MARRIOTT INTERNATIONAL

Putting Forth Its Own Brands of Hospitality

Corporate Expansion
TTH 10:00 11:30am
Abad, Maria Theresa
Arlante, Clarimelle
Dahunan, Dale Patrick
Gerona, Ma. Corazon
Martinez, Judy Camille
Patino, Jan Prudence
Pinez, Jenniel
Puerto, Dhain Faith
Zamora, Quennie Coleen

I.

CASE NARRATIVE

They began their business venture in 1927 when J. W and Alice Marriott opened
a small root beer stand in Washington D.C and later became as the Hot Shoppe
restaurant which expanded into several branches. Then came the first hotel of Marriott
which opened in Arlington, Virginia in 1957. In 1953 the company went public and J.W
Marriott remained president, succeeded by his son Bill in 1964. Marriott later stripped
off its focus on the restaurant and its flourishing food service business to be able to
concentrate more on developing its lodging business. In 1999, Marriott International was
the largest hotel company in the Fortune magazine ranking of 500 biggest U.S firms and
also one of the most admired Companies in America. On the dimension of branding, the
strategy of Marriott was highly remarkable. They learned how to carefully balance their
strategy by displaying their names on most of their brands except for some which
already acquired and possessed strong, well-known brands. It helped them provide a
dependable level of its service. Marriot is making room for expansion by seeking growth
internationally. It has 350 location over 50 countries and now, the company is looking at
the Europe and Latin America market to further globalize its brand. One thing that made
the company successful is by creating loyalty without reservation by not only focusing
on the customers needs but also their own employees.

I.A.

INTERNAL ANALYSIS
Marriott became one of the best-known brands in the entire world, Employee
turnover and absentee rates go up high because most of Marriotts employees
are hourly workers.

I.B.

EXTERNAL ANALYSIS

PEST ANALYSIS
POLITICAL
ECONOMIC

SOCIAL
Marriotts Western style of management is of great advantage or are of strong
attraction in the three Moscow Marriotts because approximately 80% of their guests are
from United States or Western Europe. Also, Marriott is hoping to further leverage their
global brand name as the Official Lodging Supplier for the 2002 Olympic Winter Games
and for all the U.S Olympic teams. The Olympics will be able to provide opportunity for
Marriott as their new marketing effort to reinforce their growing presence around the
world.
TECHNOLOGICAL
Marriot International operates new products (time-share villas, conference
centers, and corporate housing facilities) in addition to their eight primary hotel brands
which accommodate new types of market such as businessmen and others, instead of
travellers alone. Marriott also launched innovative programs that satisfy its employees
wherein trainings and support are given for them to become productive employees
which in turn Marriott will be benefited. Lastly, lodging industries demand the use of
technologies and systems, which refines, updates, or replace with advance. It also
helps Marriott especially in promoting their products and services through new
technologies.

I.C.

SWOT ANALYSIS

STRENGTH

Marriott family became one of the best-known brands in the entire world.
Marriott International operates and franchises lodging properties that offer

business & pleasure travellers an array of products to choose from.

In year 1999, Marriott International was the largest hotel company in Fortune

magazines ranking of the 500 biggest U.S firms.

Considered as one of the Most Admired Companies in America

WEAKNESS

Employee turnover and absentee rates go up high because most of Marriotts

employees are hourly workers.

Marriotts own dimension of branding strategy creates confusion because some
of their lodging brands dont contain the company name.

OPPORTUNITIES

With their product mix and a number of innovative programs, Marriott can

broaden their customer base and strengthen employee loyalty.

International expansion to any possible locations or key cities.
Marriott International can further leverage its global brand name by sponsoring

events and other key marketing strategies.

Broaden their marketing effort to reinforce their growing presence around the
world.

THREATS

Marriott International has a similar branding strategy as Hilton and Choice Hotels.

Thus, this surely affects Marriotts market share.

Other companies in the hotel industry have also different product mix and
branding strategy that are a threat to Marriott.

II. PORTERS ANALYSIS

1. Rivalry among competitors

The amount of direct competition are mutually dependent. A competitive move by one
firm can be expected to have a noticeable effect on its competitors. Marriot falls
somewhere between Choice and Hilton on this dimension of branding. Even with a
broad mix, Marriot displays its name on most of its hotels although sometimes in a
secondary position

2. Bargaining power of supplier

Suppliers can affect an industry through their ability to raise prices or reduce the quality
of purchased goods and services. A supplier or supplier group is powerful if some of the
following factors apply: - The supplier industry is dominated by a few companies, but it
sells to many - Its product or service is unique or it has built up switching costs Suppliers are able to integrate forward and compete directly with their present
customers
3. Bargaining power of consumer
Buyers affect an industry through their ability to force down prices, bargain for higher
quality or more services and play competitors against each other. At the other end of the
branding spectrum a primary focus on the upscale and midrange markets every
property to compete in the moderate-price segment. A buyer or distributor is powerful if
some of following factors hold true: - A buyer purchases a large proportion of the sellers
product or service. - A buyer has potential to integrate backward by producing the
product itself - Alternative suppliers are plentiful because the product is standard or
undifferentiated - Changing suppliers costs little - The purchased product represents a
high percentage of a buyers costs, thus providing an incentive to shop around for a
lower price.
4. Threats of substitute products
Products that appear to be different but can satisfy the same need as another product.
To the extent that switching costs are low, substitutes may have a strong effect on an
industry.

5. Threats of new entrants

Marriott International was the largest hotel company in fortune magazine's ranking of
the 500 biggest U.S firms. Expanded its hotel business by building a variety of new
properties and by acquiring successful existing chain. The newcomers to an existing
industry. They typically bring new capacity, a desire to gain market share, and
substantial resources. The thread of entry depends on the presence of entry barriers
and the reaction that can be expected from existing competitors. An entry barrier is an
obstruction that makes it difficult for a company to enter an industry. Some of the
possible barriers to entry are the following: - Economies of Scale - Product
differentiation - Capital requirements - Switching costs - Access to distribution channels

III.

PROBLEM IDENTIFICATION

Primary Problem
What is the best growth strategy of the company to implement global expansion in the
Asia Pacific?
IV.

ALTERNATIVE SOLUTIONS

A. Partnership
Is defined as legal relations existing between two or more persons contractually
associated as joint principal on business, this means that the company has easy access
for expansion once Marriott International strategy is to have partnership with the recent
local Company. This will give Marriott International an efficient building business as their
partner knows more the flow of business in the country By it will cultivate and
collaborate owner relationships, leveraging industry-leading resources, offering a
diverse portfolio of world-class brands and delivering exceptional service, Marriott
International will be able to hold fast to our commitment to lead the lodging industry in
the Asia-Pacific region.
B. Branding All
The company has already implemented a branding strategy as Marriot name but
not all. This leads to dilution of most consumers who are not aware of it. It is better to
have branding all company as well as the franchisee, to avoid customers confusion .

Branding All means to have edge on the other competitors. Brand strategy brings you
competitive positioning to life, and works to position you as a certain in the mind of your
prospects and consumer (marketingmo.com) if the Marriot International able to brand
each franchisee or another Marriott International branches then each has the same
digit of revenues. The brand name of the company affects the cost or rate itself as well
as the standard prescribes services that leads to solution their recent debts and easier
for the company to expand in Asia. Branding all gives the company more valuable
compare to the competitors, the one that gives valuable is the one that consumer
remember for.
V.
EVALUATION OF ALTERNATIVES
1. Partnership
Pros
This will give Marriott International an efficient building business as their partner
knows more the flow of business in the country, and they will be able to penetrate in the
market they will easily inter in a new location offering same service.
Cons
This will require more time, location research as well as company research,
because choosing company to be a partner in the business required time to ensure the
quality and success of the partnership.
2. Branding All
Pros
This will remove the customers confusion, and Marriot International able to brand
each franchisee or another Marriott International branches then each has the same digit
of revenues.
Cons
Having the same brand for all Marriott hotel will be a challenge to company to
actually maintain its quality service , they should be commit to offer same service to all
hotels and having the same brand will lost the different market segment, and this
branding strategy is considered to be the hotels key of success.

VI.

RECOMMENDATION
In order for Marriott International to implement global expansion in the Asia

Pacific, we recommend partnership with the top local companies in Asia. The company
already blanketed the US market and they are slowly paving its way to penetrate
Europe and Latin America. No doubt, the company has already taken over the US.
While Europe had over 95 Marriott hotels in the area and 9 countries out of 26 in Latin
America was dominated by the company. But there is a doubt of its dominance in Asia
Pacific. True, they already have hotels around the continent but their expansion is not
quite acknowledge. It might be due to numerous competitors which are hard to
overpower or it might be because their growth strategy is not quite commendable.
Through partnership with top local companies in Asia, it can guarantee Marriott
International the advantage of penetrating the continent, particularly the Asia Pacific
market which typically includes much of East Asia, South Asia, and Southeast Asia.
Solution B is not that essential compared to A because their branding strategy is also an
advantage of the company. Even if the lesser brands might detract the image of the
company, they wont worry about it. In short, the advantage of their branding strategy
outweighs its cons because it has contributed to their success. So, solution A is much
important to undertake than B.
VII.

ACTION PLAN

WHAT

Partnership

WHO

WHEN

Marriot

As

Internationa

possible

and

early

top because

HOW

as Marriot needs partners around Asia

Pacific in order to pave its way to
it comprehensive global expansion.

local

requires a lot of First

companies

preparation like partnership is making a connection and

in
Pacific

step

to

successful

strategic

Asia looking for the designating a point of contract towards

possible

abled parties. Communicating with one another

partners

that and knowing each others goals must be

can be of much the first step in order to have a

great help to the harmonious journey towards their goals.
global

Second is understanding each others

expansion of the needs and capabilities so that they may

company.

know each others limits.

Third, they must agree on the resources
needed and the span of partnership.
They need to know how long they will be
willing to commit with each other. If it
would

be

long-term

partnership,

determining the resources needed to

sustain their partnership is essential.
Last is to prove each others value by
showing it within the company. Knowing
that they can depend on one another
can help retain long-term partnership.
Trust is essential to make Marriot
successful in expanding with the help of
other companies.

FEEDBACK AND CONTROL

Partnership enables business to gain competitive advantage by using each
others resources, including markets, technologies, capital and people. In order to be
successful in retaining it, Marriott International and its partner/s should remain persistent
in achieving both of their goals. They might have one goal or goals of both but
persistence to achieve it is also a goal to attain and retain. Communication is a key in
maintaining their trust because without trust, they would fall. They should remain

building on their existing partnership. Once Marriott International has successfully link
up with the partner company, they must not rush in finding a next partner because it
might create conflicts and confusions. As long as the flow of partnership with each other
is good, and it made a great advantage to them, staying loyal to their partner and
staying focus on attaining their goals must be considered.