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Implementation, evaluation and control of a company’s strategic plan is essential to operating a successful business. Marriott International, Inc. is a global leader in the hospitality industry. To achieve this goal, they have had to focus on developing and implementing a strategy that focuses on ethical behavior, social value, innovation and diversification (Marriott International, Inc., 2019).
In March of 2019, Marriott International presented a three-year growth plan that indicated their strategy to grow their global presence by opening over 1,700 hotels worldwide by 2021 (Marriott International Inc., 2019). “By leveraging our industry-leading luxury brands, including those we gained from the Starwood merger, our robust relationships with multi-unit owners and our expertise in identifying strategic opportunities in global gateway markets such as Hong Kong, we are well positioned to expand our global footprint by 25 percent in the next three years” (Marriott International, 2019). A growth of that size will open thousands of jobs globally. In turn creating the need for robust policies and procedures for hiring and retaining the exceptional staff that create Marriott’s culture of experience for their guests.
A large portion of the implementation process focuses on the employees of Marriott and its franchisees. Arne Sorensen, CEO, believes that the key to keeping cost down is to hire and retain talent that wants to stay (Gallagher, 2015). With talent that wants to stay there is less turnover which leads to lower costs, less mistakes, positive culture, and ultimately happy costumers. Marriott’s success has been largely due to their culture which can be proven by some 10,600 staff members that have been employed for over 20 years (Gallagher, 2015). Keeping costs down with a talent management focus is another facet of Marriott’s asset-light model (Tully, 2017).
According to Marriott International, Inc. (2019), Marriott has been ranked as one of only a few “global leaders in defining and advancing the standards of ethical business practices.” This assessment is completed by Ethisphere Institute that uses an “Ethics Quotient” to assess a company’s ethical behaviors (Marriott International, Inc., 2019). They strive to put people first while creating a culture of excellence, embracing change, acting with integrity and serving the world in which we all live. They have developed business conduct guides, policies and procedures that they expect of all staff in all levels (Marriott International, Inc., 2017). Marriott provides a Business integrity line that allows all staff members to report any unethical behavior anonymously without fear of retaliation. Additionally, their board members and executives participate in annual assessments to gauge their individual effectiveness (Marriott International, Inc., 2017).
The social value of the company is important to Sorenson and his employees. His focus of putting people first has helped to foster initiatives that promote sustainability. “This includes efforts such as creating resource-efficient hotels, providing job readiness training to underserved youth, empowering diverse business owners through our supply chain, advocating for policies that facilitate travel, purchasing sustainable products, training our associates on human rights and the protection of children, and supporting innovative environmental initiatives” (Marriott International, Inc., 2017). They strive to discover opportunities which allow them to not only give back but to generate economic prosperity for their brands through their corporate social responsibility programs (Marriott International, Inc., 2017).
Marriott is looking to become more adaptive to the millennial age by introducing new experiences in both the look and feel of their hotels as well as the activities available to their members (Gallagher, 2015). Innovating their rewards program to offer more genuine experiences to create a loyal customer base (Marriott International, Inc., 2019). They are opening their eyes to new market ideas such as the Homes & Villas by Marriott (Marriott International, Inc., 2019). A concept that is largely a response to the Airbnb culture that is booming globally. And they are also looking to open over 30 new luxury properties in the coming year (Sturken, 2019).
Evaluation and Control
“Marriott actively manages and measures key impacts from our programs to address: business ethics; human rights; global diversity and inclusion; health, safety and wellbeing; responsible sourcing; women’s empowerment; workforce development; energy; climate change; water; waste; natural capital; community engagement and workforce readiness, especially for disadvantaged youth” (Marriott International, Inc., 2017). They use a Revenue per Available Room (RevPar) performance metric to assess the operations of their hotels based on their ability to fill their available rooms on average. Several of the metrics used to calculate the RevPar are performance indicators as well, such as, occupancy and average daily rate (Marriott International, Inc., 2019). Other metrics used to evaluate performance are the company-operated house profit margins. In other words, it looks at the overall business ability to produce profits by property (Marriott International, Inc., 2019).
Marriott implemented a revenue management system named “One Yield” in 2005 that they have been using ever since. This system helps them to track various metrics such as demand forecasts, inventory, and a drill down of all individual transactions (Hormby, Morrison, Dave, Meyers, & Tenca, 2010). Concurrently they began development of a system named “Total Yield” that expands further than hotel bookings to look at total revenue for all sales across the enterprise (Hormby et al. 2010). Sorensen has proven his strategic plans work as noted by Tully (2017), “from 2012, the year he became CEO, to 2015, Marriott’s fees from management and franchising, as well as such additional income including credit card fees, expanded by 31%, to $2 billion.” Stocks during his tenure have delivered an average annual return of 23.1% (Tully, 2017).
Marriott International has successfully proven their place as a leader in the hospitality industry. They have developed programs that benefit their business needs while helping to protect our planet (Marriott International, Inc., 2017). They implement their strategies by putting people first and striving for excellence in all they do (Marriott International, Inc., 2019). As a result, they have increased profits and delivered on returns to their shareholders (Tully, 2017).
- DATAMONITOR: Marriott International, Inc. (2011). Marriott International, Inc. SWOT Analysis, 1–10. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=bth&AN=69718994&site=bsi-live
- Gallagher, L. (2015). Why Employees Love Marriott. Fortune, 171(4), 112–118. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=bth&AN=101421246&site=bsi-live
- Hormby, S., Morrison, J., Dave, P., Meyers, M., & Tenca, T. (2010). Marriott International Increases Revenue by Implementing a Group Pricing Optimizer. Interfaces, 40(1), 47–57. https://doi.org/10.1287/inte.1090.0482
- Marriott International, Inc.. (2017). Serve 360. Retrieved from http://serve360.marriott.com/wp-content/uploads/2017/10/2017_Sustainability_and_Social_Impact_Report.pdf
- Marriott International, Inc.. (2019). Marriott International. Retrieved from https://marriott.gcs-web.com/node/28931/pdf
- Sturken, C.-A. (2019). Marriott to Open More Than 30 New Luxury Hotels in 2019. Successful Meetings, 68(3), 6. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=bth&AN=135517959&site=bsi-live
- Tully, S. (2017). Marriott Goes All in. Fortune, 175(8), 200–208. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=bth&AN=123523696&site=bsi-live
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