Analysis of Strategic Management Issues at Marriott International

This report analyzes the strategic management challenges facing Marriott International in the context of globalization. It identifies key issues such as employee management, the impact of technology, increasing competition, and economic uncertainties. The report examines the complexities of...Read More

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INSTITUTIONAL AFFILIATION(S)
STRATEGIC MANAGEMENT

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Table of Contents
Executive Summary....................................................................................................................2
1. Introduction.........................................................................................................................3
2. Overview of the company...................................................................................................3
3. Findings/Issues faced by Marriott.......................................................................................4
3.1 Managing employees........................................................................................................4
3.2. Rising technology demand...........................................................................................4
3.3. Managing competition and economic uncertainty......................................................5
4. Conclusion..........................................................................................................................6
5. Recommendations...............................................................................................................6
5.1. Effective workforce management....................................................................................6
5.2. Sustainability...............................................................................................................6
5.3. Focussing upon new technologies...............................................................................7
References..................................................................................................................................8
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Executive Summary
The influence of globalization has been well recorded in research and theories related
to the tourism and hospitality business. Some of the important characteristics of globalization
that influence the development of the hospitality industry include technological
advancements, open borders, employment opportunities, among several others. The flagship
Marriott brand operates in hotels and resorts business and shares a large market in the United
States. In addition to hotels and resorts management, the firm also sponsors business
traveling and leisurely products including widespread and popular Courtyard brand which is
spread in more than 800 locations worldwide. The aim behind preparing this report is to
analyse the impact of globalization in Marriott's business and how the firm can enhance the
sustainability of its management.
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GLOBALIZATION ISSUES IMPACTING MARRIOTT INTERNATIONAL INC.
MANAGEMENT
1. Introduction
While some of the authors claim that hospitality industry is one of the various examples
which shows globalization is visible as people are given chance to spend their free time in
new places, companies feel that globalization has influenced their business structure
significantly (Čerović, Vukadinović, & Knežević, 2015). Global trends and issues are
changing the strategic management style of business. The hotels which can adapt to changing
technology, demographics and economy are the ones who achieve success (Zaitseva,
Larionova, Yumatov, Korsunova, & Dmitrieva, 2016). This shows how globalization has
made the hospitality industry prone to global changes and ever-changing industry demand. A
similar issue is faced by Marriott while operating in a global business environment and
hence, this report will discuss major issues faced by the strategic management of the
company due to globalization.
2. Overview of the company
Marriott International, Inc. is one of the most recognized chain of hotels worldwide dedicated
to franchising and operating lodging and hotel facilities. Since 1927, the Marriott family has
shown immense dedication to serve as a hotelier starting from a beer stand and now holds
more than 500 facilities worldwide (Marriott International, 2018). The very first hotel of
Marriott was near Washington Dc, named Key Bridge Marriot. The hotel was quite small and
always remained out of date due to high demand occupancy and nearness to the city. rom
then, the company grew as a leading chain of hotels. On 8th October 1993, Marriott
International was registered as a substitute for Host Marriott Corporation which formed for
franchising and managing hotels worldwide. The headquarters of the firm is closely situated
near Bethesda, MD which oversees around 16 brands globally (Renner, 2010).
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3. Findings/Issues faced by Marriott
3.1 Managing employees
Marriott business plays a critical role in making the firm capable enough to meet
environmental, social and economic demands. With more than 6000 properties spread
globally in around 120 nations, Marriott has to address every global responsibility and unique
employment opportunity related factors (Marriott International, 2017). Challenges faced by
the hospitality and tourism industry regarding employment, human resources or workforce
management have been well cited in the literature. Aynalem, Birhanu, & Tesefay (2016)
argues that hospitality and tourism companies provide employment opportunities in various
fields such as attraction sites, accommodations, and transportation. Hence, the requirement of
a skilled and talented workforce becomes a critical factor for ensuring a smooth flow of work.
But, constraints of employment within the hospitality sector remains challenging for most
of the firms. The key issue includes low job statuses, unstable employment, lengthy work
hours, seasonal jobs, etc. This, in turn, adds to the consequences for the firm while recruiting
and selecting suitable employees along with facing increased staff turnover and hefty costs
due to increased labor turnover. In October 2018, more than 7,700 employees working in
United States hotels of Marriott presented their dissatisfaction with the human resources of
the firm by initiating a strike. According to the employees working particularly in
Massachusetts and California reported that the work conditions issues faced by the employees
are not only for Marriott but for the general hospitality industry. The issues raised against the
firm included low salary packages, unsatisfactory work conditions and discontinued support
from the management (Deanna Ting, 2018).
3.2. Rising technology demand
The future of the hospitality business highly depends on how effectively the management
shapes its operation according to the current Internet of Things technology. Therefore,
Kansakar, Munir, & Shabani (2018) states that hospitality firms must stay ahead on IoT
technology to achieve a competitive edge in the market. Digitization of hospitality services,
on the other hand, helps push hospitality services to meet touchpoints of the guests through
the strategic digital business model. However, the annual reports of Marriott state that the
company faces issues especially due to new sophisticated systems and technologies which
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challenge their revenue management, reservation, human resources, property management as
well as payroll and loyalty programs for customers.
Increased cybersecurity incidents have made adverse impacts on Marriott’s business.
Data security incidents have become very common and the firm faces several issues related to
cybersecurity. Furthermore, global cybersecurity attacks and threats impacts decision making
process in management. Due to increased globalization and business being spread in more
than 120 countries, Marriott remains exposed to risks and costs related to protecting the
security and integrity of the firm's associates and guest data including credit card details and
personal information shared. Different countries follow different regulations and policies that
further make protecting guests information very critical and if any data remains incomplete or
inaccurate, the management tends to make faulty decisions (Marriott International, 2018).
3.3. Managing competition and economic uncertainty
Tourism and hospitality are an ever-growing business and seek perfect accommodations
equipped with the latest itinerates. With high demands seen in accommodations, the
competition also remains apparent as several hotels can be seen in almost every prime
location of major countries, particularly those which have tourist spots. This makes many
companies consider a reduction in rates or provide enhanced services in reduced prices to
remain competitive in the market (Nain, 2018). Marriott operates not only under the hotel
management model but also accompanies owned, leased and franchise models like residential
units and vacation ownerships.
High competition in the hotel industry influences Marriott's' business management
critically particularly the local brands. Some of the major competitors of the firm include
Hyatt Hotels, Starwood Hotels and Resorts, Hilton Worldwide Holdings and Wyndham
Worldwide Corporation that operates within a similar industry (Matthews, 2016). Other than
this, economic downturns impact financial growth and results. Any weaker condition
occurring in any of the parts of the world or changes in prices of currency and oil can incur
global crises that might impact the traveling business. One of the recent global crises that
have impacted the firm’s sales negatively is the COVID-19 outbreak. According to the firm’s
CEO, "As the virus and efforts to contain it have spread around the world, demand at our
hotels has dropped significantly." (Bowman, 2020) Such uncertainties make Marriott
experience weakened demands in several markets and have reduced profitability.
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4. Conclusion
Global trends and challenges have changed the strategic management style of tourism and
hospitality businesses as well. After analysing strategic management issues in Marriott hotels,
it can be said that the firm faces issues related to globalization particularly challenges in
employee management, technological advancements, increased competition and economic
uncertainties in the country Marriott operates. The report recommends Marriott to consider
effective employee management techniques, sustainability practices along with enabling new
technology such as virtual and augmented reality. Since globalization has influenced many
companies in all most every sector, only smart hotels that consider the below-recommended
factors will survive.
5. Recommendations
5.1. Effective workforce management
To ensure that Marriott has an effective workforce, the firm's management must show
devotion towards building a participative and democratic culture where human resources
emphasis on fostering customer relationship as well as an employment relationship. This can
be done by employing effective reward management practices, quality management,
strengthening the relationship with educational institutions to remain aware of current global
trends and gear business practices according to contemporary business demands. Training
and development can further assist Marriott’s employees while dealing with uncertain issues
and over-arching industry demands (Aynalem, Birhanu, & Tesefay, 2016).
5.2. Sustainability
Sustainability is one factor that is being considered by many global firms due to the growing
interest of the public concerning the environment. Smart hoteliers need to comprehend that
corporate responsibility practices not only make customers feel good about the firm but also
increase chances of global recognition and new country entrance. In this sense, Marriott can
implement sustainability strategies that can work on cost reduction and energy consumptions
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such as using solar energy for electricity or consideration of wastewater management plans,
reduction in food wastage, etc.
5.3. Focussing upon new technologies
Since Marriott operates in a franchise model along with residential ownership and leased
properties, it needs to adopt the latest online technology like virtual and augmented reality.
VR and AR provide an interactive and powerful visual experience that can fulfill many
purposes for Marriott. By showing tourist destinations and attractive locations to its
customers, Marriott marketing management can increase sales and profitability. To support
management of dispersed properties, Marriott can use VR and AR to manage operational and
functional activities. The advanced AR can potentially create a blueprint that will allow all its
investors and stakeholders to get a look at the results. Regarding employee's training and
development about new skills, VR can provide interactive assistance cost-effectively and
flexibly (Nayyar, Mahapatra, Le, & Suseendran, 2018).
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References
Aynalem, S., Birhanu, K., & Tesefay, S. (2016). Employment Opportunities and Challenges
in Tourism and Hospitality. Journal of Tourism & Hospitality, 5(6), 1-5.
Bowman, J. (2020). Why Marriott International Stock Lost 40% in March. Retrieved from
https://www.fool.com/investing/2020/04/03/why-marriott-international-lost.aspx
Čerović, S., Vukadinović, P., & Knežević, M. (2015). The Influence of Globalization on
Tourism and Impact of Tourism on Other Activities with an Emphasis on Greenfield's
Investments in Tourism. Retrieved from
esearchgate.net/publication/301416882_THE_INFLUENCE_OF_GLOBALIZATION
_ON_TOURISM_AND_IMPACT_OF_TOURISM_ON_OTHER_ACTIVITIES_WI
TH_AN_EMPHASIS_ON_GREENFIELD_INVESTMENTS_IN_TOURISM
Deanna Ting, S. (2018). How Big a Problem Are the Growing Worker Strikes for Marriott?
Retrieved from https://skift.com/2018/10/16/how-big-a-problem-are-the-growing-
worker-strikes-for-marriott/
Kansakar, P., Munir, A., & Shabani, N. (2018). Technology in the Hospitality Industry:
Prospects and Challenges. Retrieved from https://arxiv.org/pdf/1709.00105.pdf
Marriott International. (2017). Sustainability and Social Impacts Highlights. Retrieved from
http://serve360.marriott.com/wp-content/uploads/2017/10/2017_Sustainability_and_S
ocial_Impact_Highlights.pdf
Marriott International. (2018). Marriott International, Inc.: 2018 Annual Report. Retrieved
from
http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_MAR_20
18.pdf
Matthews, S. (2016). Sizing up Marriott International’s Competition in a Tough Industry.
Retrieved from https://marketrealist.com/2016/01/sizing-marriott-internationals-
competition-tough-industry/
Nain, A. (2018). A Study on Major Challenges Faced by the Hotel Industry Globally.
International Journal of Creative Research Thoughts, 6(1), 561-571.
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Nayyar, A., Mahapatra, B., Le, D., & Suseendran, G. (2018). Virtual Reality (VR) &
Augmented Reality (AR) technologies for tourism and hospitality industry.
International Journal of Engineering & Technology, 7(2), 156-160.
Renner, L. (2010). Strategic Analysis of Marriott International, Inc. Retrieved from
https://dra.american.edu/islandora/object/0910capstones:145/datastream/PDF/view
Zaitseva, N. A., Larionova, A. A., Yumatov, K. V., Korsunova, N. M., & Dmitrieva, N. V.
(2016). Assessment of the Impact of Globalization on the Introduction of Innovative
Technology Companies in the Hospitality Industry. International Journal of
Environmental & Science Education, 11(14), 7176-7185.
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