Analysis of Starwood Hotels Strategic Decisions: A Business Report

This report provides a comprehensive analysis of the strategic and non-strategic decisions made by Starwood Hotels, focusing on their global operations and challenges. The report examines key strategic decisions, such as mergers and acquisitions, specifically the Hyatt Hotels merger, and their implications from a financial perspective. It delves into non-strategic decisions, including HR-related choices and marketing strategies, highlighting their importance in facilitating overall strategic goals. The report also includes SWOT and PESTL analyses to assess the internal strengths and weaknesses, as well as the external political, economic, social, technological, and legislative factors influencing Starwood's business environment. Through this analysis, the report aims to provide insights into how Starwood manages risks, addresses environmental issues, and overcomes financial and human resource management challenges.

Introduction
Starwood is international firm because it
engages in activities outside the borders of its
home country.
Strategic and non-strategic decisions taken
by management in different situations have
been explored for the purpose of grasping
business and market opportunities in a
significant manner

Background and Case study of firm
 The UK based enterprise has global portfolio
of luxury hotels and resorts in 80 countries. It
shows that it has worldwide presence.
The major challenges for firm is to grasp
advantage from merger and acquisition
activity with Hyatt through reducing human
resource management related challenge.
This decision can be considered as non-
strategic decision taken.

STRATEGIC DECISIONS
According to Hunger and Wheelen (2011) strategic decision
deals with the long-run future of the entire firm and rare,
directive and consequential are the three major characteristics
of decision making (Hunger and Wheelen, 2011).
Michael, Duane and Robert (2004) described strategic term
definition in term of decisions which are concerned with the
whole environment in which firm operates can be defined as
strategic decision (Michael, Duane and Robert, 2004).
Jones (2009) defined that strategic decision in the context of
providing opportunity to company to build mission and
objectives and deciding upon the courses of action to attain
them within stipulated time (Jones, 2009).

Example of strategic decision
Strategic decisions for mergers
At financial perspective with help of taking merger
example between Hyatt Hotels and Starwood,
implementation of non-strategic decision taken by top
management of Starwood can be understood in a
significant manner.

NON- STRATEGIC DECISIONS
Blumentritt (2006) defined that administrative and
operational decisions which are taken by management to
facilitate strategic decision can be referred as non-strategic
decisions.
Richard and Brian (2001) explored that non-strategic
decisions are normally short term decisions related to
working of employees in an organization.
As per the present case scenario, management of firm was
taken marketing as non-strategic decisions to overcome
current issues faced by enterprise at the workplace.

Example of non-strategic decision
HR related decisions
Strategic decision taken by firm regarding to conduct
performance reviews and configurable user assistance
integrated with the user interface, success of non-strategic
decisions helpful for organization (Commonwealth
Secretariat, 2003).

SWOT Analysis

PESTL analysis

STRATEGIC DECISIONS
 At financial perspective with help of taking merger example between Hyatt
Hotels and Starwood, implementation of non-strategic decision taken by top
management of Starwood can be understood in a significant manner.
 Hyatt Hotels acquiring Starwood in cash and stock deal and in this regard,
management of firm has taken initiative to sell its assets.
 With help of this merger activity, management of Hyatt group was able to
enhance its offering in both managed hotels and owned hotels (Debrah,
2013).

CONTD.
When this decision analysis on financial aspects then it is
found that cash balance of Starwood by end of Q2 was less
than $1 billion and debt around $2 billion.
 On the other side, overall market capitalization of Starwood is
$13 billion and Hyatt’s is around $7 billion. Hence, it can be
said that Starwood is falling in financial aspect and failed to
take more advantages as compare to Hyatt in form of a cash
and stock deal.

PESTL Analysis
Political environment and legislative
related issues
Social and cultural factors
Myriad of security and compliance
requirements related technology issues

Conclusion
Through identifying risks and taking appropriate
strategies risks to overcome those challenges,
management of firm can be able to solve environmental
issues, human resource management and financial
challenges faced by organization at workplace.

References
 Sustainability Programs & Initiatives. 2015. [Online]. Available through
<http://www.starwoodhotels.com/corporate/about/citizenship/sustainability/
programs.html?language=en_US> [Accessed on 29th Oct 2015].
 Team, T., 2015. Why It Makes Sense For A Hyatt-Starwood Merger?. [Online].
Available through: <http://www.forbes.com/sites/greatspeculations/2015/10/30/why-it-
makes-sense-for-a-hyatt-starwood-merger/>. [Accessed on 2nd November 2015].
 Sophie, H., and Olivier, H., 2013. HRM practices and low occupational status older
workers. ,Employee Relations. 35 (3). PP.339 – 355.
 Steiss,W.R.,2005. Strategic Facilities Planning: Capital Budgeting and Debt
Administration. Lexington Books.