor for running their business in smooth manner. Therefore,
SWOT and VRIO are used for assessing internal environment which enforces direct impact on
profitability of firm. And Ansoff matrix is adopted to signify competitive benefits gain by entity
while assessing matrix growth. At last, it is vital to maintain strategic management plan for
making effective use of resources for increasing growth in future period of time.

REFERENCES
BOOKS & JOURNAL
Ahmad, S.Z., Bakar, A.R.A. and Ahmad, N., 2018. An evaluation of teaching methods of
entrepreneurship in hospitality and tourism programs. The International Journal of Management
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Alegre, I. and Berbegal-Mirabent, J., 2016. Social innovation success factors: hospitality and
tourism social enterprises. International Journal of Contemporary Hospitality Management.
Boella, M.J. and Goss-Turner, S., 2019. Human resource management in the hospitality
industry: A guide to best practice. Routledge.
Cheon, G. and Cheon, Y., 2016. A Study of the Relationships among Hospitality, Corporate
Social Responsibility, Quality & Price Value, and Customer Satisfaction: Focused on the Five
Star Hotel. International Journal of u-and e-Service, Science and Technology, 9(10), pp.209-
222.
D’Annunzio-Green, N., 2018. Cornerstones of talent management as a strategic priority in the
hospitality. Worldwide Hospitality and Tourism Themes.
Han, H., Lee, M.J. and Kim, W., 2018. Antecedents of green loyalty in the cruise industry:
Sustainable development and environmental management. Business Strategy and the
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Hua, N., 2016. E-commerce performance in hospitality and tourism. International Journal of
Contemporary Hospitality Management.
Hwang, J. and Lee, J., 2019. A strategy for enhancing senior tourists’ well-being perception:
Focusing on the experience economy. Journal of Travel & Tourism Marketing, 36(3), pp.314-
329.
Kallmuenzer, A., 2018. Exploring drivers of innovation in hospitality family firms. International
Journal of Contemporary Hospitality Management.
Martínez-Pérez, Á., García-Villaverde, P.M. and Elche, D., 2016. The mediating effect of
ambidextrous knowledge strategy between social capital and innovation of cultural tourism
clusters firms. International Journal of Contemporary Hospitality Management.
Oskam, J.A., Dekker, D.M. and Wiegerink, K. eds., 2017. Innovation in hospitality education:
Anticipating the educational needs of a changing profession (Vol. 14). Springer.
Prud’homme, B. and Raymond, L., 2016. Implementation of sustainable development practices
in the hospitality industry. International Journal of Contemporary Hospitality Management.