Managing People

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1. Introduction

This article aims to analyse strategic developments of Marriott International Incorporated in last three years, which will help the stakeholders to evaluate the company’s position and sustainable competitive advantage in the global market place. The strategic development analysis will entail the assessment of the macro environment with PESTEL factors, competitors’ environment, and micro environment factors with internal & external factors influencing the company combined with the strategic choice using the BCG Growth-Share matrix.

2. The Situation Analysis

Situation Analysis presents the background for strategic decisions to be made, which represents Marriott International’s position in its environment (Dobson and Starkey, 1993). The PESTEL Analysis is a powerful tool to analyse macro environment the company operates in to evaluate strategic developments of the company over the last three years (Ellis and Williams, 1993), which comprises of Political, Economic, Social, Technological, Environmental, and Legal factor analysis.

Source: Adapted from Johnson et. al (2005)

Fig 1: The PESTEL Analysis: Marriott International

2.1 PESTEL Analysis

2.1.1 Political Analysis

The continuing global expansion of the company shows that it has been able to cope with government regulations for the last decade in relation to national and international taxes, interest rates and foreign exchange rates. Investments in emerging economies such as India, China and Brazil have shown that previous investors and shareholders have achieved good business models in making international investments. However, the global impact of wars and threatened terrorist activities has always prevented investments both on an international and global scale. Marriott is well structured in terms of its policies and brand standards and as a result, international government relations and regulations have not been an issue for the past 3 years.

2. Economy Analysis

The economic performance of the company depends significantly on the economic environment of the United States and in other countries where it operates. Over the last 3 years, the financial health and management effectiveness ratios of the company show that the availability and cost of capital has increased its ability to attract more potential investors and joint ventures to fund investments. The increase in capital market globally reveals that the company has been able to use its working capital more effectively. In the last 3 years the company has followed efficient share price movements until end 2007. Nonetheless, in mid 2006, fluctuations in foreign exchanges and other currencies have forced the company to start expanding in the Middle-East and Africa where it already has high business strengths and high market share. These international investments have proved to be efficient business models and have contributed to a boost in the company’s overall revenue from 2006 to 2008 within its segments as follows:

Year200820072006

($ in millions)12,99011,99511,129

Source: http://files.shareholder.com/MAR

Table 1: Revenues (2006-2008)

3. Social Analysis

The increase in business travellers and competition has forced the Marriott to adapt to social changes in relation to the likes and dislikes of its business customers. The company has started to target this customer segment more efficiently since 2006 ever than before. Additional amenities provided to its business travellers segment includes en-suites laptop and wireless connection within hotel premises and the Marriott applied strategies like discounted room rates, complimentary breakfasts, etc. to increase its sales %. For the past 3 years, the company has also started targeting the ageing population both in the U.S and globally by enhancing their...
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