Marriott International: Challenges in Global Business Expansion

This report provides a comprehensive analysis of Marriott International's international business strategy, focusing on expansion into South Africa and Asia. It examines the challenges and opportunities presented by these markets, considering factors such as environmental conditions, economic integr...Read More

International Business

TABLE OF CONTENTS
Executive Summary ........................................................................................................................3
INTRODUCTION...........................................................................................................................4
ANALYSIS AND EVALUATION.................................................................................................5
ANSOFF Matrix..........................................................................................................................6
PESTLE Analysis........................................................................................................................8
Cultural issues............................................................................................................................10
Global economic development and its impact on Marriott hotel...............................................10
National responsiveness vs. economic integration challenge....................................................11
Economic Integration Process (EU, NAFTA etc.).....................................................................11
INTERGRATED SUMMARY AND SOLUTION OPTIONS.....................................................12
RECOMMENDATION.................................................................................................................14
REFERENCES..............................................................................................................................16
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EXECUTIVE SUMMARY
Hospitality industry is considered as one of the fastest growing service industries that
focuses on rendering luxurious and leisure services to customers and different clients. In order to
survive in the competitive scenario, hospitality organization must focus on International
businesses in the emerging markets so that they may enhance their brand image as well as
portfolio so that large customers get attracted towards it. Marriott International of UK is a largest
and well known hotel of UK and to maintain standards, hotel has focused on pricing factor which
is also regarded as promotional element of business.
(a) Option selected
The selected option for the international business assignment is to focus on the current
business problem and opportunities existing in the countries where Marriott International plans
to expand their business activities. Furthermore, researcher has also analysed the scenario with
the help of different tools and models.
(b) Core international business challenges and justification
The core international business challenges that Marriott International faces while
expanding their activities in the South Africa and Asia region is related with environment. As,
both the environmental condition within both the region change continuously as South Africa
covers 3000km coastal area that impact the environmental condition. While, Nepal is consider as
major hub for earthquake that affect the operation of hospitality organization in the region.
However, it also focuses on current international opportunities that are available for hotel
Marriott International that support them in growing their market area by targeting low segment
customers. The Marriott International is best known for their premium class luxurious & leisure
services thus, to grab the overall marketplace and to become the leading organization in the
hospitality industry, they must focus on entering in low budget segment to satisfy different needs
of customers.
(c) Approaches taken in analysis
Furthermore PESTLE, Ansoff matrix and SWOT analysis model have been used to
analyze the current scenario by determining different internal and external factors that affect the
international businesses of organization. However, these factor have also provided strategic
insight of the organization that supports management in taking effective decisions.
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(d) Key findings and recommendation
In addition to this, it is also recommend certain strategies and options that support
organization in creating successful international business. Recommended strategies will
effectively support the Marriott International to response with the opportunities present in the
market that support them in gaining competitive advantage.
(e) Critical reflection on the implication of the recommended option
Implication of strategic alliance to Marriott results in reducing the extra cost of
operations as with whom they are formulating the strategic alliances are already existing within
the Nepal. Furthermore, another implication of the recommended option that is strategic alliance
involves that it results in sharing the expenses as well as risk associated while entering into the
new market that is South Africa and Asia.
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INTRODUCTION
Hospitality industry is considered as one of the major service industries that renders
different services to the traveller and visitors so that they may enjoy their pleasant stay.
However, in the contemporary scenario, the ratio of travel and tourism has been increasing since
it also contributes in the development of economy (Dunning, 2012). Moreover, hospitality
industry possess broad range of services that are provided to customers and visitors such as
lodging, accommodation, food and beverages. Hospitality sector mainly depends upon the
accessibility of leisure time and customers disposable income. With the increasing hospitality
sector, it increases the number of visitors and travellers and simultaneously it also outcomes in
developing and growing of economy. The main objective for conducting the study is to focus on
assessing the international challenges and opportunities that are faced by the organization while
expanding their services and business activities into the new region and countries. For
accomplishing this objective the selected countries in which hospitality organization would
expand their businesses is South Africa and Asia as both the countries are highly potential for the
international business.
Overview of the organization
Present report focuses on one of the renowned hospitality organizations that is Marriott
International that organizes and manages wide range of portfolio of hotel that are engaged in
rendering services related with lodging, accommodation etc. However, organization has more
than 4087 properties in different countries and territories that support it to render services in the
broad marketplace. Marriott international is considered as a premium organization that renders
premium quality services to high income customers (Demirkan and Demirkan, 2014). Whereas,
in the contemporary scenario, organizations are engaging in international business as it provides
ample of opportunities so that they can easily serve the needs and requirement of large market,
adopt new advanced technology and support in overall development to sustain in the new
marketplace (Wild, Wild and Han, 2014). Main motive of hospitality industry is to expand
business activities, acquire resources and reduce the level of risk that is being faced by the
organization in the current scenario. With the help of economic integration process, firm can
easily save its future as different opportunities are being present with the help of which company
can become famous in worldwide.
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Relationship to the organization/ Challenge to be discussed
With the increasing pace of globalization author has assessed different challenges that
will be faced by the Marriott International while expanding their business activities in the
international market that is South Africa and Asia region. The author relationship with the
organization is that it support in examining the challenges that exist in the external market and
countries while expanding the activities. The different challenges that Marriott attain while
expanding business in South Africa is that the region possess high taxation level thus, it act as
the major challenge for Marriott international to expand their hotel within the South Africa.
However, Marriott will also counter with different challenges while expanding or entering into
the Nepal, Asia region that is the place is the hub of natural calamities that is earthquake. Thus, it
may act as major challenge for the Marriott International to operate in the Nepal region.
Identification of critical problem or opportunities relating to international business and their
impact on organization
With the increase in globalization, it also outcomes in increasing the level of competition
in the hospitality industry as many firms and organizations existing in this industry deliver
homogeneous services to the customers (Cantwell, Dunning and Lundan, 2010). There are
certain key challenges which support hospitality organization to focus in the international
business so that they may increase their market coverage as well as it also support them to
sustain in the competitive global marketplace. However, there are certain opportunities and
trends that support hospitality organization to focus on international business that are economic
integration processes, global economic developments, international dimensions of R&D and
innovation etc. All these factor effectively contribute in successful resolution of the international
business (Folsom and et. al., 2012). However, the impact of these challenges and opportunities
will benefit the Marriott International in expanding their activities in the new region by
increasing the overall market share.
Overview of the relevant context contributing to the problem and opportunities
Therefore, in the competitive environment, Marriott has potential opportunities to target
all income customers by modifying their services and pricing strategies. It has been stated that
Marriott International is highly dependent upon their luxury brands in US market. Thus, it lacks
low cost life style brands which is now popular in developing nations. Therefore, there are
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several opportunities for Marriott International to expand their services and hotels in the markets
like South Africa and Asia. Both the countries are consider as best option for the Marriott
International as there is no presence of premium and luxurious hotel. However, expanding hotels
in South Africa is beneficial as the country have around 3000 km coastal line and the major cities
like Johannesburg, Cape Town, Durban are situated at the coastal area that attracts many visitors
and business travellers to visits such places (South Africa, 2016). Therefore, it will positively
impact the brand image of Marriott and result in successfully expansion of their international
business (Beaverstock and et. al., 2010). Despite of this there are certain problems and issues
associated with the Marriott International while expanding activities in Nepal within Asia region
that is Nepal one have one international airport that will affect the demand of visitors and
travellers as mode of transport is limited within the country.
By adopting technique that is entering in the new markets like South Africa and Asia
region will affect the business of Marriott in a positive manner as with this, company gets
opportunities to tap or expand business into the new market around the world. However,
globalization has a positive impact on the international business that results in raising the level of
competition. The competition may be related with the services as well as cost and price of the
services (Hovhannisyan and Keller, 2010). With the help of entering in the Asian market that is
in the Nepal region Marriott International will target all segment customers so that they should
satisfy the requirement of all the customers and contribute in rising economy of emerging
markets. Although, international business will also impact on the organization through enhancing
the level of innovation as well dimensions of R&D so that they must have opportunity to
innovate their customer service so that they might target all segment customers who are related
to lower, middle and upper class.
Approaches to assessing the issues and opportunities
Furthermore, this report will also assess different conceptual frameworks as well as
models that would assist Marriott international in identifying and assessing the internal and
external factors that act as the major challenges for them in order to engage in the international
business (Hynes, 2010). Different models and frameworks are SWOT analysis, Ansoff matrix,
PESTLE analysis etc. These frameworks and models support the senior management of Marriott
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International in providing strategic insight that helps them in taking effective decision making so
that they may successfully engage in the international business.
ANALYSIS AND EVALUATION
The analysis and evaluation for Marriott hotel can be done by applying several kind of
tools and techniques. It facilitates corporation to expand business in the marketplace and deliver
good quality of services among customers. It consists of several tools like SWOT, PESTEL and
Ansoff matrix (Aggarwal, Berrill and Kearney, 2011). All these framework and models are
proved to be effective in determining long run success of company with the increased rate of
return. These are explained as follows-
Models and frameworks for identification of internal and external environment
SWOT analysis of Marriott hotel
It is an internal analysis which provides detail information related to internal as well as
external environment of corporation. By using this information, company can easily operate at
global marketplace with the increased rate of return. It has been applied as follows-
Strengths
 Good brand reputation
 Range of brands across 70 countries
 Technical innovations
 Pool of highly competent workforce
Weaknesses
 Limited market share
 Dependency on luxury brands in US
market
 Lack of low cost life style brands
Opportunity
 Low cost market segment
 Eco tourism
 Growth in Asian Travel and tourism
market
 Global hospitality sectors are at boom
that act as opportunity for Marriott
International (Hotel Industry
Analysis, 2012).
Threats
 Political instability
 Terrorism
 Economic recession
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PESTLE Analysis
It is the most important external analysis which provides detail information with regards
to uncontrollable factors of environment in the respect of Marriott hotel. It enables management
of corporation to bring modification in the current work environment and accordingly assists to
gain competitive advantage in the marketplace (Hamilton and Webster, 2015). It has been done
as follows- Political factors-It is the most important factor which affects the business of Marriott
hotel to a great extent. This is because of danger of terrorism, international relations and
political climate at the tourist destinations. For example, military conflict is the main
issue through which international air travel cannot work effectively. In June 2015, 39
people were killed at hotel beach in Tunisia. Such kind of incident frightens people who
access services of Marriott (Stephan and Roin, 2010). Marriott operates in 70 countries
like Nepal, Malaysia, Germany and UK as well as US. Also, Marriott has its existence in
Syria as well and in turn this affect operation of company to a great extent (PESTLE
Analysis of Marriott International, 2015). Furthermore, in 2014 downing of Malaysian
Airlines Flight which was fired from the Ukraine. Owing to this, scope of tourism has
decreased to great extent. Furthermore, political instability in Nepal can create issues
while expanding business of Marriott hotel. However, government of Nepal facilitates to
support travel and tourism business to a great extent. On the other hand, South Africa has
stable political situation which explore possibilities of effective progress of Marriott
hotel. Furthermore, it would be effective for corporation to expand business in South
Africa because of high demand of luxury hotel services. In addition to this, being member
of World Trade Organization South Africa proves to be effective location for growth and
development of Marriott hotel. Economic factors-Economic factor affects the business of organization very badly due to
economic crisis and adverse condition for the overall country. Here, slow growth of
South Africa and Nepal affects the operation of Marriott because of low spending limit of
buyers. Owing to this, organization cannot pay attention on its growth and expansion
because of low profitability and high cost of production (Hussain Rizwan and Latif,
2013). Furthermore, high exchange rate for US dollar is other factor which serves as a
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barrier in the growth and expansion of Marriott hotel. Apart from this, because of slow
economic growth, stock market in South Africa is collapsed and this is the reason that
organization cannot cope up with the changing scenario. It is the fact which needs to be
kept into mind by management of Marriott hotel. In addition to this, income inequality
and constant growth of middle class people do not allow them to visit across other
countries and access good quality of services that are rendered by hotels (Taylor, 2012).
The economic condition of Nepal is not stable due to political uncertainty. Further,
diverse exotic culture of country tend to ensure growth of Marriott hotel (PEST Analysis
of Nepal, 2016). However, lack of skilled workforce can be have negative impact on
corporation at the initial stage. The country has main sources of growth from
construction, financial and agriculture services as well as other services. Owing to this,
growth of rate of nation varies rapidly. At the same time issue of inflation may also be
issues in Nepal. Apart from this, economic condition of South Africa is quite better where
government is trying to remove unemployment with the help of industrialization.
Similarly, in 2014 hospitality industry of nation got benefit due to increased customer
base and high room rates (Growth spurt predicted for South Africa's hospitality sector,
2016). Social factors-Social factors are the other factors which affect the performance of
company through changing the preferences and taste of buyers. For example, willingness
of people to visit other countries and pay more for the products and services aid to
enhance sales turnover. Furthermore, cultural changes and effect of population bring
positive changes on the performance of hotel (Cadle, Paul and Turner, 2010). This is
because of increasing number of Asian travelers. Not only this, but now days people
demand for certain kinds of travel experiences like luxury resorts and packages tours.
This in turn increases the demand of hotel services in the marketplace by which Marriott
hotel can create its competitive edge in the marketplace. In Nepal people tend to have
local life style where different kind of culture and beliefs are followed. Similarly, people
of nation speak different languages like Indo-Aryan, Tibeto-Burman and Mongolian.
Some of these attractive aspects tend to increase demand of tourism in Nepal. Owing to
this, Marriott hotel can provides its luxurious services in Nepal. In current era preferences
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of buyers are changing at rapid speed but due to less available of luxurious hotel in South
Africa demand of Marriott hotel can be increased. However, being hot spots country it
may attract less visitors in a particular season whereas immense support from the side of
government can prove to be effective in successful expansion of corporation. Technological factors- This is one of the most imperative aspects which reduces barriers
related to distance and helps company to attract more buyers. Here, upgraded
technologies like social media, internet and several other factors have made it easy to
promote services across the globe (Guay, 2014). It is the only fact that hotels work with
integrity and approach buyers effectively. For example, Marriott hotel ties up with the
travel agencies so that promotion plan can be made effectively through understanding
current market trends. At this juncture, customers or visitors find effective holiday
packages in affordable prices. A counter argument might be that Marriott operates only in
premium segment by which low and middle class do not feel comfortable to access its
services (Bartle, 2002). Technological environment is considered by each organization
while expanding at international level. Here, the well known fact about Nepal is scarcity
of resources like gas, oil and coal which in turn upgraded technologies are used to import
the same. However, Marriott hotel has strong goodwill at global level so that it can easily
import required material. In addition to this, technologies such as Software as a service
(SaaS), mobility and social media. It aids to give rich experience to customers which in
turn increases scope of Marriott hotel. All these tools make it possible for coproration to
expand itself at international level. This is because hotel must be able to communicate its
existence via internet across different countries. It aids to promote travel and tourism
services of country. It can be critically evaluated that there is poor infrastructure facilities
in rural areas of South Africa. Legal factors-All organizations which are operating in different country need to follow
the rules and regulations that are imposed by government. For example, Marriott needs to
consider status of service like Airbnb. Furthermore, organization needs to follow the
country specific rules with regards to employment, health and safety as well as other
related regulations. On the other hand, different rate of taxes reduces the level of
profitability. Similarly, high cost of labor is also a barrier in front of hotel management.
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For example: regulations related to minimum wage in different countries are different.
This increases financial burden of Marriott hotel (Mason, 2007). Legal framework of
Nepal tend to support business of hotel Marriott. It is because Nepal entered into the
Double Taxation Avoidance Agreement. However, UK is not included in that agreement.
Thus, it is important for Marriott hotel to pay off taxation in right manner. Furthermore,
government of South Africa approached Europeans Union for development of tourism
white paper. It shows that favourable legislations are also there along with some of the
structure policies such as Visa regulations
 Environmental factors- This is another potential factor which could affect organization
by increasing electricity cost and conducting sudden changes in the environmental
conditions. Furthermore, global warming and high temperature influence Marriott to
close some of its beach resorts because of too hot environment. Furthermore,
environment issues is serious in country as it serves as hub of earthquake. At this
juncture, customers or visitors tend to avoid such kind of tourist locations. It shows that
management of Marriott hotel need to adopt effective strategies so as to increase
customer in the same location. The conservation practices of South Africa are effective.
However, there are critical issues with regard to soil erosion, air pollution and
deforestations. These issues must be taken into account by Marriott hotel so to face
challenges in an effective manner (Development and Promotion of Tourism in South
Africa White Paper, 2015).
Model for strategic insight
ANSOFF Matrix
ANSOFF matrix mainly focuses on the organization's present situation as well as their
services and markets to whom they mainly target. However, with this framework, researcher has
easily determine the current market position as well as their existing services of Marriott
International that they provide to their existing customers (Condry, 2013). The matrix also
supports senior manager in determining four combination that may be used by Marriott
International so that they may grow their business activities within the South Africa and Asia
region through inventing new services for their customers. The matrix mainly suggests four
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growth strategies for Marriott International so that they may easily expand their business
activities in the international region (KHO, Stulz and Warnock, 2009).
 Market penetration- In order to increase the market share as well as profitability ratio,
Marriott International focuses on market penetration strategy. Under this strategy,
organization seeks to accomplish growth with their existing services in the current
marketplace. For instance; there are different strategies that Marriott may use while
penetrating the South African and Asian market that is related to adjust prices of their
room according to the needs of customers (McAusland and Millimet, 2013). As, South
Africa is the sub-Saharan Africa that possess huge potential for successful introduction
Marriott International in the region. Although, the region also possess growing segment
of middle class individual with the disposable income that is beneficial for hotel to
expand their hotels in SA. However, Marriott brand portfolio seems to penetrate the
various markets by providing broad range of services in low price so that they can easily
target all the segment of customers and satisfy their leisure needs. As, the income level
within Nepal region is relatively very low thus, expanding business activities at the lower
is beneficial for the organization. Products include the rewards, benefits and other
facilities that are provided in all the hotels.
 Product development- It is another strategy that is focused on product development.
Under this strategy, Marriott hotel seeks growth by developing or focusing on new
services in the existing marketplace so that they can easily attract their target customers
(Rodrik and Subramanian, 2009). For instance; with the increase in technological
advancement, Marriott International should focus on rendering online services to
customers so that they can conveniently book the hotel rooms and other services. Another
example is that by using product development strategy, Marriott International may also
enable new services to attract customers such as Spas facilities. It will benefit company
as it mainly targets high income customers that are always keen to consume leisure and
luxurious services of the hotel.
 Market development- Market development is an effectual growth strategy that must be
adopted by Marriott International in order to succeed in the competitive environment
(Chen, 2010). Through using this strategy, firm can grow their market by enabling
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existing services in the totally new marketplace. This growth strategy is effective for
Marriott International as at the time of entering in the market like South Africa as well as
other Asian market, they should focus on different strategies like new packaging of
products and new distribution channel so that existing services can easily render in the
new market.
 Diversification- The last strategy of Ansoff matrix includes diversification under which
Marriott International can develop new services in the totally new market so that they
may easily target new customers (Folsom and et.al., 2012). This is considered as one of
the most risky strategies as it mainly possess to introduce new services in the totally new
marketplace that would attract more customers.
Using primary and secondary data for analysis
Cultural issues
Cultural issues are always faced by every organization when it expands itself at global
space. Here, it is important for the management of company to assess uncertainties and plan
accordingly. Here, Marriott hotel is planing to expand in Nepal so issues can be faced by it while
hiring workforce (Wakeam, 2003). This is because they belong to different region, race and
ethnicity and work culture of Nepal is slightly different from others. Owing to this, issues may be
faced at the time of hiring personnel as they cannot adjust in organization in less time span.
However, Marriott hotel has its own strong work culture which motivates employees and enables
them to provide long term services on behalf of hotel. Similarly, same kind of issues can be
faced at South Africa. However, it is common for Marriott hotel because it operates in number of
countries at international level. Owing to this, integrated approach is followed with inclusion of
cultural diversity.
Global economic development and its impact on Marriott hotel
Marriott has its strong reputation at the global level which assists company to expand
itself in the marketplace with the increased rate of return (Hospitality industry & Marriott
International, n.d). It is the only reason that hotel has its operation in approximate 70 countries.
In this regard, corporation is getting support from EU policies and legislation so that it can
operate itself in the global marketplace with the less entry barriers. Furthermore, corporation can
easily cope up with changing scenario. However, because of center focus on premium Segment,
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company can create leading position in South Africa due to less competition in the same location
(Conteh-Morgan, 2006). This is the reason that it should focus on its expansion in countries like
Nepal and South Africa.
National responsiveness vs. economic integration challenge
Marriott hotel operates in several countries with high exchange rate like Dollar and
Pound. It makes difficult for company while expanding in the countries like South Africa and
Nepal. However, financial growth of Marriott hotel facilitates to determine its competitive
growth at international level. In addition to this, management of Marriott hotel has capability to
integrate with challenges so as to expand business at the marketplace. Apart from this, national
policies and procedures are complied by Marriott hotel (Gunter and Hoeven, 2004). However, it
is the policies and procedures of Marriott hotel through which organization can integrate itself at
international level and operate business in an effectual manner.
Economic Integration Process (EU, NAFTA etc.)
With the increasing level of investment and international business, horizon of economic
integration process between two or more nations or country also get deepen. The foremost
example of economic integration process includes EU (European Union), NAFTA (North
American Free Trade Agreement) etc. Marriott International mainly earns revenue by focusing
on their brand portfolio that are located within UK region. Therefore, with the increase in
globalization, UK government integrates with EU agreement so that hotel management can
easily expand their business activities in the new market (Demirkan and Demirkan, 2014).
European Union (EU) is a union that mainly has 28 member states of Europe whose main motive
is to enable free transfer to products and services as well as capital. Socio-political union mainly
defines numerous rules, policies and statute laws that are abided by the member state to have free
flow of goods and services. Through adopting EU policy, Marriott UK can easily import the
ingredients or any food items from the EU states without any barrier. In order to negotiate and
keep lawful practice within the firm, trade free regulations are pleased by EU. In aspect of this,
some major policies that support Marriott is international policy (Dunning, 2012). However,
government plays a lead role in increasing the import and export ratio and thus standards of EU
assist business organization of UK to trade efficaciously within the international market. For
instance; in case of Marriott International, this policy is highly suitable for reducing trade
15

barriers from the international trade perspectives (Cantwell, Dunning and Lundan, 2010). Thus,
through adopting this policy, businesses can maintain corporate relationships with other business
clients. Therefore, hotel needs not to undergo with international policy barriers. Therefore, EU
has develop free trade free regulations practices with the purpose to organize and manage
international duties and hence this is also constitutional for constructing or expanding business in
the different state.
Interlink between various concepts, framework and models
According to above frameworks and models, it can be said that Marriott hotel needs to
formulate effective strategies in order to target low cost segment. However, it has also been seen
in SWOT analysis that hotel has low market share just because of its centre focus on the
premium segment (Dudovsky, 2014). Owing to this, it can be said that company can expand
itself in the developing markets like South Africa and Nepal for targeting number of people.
However, it is very important to bring innovation in services. Furthermore, hotel is operating at
different places where legal aspect and social trends are kept on change. At this juncture,
organization can emphasize on expand itself at international level in order to grab available
opportunities. It facilitates to increase market share so as to increase customer base. In addition
to this, PESTLE analysis facilitates to bring detail information related to external environment of
Nepal and South Africa. It leads to formulate effective strategies for corporation so as to create
goodwill of firm in the marketplace. Apart from this, ansoff matrix has been used so that
company can select effective option to enter into new market.
Explicit interpretation of results
The above mentioned findings are showing that corporation can expand itself in emerging
market like South Africa and Nepal. It is because till now it is not working in these location
hence selection of these particular location aid to increase it profitability. However, cultures
issues and environmental factors must be considered while expanding in selected countries. It
proves to be effective in reducing impact of adverse environmental factors
INTERGRATED SUMMARY AND SOLUTION OPTIONS
According to the detail analysis, it has been found that Marriott hotel has its strong
position in the marketplace in both financial and non-financial aspect. However, organization is
planning to operate in new market as South Africa and Nepal(Folsom and et. al., 2012). Further,
16

it has also been found that technical innovation of hotel makes it different from others and
facilitates to cover large marketplace. This in turn company is expanding successfully in 70
countries. Also, several kind of strategies are adopted to retain employees for longer time span
which leads to cost down and enhances the scope of growth and success of the corporation. Not
only this, organization has a wide range of services as per the preferences of high profile buyers
which leads to enhance their level of satisfaction and retains them for longer time span. This
aspect creates distinctive image of company in the marketplace. It depicts that organization is
performing competitively good in the marketplace and also serving properly as per the needs of
different buyers. It can also be said that Marriott international is a global leader in the sector of
hospitality because of its wide range of services (Beaverstock and et. al., 2010). It proves to be
effective in attractive more buyers and catering their need in more effective manner. Above
explained models and frameworks depict that hotel is having fast development in particular
sectors like South Africa and Nepal. It aids to enhance market share as well sales turnover. On
the other hand, competition phase of Marriott hotel has been become a crucial aspect by which
management adopts different strategies to create unique identity. It is because South Africa has
less number of luxurious hotel thus expansion in such kind of location makes it possible to
increase overall sales turnover ans successful expansion.
Furthermore, hotel operates by keeping into account ethical aspect. For example,
environment is preserved to ensure global growth and safe future so as to determine sustainable
development of corporation. Its efficient operation in the hospitality industry is one of the
positive aspects that helps to meet the expectations of buyers (Hovhannisyan and Keller, 2010).
For example: organization has efficiency in overall aspects like human resources, IT solutions
and good relationship with suppliers. All these key aspects contribute towards the long run
growth and success of hotel. Also, company tracks feedback of buyers through guest satisfaction
survey for every brand of Marriott hotel. It makes possible for corporation to create its brand
image in front of customers. Apart from this, as per the findings of GSS, company provides
training to its employees so that it can deliver good quality of services to the prospective buyers
(Aggarwal, Berrill and Kearney, 2011). Different training and development programs contribute
towards to motivate workforce. Likewise, employees can also be trained as per the requirement
17

of business. This is one of the effective methods by which company put workforce into action so
that they can put efforts in the direction of growth and success.
Marriott hotel is also performing well by taking into account the innovation. For
example: The Marriott Mood Reader is an effective technology that is used by the organization
so it can play music in accordance to listeners. However, it is a unique and personalized service
that is offered by Marriott to serve its premium buyers or visitors (Condry, 2013). It makes
organization different from the other hotels. It can also be said that center focus of Marriott hotel
is based upon the expectations of customers. This helps to achieve long as well as short term
objectives of hotel so as to increase customer base and create competitive edge. On the other
hand, analysis part is showing that Marriott hotel has several opportunities in emerging markets
and innovation in customer services. Along with that more innovation in service quality is also
the major part through which it can grab opportunities that are available in developing nations.
Apart from this, competitors like Hilton hotels, Starwood hotels as well as Taj hotels are the
main competitors of Marriott hotel. This competition could be minimized by using effective
strategies such as segmentation on the basis of low cost customer or middle class buyers. A
counter arrangement might be that large number of hotel can dilute brand. Here, corporation puts
emphasis on quality of services and innovation in the same. This is the reason behind the steady
growth and low market share (KHO, Stulz and Warnock, 2009).
In addition to this, analysis of external factors depict that organization should always be
ready to face barriers in its expansion. Owing to this, Marriott hotel focuses to give its best to
follow the regulatory framework imposed by government of specific country and accordingly
operates itself (McAusland and Millimet, 2013). Similarly, Ansoff Matrix is also showing that
market development is the effective strategy through which Marriott can expand itself by
opening new outlet or hotel or through franchise. It enables management to grab the available
opportunities and control its weaknesses. Also, implementation of this strategy depicts that
available limited resources will be utilized effectively. Thus, organization's background and
available opportunities depicts that it will be beneficial to expand at international level by
entering into new market where it is not operating currently (Rodrik and Subramanian, 2009).
According to the concluded part, Marriott hotel has capability to expand itself in
developing market with its unique strategy to cater need of premium segment customers
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(Marriott’s Sustainable Hotel Development Boosts, 2015). This strategy will help to increase
customer base because all kind of buyers will be able to access wide range of services that are
provided by hotel. Here, management will focus on cost as well as benefits of proposed strategy.
The cost will be incurred in setting new outlet or changes in the existing services. It will
automatically reduce additional cost and create competitive edge in front of Marriott competitors
like Taj and Hilton hotels. On the other hand, there is a risk behind this strategy because middle
class customers are already targeted by competitors of hotel. This generates need to incur cost on
promotional activities and offering different kind of discount. It leads to attract more buyers and
enables them to access good quality of services provided by organization (Chen, 2010).
Offering services in premium segment will have positive impact on the growth and
success of Marriott hotel because there is demand in luxury services in South Africa. In the same
way, level of competition will be decreased to a great extent. Apart from this, sales turnover of
hotel will also be increased along with brand image at global space. This in turn requirement of
stakeholders will be met effectively and future will be certain for Marriott hotel. Also, present
strategy will help in reducing uncertainties in future business activities (Folsom and et. al.,
2012). This in turn flow of production will be increased and customer satisfaction will be
increased in the same direction. Although, it is not so typical to target premium segment
customers in new market because of the well-known brand name of hotel. Still, hotel needs to
make efforts to provide services in the affordable prices so that they can easily retain buyers for
the longer time span. Overall it can be said that, Marriott hotel will have upward direction by
entering into market. In addition to this, management can adopt effective strategies to determine
sustainable growth in the marketplace with the high market share (Hamilton and Webster, 2015).
RECOMMENDATION
In order to sustain in this competitive environment, there are certain strategic
recommendations for the Marriott International so that they can easily enter in the international
market. As per the above analysis of Ansoff matrix, Marriott International mainly focuses on
market development growth strategies under which Marriott will seek growth through rendering
their existing services in the totally new market so that it can result in increasing and growing
their market share (Cadle, Paul and Turner, 2010). With the existent opportunity that is related to
enter within the South African and Asian market is an effective strategic option that should be
19

focused by Marriott International so that they may expand their activities and business in the
South African and Asian region. In addition to this, there are different challenges that both the
countries that is South Africa and Asia faces. The common challenge is related with environment
that is South Africa is stretches the long coastal line that affect the climate of South Africa thus,
tourist and visitors not prefer to visits the places. However, within Asia region that is Nepal
Marriott International faces challenges related with transportation as the country only have one
international airport.
According to the research it has been assessed that South Africa are considered as the
fastest growing economies. Thus, opening hotel chain in both the economy will be feasible for
the organization. There are different entry modes that can be recommended for Marriott
International so that they can easily enter into the new market without any problem or issue that
are-
1. Strategic alliances- It is one of the effectual strategic options for Marriott International
that can support them to enter into South African and Asian economy. Under this entry
mode, hotel must focus on entering into an agreement with the other organization of the
emerging market so that they may render services with the help of other independent
organization (Cadle, Paul and Turner, 2010). In order to enter in the Asian region that is
in Nepal Marriott International has signed management agreement with the Everest
Hospitality group one of the leading businesses within the Nepal to open the flagship
Marriott Internal in the Kathmandu region by the year 2016. Implication of strategic
alliance to Marriott results in reducing the extra cost of operations as with whom they are
formulating the strategic alliances are already existing within the Nepal. However,
according to Smith (2015) Marriott International will enter into the South Africa by the
next year as they have made an agreement and alliance with the property developers
existing in the South Africa that is Amdec Group so that Marriott can easily expand in the
new region that is South Africa (Smith, 2015). However, another implication of alliance
involves the transfer of technology that supports them to survive in the new market and it
also results in sharing the expenses as well as risk associated in the market (Guay, 2014).
Furthermore, strategic alliance will also benefit Marriott International as they do not have
20

to form new entity as they may collaborate with the existing low budget hotel so that they
may serve the needs and requirement of customers.
2. In order to overcome the transportation challenge within Nepal hotel must tie up with the
airline so that they can increase the number of visitors and travellers to the region. As, the
country have one international airport in Kathmandu that serve as the key aviation centre
for the Nepal. Furthermore, Marriott international also faces challenges within South
Africa hat is related with the high taxation rates. Therefore, Marriott International must
focuses on low pricing or affordable pricing strategies for their leisure and luxurious
services so that they can easily overcome the burden of high tax rate.
3. Setting up new hotel- Another strategic option available for Marriott International is
related to establish a new hotel in the South African and Asian market. Setting up a new
hotel premise in the market is also an impressive option for Marriott as it will support in
directly targeting to the customers (Dudovsky, 2014). In order to sustain within the South
African market, Marriott should focus on effective pricing standard for their services so
that they may target all the segment customers and provide them adequate facilities.
According to Smith (2015) the corporate business strategy of the Marriott International is
that to expand their 82 new hotel in the middle east and African region by the year 2020
(Smith, 2015). therefore, setting up the new option is also beneficial for Marriott
International to successfully expand their hotel in South African region. Here,
organization will lay emphasis on promotional activities as well pricing strategies at the
initial stage. However, market growth and corporate strategy will be applied in order to
give upward direction to business.
21

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