Business Strategy Report: An Analysis of Marriott International

This report offers a comprehensive analysis of Marriott International's business strategy, starting with an executive summary and introduction to the company's background, business model, and mission, vision, and strategies. It delves into the micro and macro environments, utilizing Porter's Five Forces and a PESTLE analysis to assess the competitive landscape and external factors influencing the company. A financial analysis, including profit, liquidity, and shareholder ratios, is presented to evaluate Marriott's performance. Furthermore, a TOWS analysis is conducted to identify strategic options. The report concludes with key findings and recommendations, providing a holistic view of Marriott's position and future prospects within the hospitality industry.

Business Strategy

Executive Summary
Present document has showed different kinds of theories that has helped Marriott
International in maintaining both internal and external business environment so that to sustain
within the market for a longer period of time. Including this, Marriott Internationals would
require to consider their various resources so that they could effectively develop number of
strategies so that to it could sustain within the competitive business environment. Based on the
information. it is much needed for Marriott Internationals to find out the number of gaps so that
they could effectively create number of goals and objectives for themselves. Including this, it is
said that it will be pretty much important for Marriott International to keep on updating their
financial statements as this would help investors in looking at the situation that if it is right to
invest within the company or not. At present, it has showed that yes it will be beneficial for
investors to invest within the company as it can deliver effective returns on investments.

Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................1
Company's Background..........................................................................................................1
Business Model......................................................................................................................2
Mission, Vision and Strategies...............................................................................................3
Micro Environment..........................................................................................................................4
Porter Five (5) Forces.............................................................................................................4
Macro Environment.........................................................................................................................5
PESTLE analysis of Marriott.................................................................................................5
Financial analysis.............................................................................................................................7
Profit ratios.............................................................................................................................8
Liquidity ratio.........................................................................................................................9
Shareholders ratio.................................................................................................................11
TWOS............................................................................................................................................13
TOWS analysis of Marriott .................................................................................................13
Conclusion.....................................................................................................................................15
References......................................................................................................................................17

Introduction
This report is based upon amount of competitive actions, which are efficaciously be used
by Marriott International to achieve enviable goals and objectives in specific time frame. There
are other essential elements which are crucial in this report are business plan along with the
mission and vision of the company that would lead a company like Marriott International. This
would lead investors to attain or grab the information in relation to what exactly the situation
company is holding (Brewster, C., 2017). Apart from this, the organisation that has been taken
into consideration within this report i.e. Marriott International. Away with this, report is going to
be enclosed with company's background and its strategic directions. Including this, report will
also keep it's focus on financial performance level and lastly, critical evaluation is also going to
be presented in regards to responsibilities that the company carries in respect of operational
practices.
Company's Background
Marriott International, a world famous hospitality organisation dealing at international
and national level, where it manages and franchises a broad portfolio of various hotels that offers
quality lodging facilities (We Are Marriott International. 2019). At initial level, company has
started itself with a name of A&W root beer, which was stand at Washington, D.C. This
company was specifically started in the form of small business and in present, Marriott
International is holding the third position among the largest hotel chains in all over the world.
Apart from this, hotel business organisation is having around 30 brands considering over 7,003
properties among 131 different nations. Moreover, as of March 31st, 2019 firm is having
approximately 1,332,826 rooms, where 2,035 have been built to manage around 559,569 rooms
(Leonidou and et. al., 2017).
If it is talked about Marriott Internationals history then in the year of 1927, both J.
Willard Marriott and Alice Marriott got married and launched their first A&W franchise
considering a menu with number of blistering food items. This has helped them in giving named
to their shop as Hot Shoppes. Including this, just when both of them has started gaining enough
profit, which made them to think over launching two more Hot Shoppes. In the year of 1937,
company has started dealing in food delivering sector, where company started offering
passengers with boxed lunches(Shuen, 2018). Apart from that, in the year of 1953, Hot Shoppes'
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shares started to become public in nature, where it was sold in the amount of $10.25/share. Just
when, Hot Shoppes reached to it's highest successful level, this is where both the owners has
decided to shift into hotel industry, to enhance the profit margins and this has been done in the
year of 1957 and it was particularly managed by Bill, who is the son of J. Willard Marriott.
Basically, the hotel has built first motor hotel at Virginia (Moseley III, 2017).
In 2012, President and CEO of Marriott International who became was Arne Sorenson
considering the number of acquiring Gaylord Hotels Brand which resulted in adding five hotels
and a meeting along with the event space of around 2 million square feet. Through this,
organisation has reached to a good position within the international market. Along with this, in
2015 and in 2016, Marriott has performed the acquisition with the hotel chain named as Protea
Hotels' Brands and with Delta Hotels. This made Marriott to become a successful hotel chain in
all over the world, where company has become the largest full-service hotelier in all over
Canada, where it has earned high amount of profit margins and so on (Prashar, A., 2018).
Business Model
Key Partners Key Activities Value
Propositions
Customer
Relationships
Customer
Segments
 Franchises
 Subsidiari
es
 Luxury
and
Premium
 Resorts
and Hotel
Managem
ent
 Online
Booking
 Marriott
is said to
one of
the finest
hoteliers
in all
 On Site
Locating
 Website
 Different
types of
assistance
 Focus over
business
customers
 Accommo
dative
facilitaties
2
Illustration 1:
Marriott International Reports First Quarter 2018 Results

brands
 Investors
 Luxury
Activities
over the
world.
 Marriott
Rewards
 Various
programs
in relation
to customer
loyalty
Key Resources Channels
 6000
hotels in
120
Countries
 Brand and
Luxury
Market
 Online
booking
 Travel
agents
 3rd Party
booking
(Online)
Cost Structure Revenue Streams
 Brand
 Image
 Standards
 Employees Salaries
 Additional Services
 Booking
 Application Fee
Mission, Vision and Strategies
Vision : "To be the World's Favourite travel Company'' (Frequently Asked Questions,
2020)
Mission : To raise the standards of living of customers through offering them with
luxurious leisure experience (Marriott Mission Statement Analysis and Vision, 2019).
Cultural Strategy followed by Marriott International : Basically, the famous hotel
believes in taking care of their associates because they think that offering staff with zero
discriminative environment would help them in serving best to the customers.
Competitors : Holiday Inn, Intercontinental, Hilton, Candle Wood, and many more are
said to be some of the crucial competitors that Marriott International is having, that are giving
good rivalry at international market.
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Micro Environment
Porter Five (5) Forces
Threat of New Entrants – In present context, new entrance within Lodging industry
brings advancement, better approaches for getting things done and put pressure on Marriott
International, Inc. through lower evaluating system, diminishing expenses, and giving new offers
to the clients (Marriott International, Inc. Porter Five Forces Analysis. 2019). Therefore, it can
easily be said that for Marriott International, Inc. within Lodging industry faces high force from
new entrance and this develops powerful obstructions to defend its competitive side within the
international market.
Bargaining Power of Suppliers – In the Lodging industry, many suppliers are available
and various hotels purchases their raw material from numerous suppliers. Including this, it is also
said that suppliers under this industry holding the dominant position can decrease the margins
Marriott International, Inc. can earn in the market. Powerful suppliers in Services sector use their
negotiating power to extract higher prices from the firms in Lodging field. The overall impact of
higher supplier bargaining power is that it lowers the overall profitability of Lodging.
Bargaining Power of Buyers – Buyers are often a demanding lot. They want to buy the
best offerings available by paying the minimum price as possible. This put pressure on Marriott
International, Inc. profitability in the long run. The smaller and more powerful the customer base
is of Marriott International, Inc. the higher the bargaining power of the customers and higher
their ability to seek increasing discounts and offers.
Threat from Substitute Products - New participants in Lodging brings advancement,
better approaches for getting things done and put pressure on Marriott International, Inc. through
lower evaluating procedure, lessening costs, and giving new incentives to the clients (Chen and
Jermias, 2014). Marriott International, Inc. needs to deal with every one of these difficulties and
fabricate compelling obstructions to defend its focused edge.
Rivalry among the existing players – If the rivalry among the existing players in Lodging
industry is intense then it will drive down prices and reduced all the profitability within the
industry. Marriott International, Inc. operates in a very competitive Lodging industry. This
competition does take toll on the overall long term profitability of the organization.
4

Macro Environment
PESTLE analysis of Marriott
The PESTLE analysis of Marriott helps in analysing the brand on the basis of business
tactics. The various factors of PESTLE that affects the functioning of this company. These
factors in comparison with Hilton Hotel are mentioned below -
Factors Marriott Hilton
Political factors This company has presence
over 130 countries across the
world. This company has
expanded it's business in
politically stable countries like
Mali, Ukraine, Finland, New
Zealand, etc.
Hilton worldwide actively
engages in lobbying for
influencing political factors
(Cavusgil and et. al., 2014).
Economical factors The fluctuations within the
currency have huge impact on
the performance of Marriott.
This hotel provides premium
and luxury services and it can
face decline in revenues in
case of economic slowdown.
The major factors on which
Hilton hotels and resort
business is affected are
international and national
macroeconomic situations.
Social factors Marriott provides a loyalty
program naming “Marriott
Bonvoy” that aims for
providing customers with free
hotel stays and additional
discounts.
The differences in educational
background between the
marketers and the target
market may make it difficult to
relate to and draw in the target
market effectively (Chang,
2016).
Technological factors The booking of Hilton is done
through indirect booking
The impact of the technology
on the costs that most
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channels and this can increase
overall cost. This hotel focuses
on technological advancement
as it reduces operational costs.
companies in the industry are
subject to have the potential to
increase or reduce the resulting
profits greatly
Environmental factors Marriott is claimed to abide by
various environmental laws
and regulations that are
prevailing in countries where it
is operating (PESTLE Analysis
of Marriott International.
2019).
When Hilton is contributing
to the further endangerment of
an already endangered species
then it may face consequences
from the law and a backlash
from the general public who
can boycott Hilton in
retaliation.
Legal factors There was case with Marriott
in 2018 where information of
customers was leaked
(Marriott PESTLE Analysis,
2019). After this issue this
company is making efforts to
retain customer's trust and
loyalty.
Discrimination laws are placed
by the government to protect
the employees and ensure that
everyone in Hilton (Chen and
Jermias, 2014).
Current situation of Marriott International and strategic directions
In present time, Marriott International is holding a particular mission to consider the
futuristic shape of every single approach in regards to technology and innovation (Krause, 2015).
Away with this, it is also said that company is carrying a much more inventive approach, which
may aid company in sustaining within the market through offering customers with right amount
of quality based services (Santos, Murmura and Bravi, 2018). In accordance to this, Marriott
international started once with a nine-seat stand shop named as A&W root beer and now, it is
being considered as one of the topmost employer in all over the world. Along with this, at the
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moment Marriott is continuously helping itself to earn high range of profits through considering
five core values and these are : pursue excellence, put people first, serve the world with quality,
act with integrity and embrace change. This has brought company in present to a place where
more than 30 brands are effectively working in all over the world as Marriott's subsidiaries
(Peng, 2017).
Will the financial performance of the company give the investor a good return
If it is talked about, fiscal performance then it is one of the most important aspect that
helps an organisation to take appropriate decisions in regards to gaining a good position within
the market and so on (Lawton, 2017). Along with this, considering the above information it can
easily be said that Yes, it will be very much beneficial for the investors to invest a good amount
of money because, considering the mission, vision, cultural strategy and different directions, that
company is following Marriott International might become one of the leading hoteliers in all
over the world.
Financial analysis
P&L STATEMENT:
MARRIOTT INTERNATIONAL INC CLASS A (MAR), INCOME STATEMENT, PROFIT &
LOSS STATEMENT
Fiscal year
ends in
December.
USD in
millions
except per
share data. 2014 2015 2016 2017 2018
Revenue 13796 14486 17072 22894 20758
Cost of
revenue 11830 12363 14446 19192 17084
Gross profit 1966 2123 2626 3702 3674
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Operating
expenses
Sales,
General and
administrati
ve 505 600 704 894 927
Restructurin
g, merger
and
acquisition 245 135 386 159 155
Other
operating
expenses 115 200 -218 131 71
Total
operating
expenses 698 796 872 1184 1153
Operating
income 1159 1350 1754 2518 2521
Interest
Expense 115 167 234 288 340
Other
income
(expense) 212 432 -336 606 164
Income
before taxes 964 1234 1184 2836 2345
Provision
for income
taxes 242 395 404 1464 438
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Net income
from
continuing
operations 753 859 780 1372 1907
Net income 753 859 780 1372 1907
Net income
available to
common
shareholder
s 753 859 780 1372 1907
Earnings
per share
Basic 2 2.66 2.68 3.66 5.45
Diluted 2.64 3.61 5.38
Weighted
average
shares
outstanding
Basic 291 219 291 375 375
Diluted 291 300 296 380 375
EBITDA 1256 1356 1586 3414 2969
'
In present context, if evaluation of the overall performance level of Marriott takes place,
then it will directly aid the business organisation to look into the interested area of investors, as
this stays enclosed with number of elements and these are presented underneath:
Basically, considering the above mentioned P&L account's information then the revenue
which was generated by Marriott International in the year of 2016 was 17072 Million Dollars, in
2017 it was 22894 and lastly, 20758 was the amount. On the other hand, if a comparison would
take place of the three years of gross profit, then the company has made $3674 Million (2018),
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