Analysis of Business Environment Factors for Marriott International

This report provides a comprehensive analysis of the business environment faced by Marriott International. It begins with an overview of the organization, its vision, mission, goals, and objectives, followed by an examination of its stakeholders and their objectives. The report then delves into the different types of economic systems, with a focus on the UK's mixed economy, and analyzes the impact of fiscal and monetary policies on the organization. It also assesses the effects of competition policy and other regulatory mechanisms. Furthermore, the report explores market structures within the hospitality industry, market forces, and the influence of the business and cultural environment on organizational behavior. Finally, it examines the significance of international trade, global factors, and the policies of the European Union on UK business operations, specifically in the context of Marriott International. The report concludes with a summary of the key findings.

Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Types of organization and vision, mission, goals and objectives of the organization.....1
1.2 The different stakeholders of a business and how organization attempt to meet the
objectives................................................................................................................................2
1.3 The various responsibilities of the organization and strategies to meet them..................3
TASK 2............................................................................................................................................3
2.1 The economic systems and their attempt to allocate resources effectively......................3
2.2 Impact of fiscal and monetary policies on organization and the country.........................5
2.3 Impact of competition policy and other regulatory mechanism on the organizational
activities..................................................................................................................................6
TASK 3............................................................................................................................................6
3.1 Market structures of hospitality industry that make impact on determining the prices and
other decisions........................................................................................................................6
3.2 Market forces that shapes the short term and long term organizational responses..........7
3.3 The business and cultural environment shapes the behavior of organization..................8
TASK 4............................................................................................................................................9
4.1 Significance of international trade in UK business organization.....................................9
4.2 Impact of global factors on the UK business organizations.............................................9
4.3 Impact of the policies of the European Union on businesses in UK..............................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is consist of all internal and external factors which make impact on
the operations of organization such as, workforce, consumers, stakeholders, supply and demands
of the services and products as well (Hill, 2008). This report is based on a case scenario of
Marriott International Inc. which is an American wide-ranging hospitality organization. This
report outlines the organizational purposes of businesses and the nature of the national
environment in which businesses are operated along with the behavior of organizations in the
market environment with significance of global factors that shape national business activities.
TASK 1
1.1 Types of organization and vision, mission, goals and objectives of the organization
The different types of business organizations in UK are categorized. These are as follows, Public: Public organizations are owned and controlled by the government for business
purpose. Such as, Marriott International Inc. and Hilton Worldwide etc. Private: The private sector organizations are established for profit businesses which is
owned privately without involvement of government. Charitable: The charitable organizations refers to non profit organizations. Which is
created for social well being such as, education, health care, religious and other activities
served for public interest. i.e. NHS.
 Partnership: partnership organizations are the business in which two or more partners are
involved for operate business. All the partners are equally responsible for debts, liability
and profits from the business (Kotler, Bowen and Makens, 2006).
Vision, Mission, goals and objectives of Marriott International Inc. are as follows, Vision: The vision of Marriott International Inc. is to provide perform outstandingly well
for their customers, development of sense of loyalty with customers and subordinates and
establishing a loving relationship that possibly goes beyond and provide a scope of
monetary interaction. Mission: The mission statement of Marriott is to pursue excellence with their dedication
to customer, take care of subordinates and they will take care of customers effectively
and to act with integrity (Maclean, 2006).
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 Goals: The goals of cited organization is to reduce energy and water consumption by
20% before 2020. The firm is empowering its hotel development partners to build green
hotels and to provide effective customers services to converse and retain them.
 Objectives: The objective of Marriott International Inc. is to support and respect the
protection of human rights within the organization's domain of power. Moreover, the
firm's long term objective is a commitment for providing employees healthy work
environment by which they can provide effective customer services (Shafer, Smith and
Linder, 2005).
1.2 The different stakeholders of a business and how organization attempt to meet the objectives
Stakeholders in the organizations plays significant role, they directly make impact on
organization's operations, objectives and policies. The Different type of stake holders in Marriott
International and their objectives are as follows, Directors: The directors of the Marriott are important stakeholders. They invest capital in
business and gain profits from it. Their objective in organization is to gain profits and
grow the business. However, Marriott provides efficient customers services to increase
the profitability which helps to meet directors objective in the firm. Employees: Employees as a stake holders provide their efforts and time to make a
profitable business. Their objective is to get job security, job satisfaction and sufficient
payment for their services (Teece, 2010). Customers: Customers are the people who buy the services from the Marriott. Their
objective is to get safe and reliable services which gives value to their money. Suppliers: Suppliers in the firm provides the products that can be utilized by the
organization to serve their customers. Their objective for their contribution in
organization is to get more business and profits.
 Government: The government plays crucial role as a stake holder which manages the
economy. The government charges duties and taxes to the business and analyze the
business in the state and country. However, the objective of Government in organization
is to establish successful business in country's which contributes to economy and
employment (Ruff, 2006).
However, to meet the objectives of these stakeholders of the organization the firm has to
improve the services and increase the productivity and profitability of the organization. Thereby,
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the firm motivates its employees to provide efficient services to its customers and fulfill the need
of all its stakeholders which will help to meet the objectives of these stakeholders.
1.3 The various responsibilities of the organization and strategies to meet them
The organization is responsible for its stakeholders interest, legal, social, environmental,
business ethics and management for successful business operations. However, the Marriott will
increase the efficiency to meet their objectives in the organization (Kovacic, 2004). Cited firm
will provide training and development to its employees so that they can improve their
performances and be capable to provide effective services to customers. The effective and
efficient services will help to meet the objective of customers as well.
Further, The Marriott International have legal responsibilities and need to follow the law
which make impact on organizations planning process. In order to meet these responsibilities the
firm will collect information of the external factors that governs the hospitality industry and
follow the policies, rules and regulations accordingly. Here, as an ethical responsibility the firm
will set the guidelines in order to govern the business practices and to protect the organization
with its employees and other stakeholders. Thus, the firm will establish ethical code of conduct
in the organization and establish ethical rules and practices in the organization. For instance, if
Marriott is attracting its customers by advertising some offers than it should clearly mentions all
the terms and conditions with regards to this. Customers should not be misguided by any of
firm's activity (Björklund, 2011). Moreover, for environment it is responsible for not to harm the
environment however, the Marriott's goals is to protect the environment by reducing electricity
and water consumption for this it always encourages its stakeholders.
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TASK 2
2.1 The economic systems and their attempt to allocate resources effectively
There are Three types of economic systems exists. These are as follows, Capitalism economy: Capitalism is an economic system which is based on private
ownership of the mediums of manufacturing of the product and services for profits.
Capitalism is a type of social system which exists in many countries. According to this
economy, The means for the production and distribution of products such as, land,
factories, technology and transportation are owned privately (Lambsdorff, 2007). This
economy rewards the handwork and punishes the negative attributes such as, laziness and
theft. Socialism: The socialism economic system is based on some kind of social or
government ownership on the means of production of goods and services. This can be
described as autonomous and cooperative ownership. As per this economy systems the
products are carried out directly for use.
 Mixed economy: This economic system consist features of both capitalism and socialism
economic systems. This economic system allows the involvement of private economic
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Illustration 1: Types of Economic Systems
Source: http://www.romeconomics.com/wp-content/uploads/2012/12/Economic_System.png

freedom at some level for the use of capital along with government interference in
economic entries in order to achieve the social targets (Welford, 2013).
The Economy system of UK is mixed economy, which allows the private participation in
production while also make sure that its not harming the society or the markets. Mixed economy
in UK helps in protecting the domestic procedures of a products by distinguished taxes on import
and exports. Due to mixed economy the government has also helped in raising the new industries
in UK and protected them form foreign competition. However, because of distinguished tariffs it
has low rate of tax on import and export for domestic businesses which helps the domestic
business to be successful.
Further, The Economic systems of China supports the Capitalism economic system in
which the productions are complete owned and managed by the private individuals and
organizations. Because of this, producer have efficient control of production process and quality
of product is better than government owned firms. Moreover, the capitalist economy provides
wide range of products to their customers (Davidavičienė, 2008). However, with their
privatization China can modify or amend the resources for their country's growth.
2.2 Impact of fiscal and monetary policies on organization and the country
Fiscal policies and monetary policies have crucial role in business environment. Fiscal policies
are the governments decision with respect to spending and tax rates. For example, if government
of the country wants to affect the economic growth, then it can increase the spending of products
and services which will increase the demand as well. As a result the manufacturing firms will
increase the production due to high demand. Thus, for effective supply of the demands the firms
will hire more workforce. Thus, people who were not having money to spend on goods and
services will be now able to do so.
The monetary policy is the decision taken by government regarding supply of money and
interest rates for maintaining the strength and achieving the economic growth (Xue, Shen and
Ren, 2010). The primary monetary policy tolls is basically used for increasing and decreasing the
supply of money in economy.
The factors which affects the Marriott International Inc. are as given below,
Change in tax rate: Government enforce taxes and duties to fulfill so many objectives of the
country, which begins from increasing revenue to directing business decisions. For Marriott
International change in tax rate represents the cost involved in services for generating the
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revenue. However, if tax rate is increased in the country than it will directly affect the prices.
Changes is monetary policy will force to Marriott to change the prices for its hospitality services.
Change in interest Rate: Further, Interest rates are the regular part of business operations.
Organizations pay interest on their borrowed money. Similarly, they receive interest if they give
extra money to someone for receiving interest (Maclean, 2006). High and low interest rates are
the amount of money which is floating through the economic systems of the country such as,
cash in banks and credit cards, home loans, car loans etc. Monetary policies carried out the
changes in interest rates. For instance, In high interest rates it will be difficult for Marriott to
borrow money from market for its business operations such as payroll and store purchases. As a
result the firm will charge high cost to its customers.
2.3 Impact of competition policy and other regulatory mechanism on the organizational activities
There are several policies that is carried out by UK government which affects the
business of Marriott's. These policies are as follows, The Competition act 1998: This act provides and updated framework for identifying and
dealing with inhibitory business practices. Enterprise Act 2002: This act makes numerous important words, which is designed to
prevent on abuses that harms the customers. It is similar to fair trading act. Fair trading act 1973: This act was created by UK government to deal with mergers and
misuses of monopoly authorities in market.
 Resale prices act 1976: This act was made to deal with the attempts to impose minimum
prices of the products which can be resold.
Here, all these competition policies have been developed by the government of UK to
control the competitions among the businesses. With regards to these acts Marriott will apply
fare trading act for healthy competitions (Shafer, Smith and Linder, 2005). For instance, Marriott
has advertised special offer on bookings of luxury rooms. Then, it should mention all the terms
and conditions clearly with it. Cited firm should not change the offer when customer claims it.
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TASK 3
3.1 Market structures of hospitality industry that make impact on determining the prices and
other decisions
Market structures in Marriott are based on the nature and level of the competition in the
market for hospitality services. With regards to competition, market structures are as follows, Monopoly: In this market situation, there is only one seller of the product or services with
obstacles for other sellers' entry. In this structure service/product have no close substitute.
In this market structure, price is determined by the seller and it can charge as per his/her
wish as there are no close substitute in the market. Further, output decision is solely lies
with monopoly firm and it doesn’t focus upon market demand. Perfect competition: In this market structure there are numerous buyers and sellers of the
services. Which is engaged in buying and selling activities without any restrictions and
have adequate knowledge of market (Blocher, Chen and Lin, 2008). The Marriott
international comes in this market structure. The firm has so many other competitors in
markets but Marriott is leading among them because of its efficient customer’s services
and unique selling point. Pricing, here, is determined based on the demand and supply in
the market. Further, Marriott need to consider the price of competitors while setting price
for its room and services. This aids in gaining attention from varied target customers and
hence aids in grabbing customers of other company as well.
 Oligopoly: Further, Oligopoly is a market condition in which there are only few firms in
the market and have few competitors. In this market structure, if one firm make the
changes in prices than it will affect the other firm as well. For instance, if one firm lower
downs the price than other firms will also have to do the same to retain the customers.
Moreover, output decision is made based on the demand in the marketplace.
3.2 Market forces that shapes the short term and long term organizational responses
There are numerous market forces that shapes the organizational responses. These are as
follows, Demand and supply: Demand and supplies are the effective market forces that shapes the
organizational responses such as, pricing, cost control and acquisition etc. high demand
of the services lower down the sullies and increases the prices. However, in low demand
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situation the supplies are increased and prices become low (Grimsley, 2015.). For
instance, in tourism season the demands of hotel rooms is increased but because there is
only few rooms are available in all hotels in the city than prices will be raised. In this
situation Marriott will also increase its prices. On the contrary in Low demand the firm
have to lower down the prices to manage the business.
 Customer perception: Furthermore, customers perception also shapes the organizational
responses in controlling their costs. This situation involves consumers buying behavior
and decision making capability. It is based on the concept of sensory representation of
services by marketing and advertisement. However, Marriott should use effective
mediums to attract the customers. In advertisement firm should effectively represent the
services so that it will make positive impact on buying behavior of customer and decision
making ability.
3.3 The business and cultural environment shapes the behavior of organization
Business and cultural environment plays a significant role in shaping the behavior of
organization. In this context, business environment is consist of political, social, economic,
environment and technological. Political factors develop policies and norms for business
organization that need to be adhere by business entity. Marriott need to adhere with health and
safety law, employment law, working hours act, minimum wage and other related. Due to this,
Marriott need to develop its policies so that it can manage its operation as per the guidelines set
by government. Moreover, behavior of Marriott is even shaped by economic factor and hence
they develop strategies accordingly. It increases its prices for rooms at the time of high demand
in the market and lowers the same when there is less demand (Craig and Campbell, 2012). This
helps the firm in sustaining in the market for longer.
Beside this, company has installed latest technological equipment and devices in order to
offer quality and sound services to clients. Also, latest technology such as key-less lock system
of room, Wi-Fi, etc. aids in boosting the satisfaction level of in-house guest. Moreover, culture is
one of the key determinant of behavior for Marriott. As per the social and culture background of
customers, the company mold its advertisement and marketing campaign. It emphasize on
reflecting elegance from the advertisement in UK for catering the attention of customers.
Moreover, it has altered food menu as well so that ultimate needs of customers can be met. For
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this, company has add on Indian, Arabic, Lebanon, Italian, Chinese and other. This aids in
gaining high amount of support from customers.
TASK 4
4.1 Significance of international trade in UK business organization
International trade is essential for all the countries as it is quite difficult to grow and
produce all service only within the country. Some services or products could be available in the
country, if not then it needs to be exchanged with products and services by international trading.
It will provide the consumers comparative advantage (Ruff, 2006). Moreover, by trading
globally UK business organizations will be also able to open up for lower production costs. For
Instance, Marriott imports many food products and housekeeping products from other countries
at low cost. Further, cited firm have many branches in multiple countries which gives
opportunity to its workforce to work in other country's branch. This will help them to earn extra
income. Beside this, international trade also helps in diversify the business through which growth
rate in increased.
Meanwhile, it also supports in reducing risk of loss due to large number of operations in
different countries. This also aids in boosting the profit margin of the company. In addition to it,
international trade also increases the growth opportunities by addressing the gaps in different
marketplace. However, there are negative aspects of international trade as well. It certainly
increases the competition from which company faces problem in sustaining. Also, demand of
product in different market varies from each other which makes difficult for business to develop
new product for every market. Considering all these, it can be conclude that international trade is
of key importance of UK businesses as it offers a platform to address the opportunities in the
market irrespective of countries.
4.2 Impact of global factors on the UK business organizations
The global factors of the business are analyzed by PESTEL analysis. Which is as follows, Political: The political factors such as rules and regulations implemented by the
government make huge impact on the businesses. Thus, Marriott should consider all its
tax policies and government influence on business. In addition to it, political instability
leads to development of new policies of several interval which hampers the operation of
businesses.
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 Economical: The economic factors depict the economy of the country that makes impact
on business. However, Marriott should analyze about the disposable income of the
consumers, credit accessibility, interest and inflation rates in this economic factors
(Björklund, 2011). Additionally, company is also affected by foreign exchange due to
global operations. From changes in foreign exchange rate, profit of company also gets
affected. Social: The social factors depict the distribution of wealth, cultural diversification,
lifestyle of the people which affects the business growth of business. Further, there are
differences in cultural and social aspects in different countries, due to which company has
to develop different set of products and services.
 Technological: As per technological factors the firm should analyze the technological
growth of the country in the means of communication, services and other aspects of
business.
 Environmental: environmental factors such as energy consumption, environmental
protection laws and waste disposable factors should be analyzed.
 Legal: The legal factors are consist of laws, legislation and policies implemented by the
government of UK which affects the business of Marriott.
4.3 Impact of the policies of the European Union on businesses in UK
The UK business organizations are maintaining all the rules and regulations with the
influence of EU. According to this, all countries will follow the rules and regulations of
European Union (Tan and Tan, 2005). For instance, if Marriott wants operate a business in
European Union country than it will need to take the approval from EU for foreign exchange.
Moreover, EU has implemented policies which affect the businesses of UK through their
taxation law, spending and inspiring business activity through some support and grant. There are
several EU policies that affect the business activity to core. As per EU working time directive,
employees are not force to more than 48 hours a week and this makes negative impact on
business performance. This is so because company need to pay extra to employees for extra
working apart from working hours. Further, EU competition policy ensures that company is not
taking unfair advantage of dominant position. It closely monitors the activities of business in
order to ensure that it is been conducted in fairly manner.
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