Marriot Strategies
Strategies
Marriott needs to pursue market development in Asia with new brands that extend its New World and Ramada presence. Marriott has acquired an operating and development team of experts with the Renaissance acquisition who are familiar with the market. It should use this advantage and its superior management abilities to reach its goal of 200 hotels in the area by the year 2000. Marriott can capitalize on synergies associated with managing New World, the owner of which has agreed to further expansion, in order to gain more market share in an area with high growth potential.
A potential implementation problem with this strategy lies in the threat of sour relations between owners of the hotels and the Marriott (the operator). The owners of the hotels must worry about financing in terms of generating enough net operating cash flows to provide debt service and acceptable equity returns while Marriott is more focused on earning management fees. This could be a potential conflict of interest, but Marriott has enough experience internationally and with management that this issue should not pose too many problems.
Another implementation issue is associated with the brand names that Marriott has acquired. New World exists in China and Hong Kong while Marriott holds the Ramada brand overseas and HFS owns the US rights. The CEO of Ramada would like Marriott to sell the rest of the rights to HFS (Diamond). I feel that it is in Marriott's best interest to hold onto the Ramada name because it gives the company many international properties, but to consider changing the name altogether to associate it more closely with the Marriott name. This would separate the US operations from the International, and allow Marriott to further capitalize on its brand equity. The New World name should be kept the same since it is so prevalent and well-known in the Asian market that Marriott wants to expand into.
Marriott needs to use its high standard of operations in order to remain
Marriott needs to pursue market development in Asia with new brands that extend its New World and Ramada presence. Marriott has acquired an operating and development team of experts with the Renaissance acquisition who are familiar with the market. It should use this advantage and its superior management abilities to reach its goal of 200 hotels in the area by the year 2000. Marriott can capitalize on synergies associated with managing New World, the owner of which has agreed to further expansion, in order to gain more market share in an area with high growth potential.
A potential implementation problem with this strategy lies in the threat of sour relations between owners of the hotels and the Marriott (the operator). The owners of the hotels must worry about financing in terms of generating enough net operating cash flows to provide debt service and acceptable equity returns while Marriott is more focused on earning management fees. This could be a potential conflict of interest, but Marriott has enough experience internationally and with management that this issue should not pose too many problems.
Another implementation issue is associated with the brand names that Marriott has acquired. New World exists in China and Hong Kong while Marriott holds the Ramada brand overseas and HFS owns the US rights. The CEO of Ramada would like Marriott to sell the rest of the rights to HFS (Diamond). I feel that it is in Marriott's best interest to hold onto the Ramada name because it gives the company many international properties, but to consider changing the name altogether to associate it more closely with the Marriott name. This would separate the US operations from the International, and allow Marriott to further capitalize on its brand equity. The New World name should be kept the same since it is so prevalent and well-known in the Asian market that Marriott wants to expand into.
Marriott needs to use its high standard of operations in order to remain