Sparkle Smithson-Brown/ Marriott 1

Executive Summary

Case Statement
Marriott competes in a highly competitive hospitality industry. Marriott specializes in

luxury brand lodging experiences. Marriott is confronted with financial obstacles and loss of

market share over the next 3 three yeas due to the unprecedented challenges COVID-19 has

impacted the hospitality industry and the world as a whole.

Mission and Vision Evaluation

Evaluating Marriott’s mission and vision statements using the matrices, suggests Marriott

could implemented improvements to encompass the components which it failed to address:

technology, concern for survival, growth and profitability, philosophy, concern for public image,

and concern for employees. Marriott’s mission and vision statement does provide the emotional

bond needed to connect the customer with the experience it is offering.

Milestones

In 1927, J Willard Marriott and wife began a root beer stand in Washington, D.C. Good

food and food service at a fair price were the guiding principle. In 1957, Marriot made a historic

shift in business opening the world’s first motor hotel in Arlington, Virginia; this was the

beginning of the Marriott’s journey leading to becoming the world’s largest hotel company in the

world. In 1969, Marriott opens its first international hotel in Acapulco, Mexico. 1972, Marriot

was the first hospitality company to partner with a cruise business. Marriott has more than 4,100

properties in over 80 countries and territories around the world, over 700,000 rooms and an

additional 200,000 rooms in the development pipeline.

External Assessment
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Marriott is a leader in the hospitality industry. As with any company, there are always

areas in which to make improvements to maintain a competitive advantage. Marriott should

focus on continual innovations in technology, more environmentally friendly, and reduce the

impacts of the COVID-19 pandemic on the hospitality industry. Marriott has a history of

resiliency; it will be able to proactively take advantage of opportunities while mitigating threats

to maintain its position as the largest hotel company in the world.

Internal Assessment

Marriott’s major advantage in the hospitality industry is attributed to it becoming the

largest hotel company in the world. Marriott’s strategy of managing rather than owning results

in a strong balance sheet and healthy cash flow. This has permitted Marriot to continue to expand

without being limited by debt. Marriott has a high brand awareness, with a large product profile,

and loyal customer base. Marriott has many strengths to capitalize on but it is also presented

with weaknesses within its internal environment. Marriott is currently facing some financial

challenges due to the collapse in the global travel as governments impose restrictions due to the

impacts of COVID-19 pandemic and class-action suits over a massive data breach.

Industry Analysis

Marriott competes in a fiercely competitive market. The existence of the rivalry among

the major competitors in the hospitality industry is enormous. Marriott’s major competitors are

Wyndham Worldwide, Hilton Worldwide, Hyatt Hotels, and Four Seasons Hotels. The overall

industry is quite fragmented with only 51 percent of the total hotel market being derived from the

major brand’s properties. The bargaining power of the consumer in the hospitality industry is

high. Customers are constantly demanding value through better quality accommodations or
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additional services. Additional forces for Marriott include the potential of substitute products and

the bargaining power of suppliers. Marriott must continue to focus and anticipate making the

guest’s experience unique, memorable and fulfilling both on and off its properties.

Financial Analysis

Prior to the second quarter of this fiscal year, Marriott was strong financially. Marriott’s

current financial condition is not as favorable due to the impact of the global pandemic. Marriott

is struggling to remain profitable during these unprecedented times. Marriott’s net income is

-31.78% compared to the industry’s -210.66. Although, Marriott is performing better compared

to the overall industry, the negative numbers indicate the hospitality industry is experiencing

hardship. Marriott is experiencing difficulties turning sales into a profit. Marriott’s current ratio

is 0.67. The current ratio measures a company’s ability to cover its short-term obligations with

current assets. The ratio under 1 is an indication that Marriott may potentially struggle to pay its

bills due in year if it does not consider reducing expenses.

Competitive Strategy

It is vital for Marriott to experience continual growth and advancement to remain the

largest hotel company within the industry. The three strategic alternative strategies suggested

were to merge with local hotels in other counties, expansion by building budget friendly hotels in

other countries, or to restructure to cut costs to sustain viability during and beyond the

implications of the pandemic. Each of these options would address the threats, weaknesses,

strengths, and opportunities Marriott is currently managing daily.

SWOT Matrix/ Quantitative Strategic Planning Matric (QSPM)

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The competitive strategies for implementation were derived through the use of the SWOT

Matrix and the QSPM Matrix. The SWOT Matrix identifies competitive advantages by

assessing key external and internal factors to help develop feasible alternative strategies. The

QSPM objectively determines the relative attractiveness of the top three strategies considered for

implementation by weighting each strategy. Marriott’s strategy with the highest alternative score

is restructure to cut costs and to increase efficiency to adhere to the current state of the global

economy.

Recommended Strategy

Although all potential strategies would significantly benefit Marriott; according to the

QSPM matrix, the most attractive strategy is to restructure. The implementation of this strategy

comprises factors which were determined in the EFE, IFE, and SWOT matrices. Devising a

strategy for restructuring is a long-term objective which should be implemented and assessed at

all levels of the business.

Ethical and Social Responsibility

Marriott uses the Utilitarianism approach in its ethical system. This approach emphasizes

the producing the greatest good for the greatest number. Marriott’s restructure plan will produce

the greatest good for the greatest number. It is essential for Marriott to sustain viability its

viability. The approach to restructure seems as if it might go against its core value of “putting

people first” but in all actually it is potentially putting people first. If Marriott is unable to

weather the storm, then it will have more of a disaster effect on a greater number of individuals,

companies, communities, and countries.

Implementation Plan
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A plan to implement a strategy to restructure to cut costs and increase efficiency is major

but necessary for any company experiencing financial constraints. Marriott will have a strong

implementation plan which will involve all top executives globally to adhere to the strategic

restructuring to survive the impacts of the pandemic. Open communication and complete

transparency are vital to the success of this plan. The best option for Marriott to finance this plan

is to use debt financing to capitalize on the highest earnings per share.