The Marriott International is a global chain of hotels and lodging facilities which was first established in the year 1927. The first hotel was established in Washington DC, and since then it has expanded its horizons to the rest of the world. In Australia and other parts of the world, the Marriott International is reputed to be one of the most well known and preferred hotels four tourists. The flagship brand has its hotels and resorts in more than five hundred locations around the world, while simultaneously holding a majority of the market share in United States.
The brand is commonly associated with luxury and opulence. However, the chain has now begun to introduce its range of affordable and mid range facilities which appeal to middle class travelers. Despite the global economic crises and the unsuitable market conditions at present, the Marriott chain continues to dominate the international hospitality market. This is mainly because the brand caters to the unique needs and demands of the average tourist. The company led by Bill Marriott has been a forerunner in the industry for well over fifty years and has a motto of “spirit to serve”. This highlights the customer oriented strategy of the hotel.
As a part of the hospitality industry, it ensures that every expectation of the customer is met. This has now come to be known as the Marriott way (Marriott.com, 2018). This refers to the hotel’s sense of responsibility towards its stakeholders, associates, the customers and the community as a whole. The following critical analysis studies the internal environment of the hotel, focusing mainly on guest experience, operations and competitive advantage. Porter’s five forces and a S.W.O.T analysis would be applied to study the various internal and external issues plaguing the hotel.
Research aims
The purpose of this research is to carry out an independent critical analysis of the Marriott International. The report would mainly focus on the internal environment of the hotel, with respect to guest experience, hotel operations and competitive positioning.
Research objectives
While speaking of the internal environment of the hotel, there are largely three aspects that must be taken into account. They are – hotel operations or the quality of customer service delivered to the guests, the perception of the guests based on their experience and the competitive positioning of the hotel.
Guest experience or the perception of the guests staying at the hotel
According to Xiang, Schwartz, Gerdes and Ulysal (2015), the core tenets of the hospitality industry would be a positive experience for the guests. In fact, that is considered to be the sole purpose of the industry itself. However, Jauhari and Bharwani (2015) believe that the main reason why hotels ensure maximum customer satisfaction is to gain customer loyalty and at the same time ensure competitive advantage. Every firm across the world, including the hospitality industry, has recognized the importance of positive guest or customer experience. Customers today are powered by technology and expect tailor made or customized customer service which would meet their unique demands and needs (Levy et al., 2014).
Hotels like Marriott and other global hotel chains are focused on delivering exemplary customer service both online and offline. As a matter of fact, a new term, customer experience management or guest experience management has emerged, which deals exclusively with the quality of service delivered to the customer.
According to Manhas and Tukamushaba (2015), customers or guests are the main reasons why hotels even exist in the first place. Thus to ensure a positive brand image, the hotel should strive to focus their business strategies and mission on the customer (Torres & Kline, 2013). Ariffin (2013) argues this perspective and says that customer experience, though extremely important, is not the sole determinant of a firm’s competitive positioning. Instead, a positive guest experience would improve the market performance of the hotel (Verleye, 2015). The experience of a guest is all encompassing, and begins from the moment a person books a room at the hotel.
It includes preconsumption, consumption and post consumption of hotel services (Kandampully & Solnet, 2015). In other words, guest experience would take into account every single interaction that the guest has at the hotel. It would be wrong to assume that guest experience of a customer relies solely on accommodation facilities, entertainment, food and beverages and other such amenities. Instead, little things like technology, website, in room entertainment, facility designs and interactions with the hotel employees play a crucial role in determining guest experience (Li, Ye & Law, 2013).
Suffice to say, customer or guest experience at a hotel is elusive and quite indistinct in nature and cannot be defined easily. This is mainly because it includes a number of minor and insignificant aspects, which together would contribute to a positive experience for the customer (Jani & Han, 2014). It must be realized that each guest is unique and it would be unfair to generalize them. Very often, they come from different cultural backgrounds, beliefs, attitudes and traditions which affect their perception of the hotel experience. While visiting a hotel, they would have a unique set of demands and expectations which must be fulfilled.
Buhalis and Amaranggana (2015) even claimed that in order to understand guest experience, one would have to gain insight into the internal feelings of the customer which would impact their perception of the hotel. The service delivery process in a hotel could either be direct or indirect; it would be the onus of the hotel to make sure that all processes pertaining to delivery of service is optimized (Rao & Sahu, 2013). Moreover, the construct of service delivery and customer experience should involve the guests’ emotional, social, physical, social, cognitive and behavioral responses to pave the way for a wholesome guest experience.
Hotel operations or hotel performance management
According to Schuckert, Liu and Law (2015), the business environment in the hospitality industry is highly competitive today. These authors have claimed that the increasing pressure of stakeholders and the ever changing circumstances have put more pressure on hotels to incorporate hotel performance management as part of their business strategy. Hotel performance management has now become one of the most important tools in hotel operations which would be necessary while determining the business strategy of a hotel and its competitive positioning.
Berezan, Raab, Yoo and Love (2013) have argued that management of hotel performance would be instrumental in determining the market position of the hotel and at the same time maximizing customer satisfaction. However, Pnevmatikoudi and Stavrinoudis (2016) are of the opinion that measurement of the performance of a hotel would be more important. A system which effectively measures the performance of a hotel would highlight its key strengths and weaknesses and even point out room for improvement (Alrawashdeh & Alrawashdeh, 2014). This would further enhance the competitive brand positioning of the hotel.
Sipe (2016) argues that the operations of a hotel should be designed in such a way that it contributes to customer satisfaction. For instance, front desk employees are the first point of contact for the customers. A guest staying at the hotel would first interact with the employees stationed at the reception. Thus, it is imperative to have skilled and dedicated individuals at the front desk to create a lasting first impression. It is important for hotels to consider customers as emotional and intuitive beings who observe and imbibe every bit of service offered to them. Hence, it is obvious to assume that the quality of service would depend on the operations within the hotel.
Any hotel is comprised of several departments, like housekeeping, food and beverages and the top management. It is important to facilitate a flow of services and communication between all these various levels so as to optimize the quality of service delivered to the customer. Every employee in the hospitality organization would directly or indirectly affect the quality of experience of the guest (Ahmad, Bosua & Scheepers, 2014). For instance, the efficiency of the housekeeping department would determine how the customer feels about the rooms, the cleanliness and the promptness of service. Summing up, it can be said that main aim of improving hospitality operations in the hotel would have a direct positive impact on the customer service offered.
Competitive advantage within the hospitality industry
According to Urbancova (2013), the main goal of every business, hospitality or otherwise, is to ensure that it maintains a favorable competitive positioning in the market. Leonidou, Leonidou, Fotiadis and Zeriti (2013), on the other hand, argue that adding value for the employees, customers and also the shareholders would play a crucial role in determining the competitive strategic management in the hospitality organizations. Competitive advantage would refer to the way organizations adapt themselves in a highly uncertain industry steeped in volatility.
It also refers to the way an organization strategically gains insight into the needs of the customers and takes adequate measures to meet their expectations (Sigalas & Peka Economou, 2013). As such, it can be said that competitive advantage is the primary goal of every organization. Failure to secure an advantageous positioning in the market would affect the profitability of the company as well.
According to Meihami and Meihami (2014), knowledge is one of the crucial factors that determine competitiveness of an organization. For instance, in the hospitality industry, it is expected that a company would have fair knowledge of their target audience, of the needs of the target market, the position and status of the competitors and measures required to improve competency in the market. However, Marchi, Maria and Micelli (2013) elaborate on the concept of competitive advantage and discuss about the few basic approaches to achievement of competitive advantage in business.
The Porter’s Five Forces theory introduced by Michael Porter in the late 1900s highlights that any organization is affected by five forces, namely the threat of substitutes, the threat of new market entrants, buyers’ power, suppliers’ power and the rivalry that exists within the industry (Liu, 2013). For example, in the hospitality industry, there exists intense rivalry between various global hotel chains in the international market, with each hotel attempting to gain dominance over the other. This model adopts an approach that studies the external environment of the organization in compliance with the performance of the entire organization. On the contrary, Leonidou, Leonidou, Fotiadis and Zeriti (2013) argue that the resources and capabilities of an organization determine its competitive positioning.
According to this theory, the common resources that are shared by the members of an industry and the way they are distributed would play an integral role in determining competitive advantage. This view has been countered by Kumar and Pansari (2016) who believe that a relational approach to competitive advantage should be adopted. In other words, the only way a company can gain competitive vantage over other companies in the same industry is by forming alliances or by partnering up with other firms. In this aspect, it is also important to study the importance of quality service relationships between the organization and the customers. A favorable relationship between the two parties would ensure brand loyalty and affect the customer’s intention to return and promote word of mouth advertising.
Research methodology
Research methodology refers to the series of techniques and methods that can be used to conduct a critical analysis on any subject. Methodology would mean the specific procedures and techniques which seek to identify, process, select and also analyze the information pertaining to a specific subject. In this report, the research methodology methods would be used to critically analyze the performance of Marriott International. The review of literature in the above section highlights three major areas of measuring performance of a hotel, namely guest and customer experience, hotel operations and competitive advantage.
Accordingly, three tools of marketing and strategic management would be used in this report. They are S.W.O.T analysis, Porter’s Five Forces theory and McKinsey’s 7S. While the S.W.O.T analysis studies the internal strengths and weaknesses of the organization and at the same time points out opportunities and threats, the Porter’s Five Forces studies the various industrial aspects which affect the competitive positioning of the hotel. The McKinsey 7S is another tool used for studying the internal environment of a hotel.
S.W.O.T analysis of Marriott International
Strengths
Weaknesses
Opportunities
Threats
Porter’s Five Forces theory
The framework introduced by Michael Porter is a holistic approach to the existing forces within the industry. According to Porter, there are numerous forces which affect the competitive positioning of an organization. In the hospitality industry, there are numerous factors which could be used to understand how Marriott is positioned in the market, especially with respect to its competitors. They are analyzed as follows:
McKinsey 7S framework
The McKinsey 7S framework can be divided into hard and soft elements.
Hard elements
Soft elements
Results and discussion
The results and analysis of the same can be summarized into two main points:
Recommendations and action plan for Marriott International
Although Marriott International is one of the leading hotel chains around the globe, certain gaps or shortcomings have been observed in the case of strategic management and competitive advantage. The recommendations for betterment of the same are as follows:
ACTION |
RESPONSIBLE PARTIES |
DEADLINE |
NECESSARY RESOURCES |
CHALLENGES |
EXPECTED OUTCOME |
A robust new marketing strategy that would improve the brand image of the Marriott chain of hotels. |
Marketing team of the organization |
3 months |
Resources required would be for promotional campaigns, social media campaigns et cetera. Publicity stunts and gimmicks may also be organized to grab attention. |
The company faces severe competition from other brands who have already implemented brilliant marketing practices. Marriott would have to come up with a USP, which sets it apart from its competitors. |
· To lure in more customers · To improve brand positioning |
A referral and rewards program |
Organization. The stakeholders involved would be the customers. |
One year |
Financial resources to provide referring customers with special amenities and discounts. |
Failure to provide the rewards in a timely fashion would lead to loss of faith on the customer’s part. |
· To enhance customer retention. |
Mid level and affordable accommodation |
Hotel management members |
Two years |
Financial resources, budget controls, human resources |
The company has a reputation for being a luxurious brand. It might be difficult to override that reputation and portray the brand as affordable and appropriate for mid level customers. |
· To compete with new entrants and substitute accommodation facilities like Airbnb. |
Conclusion
To conclude, it can be said that competitive advantage forms the most important aspect for any hotel or organization in the hospitality industry. For a brand like Marriott with a global presence, it is of the utmost importance to have a positive position in the market. The brand which has been around for decades has a definite business strategy which takes into account marketing, human resources, finances and other aspects as well. However, this business strategy is outdated and at present fails to provide the company with a competitive positioning.
The report above carries out a detailed analysis of literature pertaining to the various internal aspects of Marriott International and highlights issues which affect the competitive advantage of the hotel. The SWOT analysis and the application of Porter’s Five Forces theory reveals that the company needs to improve its market position. That can be done through innovative new marketing and business strategies that would help the company explore new markets, lure in more customers and also retain existing ones. The detailed action plan and recommendations present some suggestions which the hotel can incorporate into its existing strategies.
References
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