Marriott International Next Step to Success in China

MarriottInternational Next Step to Success in China

Tableof Contents

1 Company Overview 2

1.1 Introduction 2

1.2 Background 2

2 Internal analysis 4

2.1 Financial Analysis 4

2.2 Marketing Analysis 8

2.2.1 Market Size 8

2.2.2 Market profitability 9

2.2.3 Market value 11

2.2.4 Marketing strategies 12

2.3 Operations Analysis 12

2.3.1 Communication system 12

2.3.2 Decision making process 13

2.3.3 Quality Management 14

2.4 Human Resources Analysis 16

2.4.1 Manpower Recruitment, Selection, and Planning 16

2.4.2 Training and Development 17

2.4.3 Employee Welfare and Retention Initiatives 17

2.4.4 Grievances Redress Systems 18

2.4.5 Reaped Benefits 18

3 External Analysis 19

3.1 Demographics 19

3.1.1 Rural urban migration 20

3.1.2 Language 21

3.1.3 Culture 22

3.2 Politics and legal system 22

3.2.1 Foreign investment general policies 24

3.2.2 Foreign investment approval policies 25

3.3 Economic factors 28

3.4 Social factors 29

3.5 Technological analysis 31

4 SWOT Analysis 33

4.1 Strengths 34

4.1.1 International presence helping company offset reliance risks 34

4.1.2 Principal brand programs that help drive Marriott’s business development 35

4.1.3 Loyalty platforms and commanding online presence aiding the company enhance customer satisfaction 35

4.2 Weaknesses 36

4.2.1 Marriott’s business model might insipid the brand perception limiting revenue growth 36

4.2.2 Marriott International experiences backwardness with respect to the information and technology 37

4.2.3 Shortage of low-cost lifestyle brands 38

4.3 Opportunities 38

4.3.1 The United States government encourages tourism promotion initiatives 38

4.3.2 The hotel expansion operations are likely to propel the top-line development of Marriott 39

4.3.3 Individuated experiences 39

4.4 Threats 40

4.4.1 Laws and regulation fluctuations may decrease Marriott’s profits or elevate its costs 40

4.4.2 Extremely competitive and fragmented lodging industry 40

4.4.3 Susceptibility to terror attacks 40

4.5 Solution Strategies 41

4.5.1 The assessment of primary competitors in the market 41

4.5.2 Improving on the product packages offered by Marriott 41

4.5.3 Reducing uncertainty with respect to finances 41

4.5.4 Establishment of an environment meant to promote the company’s future growth 42

5 Competitor Analysis 42

5.1 Competitor Profile 42

5.1.1 Overview 42

5.1.2 Competitive advantage 43

5.2 Marketing Profile 44

5.2.1 Target Market 44

5.2.2 Market Share 44

5.2.3 Marketing Strategies 45

5.3 Product Profile 46

5.3.1 Product Presented 46

5.3.2 Pricings 47

5.4 SWOT Analysis 48

5.4.1 Strengths 48

5.4.2 Weaknesses 48

5.4.3 Opportunities 49

5.4.4 Threats 49

6 Goals and Strategies 50

6.1 Goals 50

6.2 Strategies 50

6.2.1 Studying the consumer habits 50

6.2.2 Differentiating the company in the hospitality industry 52

6.2.3 Offering complimentary services and building brand loyalty 54

6.2.4 Incorporating the local culture in the company’s operations 56

6.2.5 Embracing centralization 59

7 References 61

  1. Company Overview
    1. Introduction

MarriottInternational serves as an international hospitality corporation. Itmainly directs and franchises lodging and hotel facilities.Additionally, it is an international leading lodging corporationhaving above forty-two thousand properties in seventy-nineterritories and countries employing approximately 123,000 workers asof 31 December 2013 (Marriott International, 2015). The companyconducts its operations in Africa, Europe, Asia Pacific, and Americaswith Bethesda, Maryland in the United States as its headquarters. Thecompany managed to record revenues of 12,784 million dollars duringthe 2013 financial year, which was an 8.2% increase from the 2012fiscal year (Marriott International, 2015). Additionally, thecompany’s operation profit registered at $988 million in 2013recording a 5.1% increase from 2012, whereas the net profitregistered at $626 million in 2013 increasing by 9.6% from 2012.Ultimately, as of the 2014 fiscal year, Marriott Internationalrecorded revenues close to $14 billion (Marriott International,2015). The company seems to be experiencing growth in their revenueswith each succeeding year meaning that their next step into China mayenable them register more successes.

    1. Background

MarriottInternational’s history can be traced back to the year 1927 when itwas founded by J.W and Alice Marriott known as the A&ampW root beerstand (Marriott International, 2015). They got into the business onthe grounds of quenching the thirst of people during the hot, muggysummers experienced in Washington D.C., which later acquired the nameHot Shoppes. The stand offered the much-needed service and foodneeded by the people in Washington D.C. that it made this the guidingprinciple to acquire the much-anticipated development. In the year1953, Hot Shoppes managed to go public through the opening of, TwinBridges Marriot, its first hotel found in Arlington, Virginia(Marriott International, 2015). The branch was under J. W. Marriottson’s management after this historical shift in 1957 into the hotelindustry whereas, in 1967, Marriott acquired the name MarriottCorporation. Over the coming twenty-five years, the company turnedinto a diverse international enterprise with Bill Marriott becomingthe visionary corporate executive officer whose leadership stylechanged the hospitality business.

MarriottInternational built its brand on the innovative model named onecompany, multiple brands in the later years of the 1980s (MarriottInternational, 2015). Besides, the company managed to move from beingthe pioneers of extended stay businesses to the launching of variantbrands directed towards business travelers to improving theirpresence globally. The company even managed to split in the year 1993into two corporations: Host Marriott handling food delivery and realestate businesses, and Marriott International handling real estateand hotel management (Marriott International, 2015). MarriottInternational managed to break emerging grounds in its endeavor tobecoming the number one hospitality corporation worldwide. Lookingback at the company’s history, it is evident that it has a veryinteresting past and has grown old incorporating the right levels ofinnovation, and then again emphasized more on participating inmergers and acquisitions. Marriott International has currentlyincorporated innovations such as mobile check-ins along with lobbyGreat rooms aimed at transforming the customers meeting experienceswith the company’s Red Coat Direct Application (MarriottInternational, 2015). Besides, Marriott International is attemptingto make travel experiences appear more brilliant to their consumer.

  1. Internal analysis
    1. Financial Analysis

MarriottInternational has developed its own indicators of performance thatthey use to analyze the financial performance of the business. Theyinclude Revenue per Available Room and the average daily rates thatthey use to determine the demand for their services and the overallrate of occupancy around the year. The hospitality industry is knownto be a highly seasonal business with longer periods of recessionsand shorter periods of boom. The company generates income throughfour different segments: the full-service segment, limited-servicesegment, luxury segment, and the international segment. An analysisof the revenues generated in the various financial segments indicatesthat the full-service segment generated $6,601million in thefinancial year 2013 (Marriott International, 2015). The amount hadincreased by 10.7% as compared to the previous financial year. Thelimited service managed to generate revenues of $2,601 million anincrease of 5.5% while the luxury segment recorded revenues of $1,794million an increase of 1.6% while the international segment recordedrevenues of $1, 522 an increase of 14.4%.

Fromthe analysis of the revenue generated by Marriott International, itis evident that the company has a strong financially. Its financialstrength enables the company to achieve success in China because anytechnological advancement that happen in the hospitality industry canbe implemented in the organization if it boosts the productivity anddecreases the level of competition. The full service segmentgenerates the highest revenue for the company while the internationalsegment generates the least revenue. The variances for revenues canbe attributed to the challenges that the company faces in the varioussegments. For instance, the international segment faces morechallenges as compared to the luxury, limited service and the fullservice segments. The international segment has to deal withinternational laws and policies that keep changing and at times arequite unfavourable to the operations of the business. The luxurysegment, on the other hand, has fewer customers since according tothe social classes present in the society, the rich who occupy theupper class are the least yet they own the highest amount of wealththat enables them to afford the luxury services.

Ananalysis of the operating income of Marriott International shows thatin 2014, the operating income was able to increase to $1,159 millionfrom $988 million that was generated in 2013. The increase wasattributed to an increment in the franchise fees, base managementfees, incentive management fees, owned, leased and other revenue(Marriott International, 2015). The increase in the operating incomeof the owned, leased, and other revenue that was net of directexpense increased because the company had to pay higher branding feesand termination fees for the contracts the company had made. Thedepreciation, amortization, and other expenses also increased theoperating income because of the acquisitions and dispositions thatrelate to the terminations of the contract. The table below shows howthe operating income increased between 2012- 2013 and 2013-2014.

Operating income



Franchise fees

$79 Million

$59 Million

Base management fees

$51 Million

$40 Million

Incentive management fees

$46 Million

$24 Million

Higher owned, leased and other revenue, net of direct expenses

$26 Million

$17 Million

Depreciation, amortization and other expenses

$21 Million

$25 Million

General, administrative and other expenses

$10 Million

$67 Million

Between2012 and 2013, the operating income is said to have increased by $48million dollars as compared to the $171 million increase between 2013and 2014. It is evident that the operating income of the companyincreased between the year, 2013, and 2014.

Ananalysis of the gains and income of the company indicates that theamount has been decreasing over the past three years. In 2012, theamount of gains and income was $42, but in 2013 it decreased to $11and in 2014, it fell to $8 (Marriott, 2014). The reduction in gainsand other income arose from the sale of a portion of the companyshares that were publicly traded in 2013 and the net distributionfrom the cost method investments and equity securities.

Thetable below indicates that the gross profit of the company has beenincreasing over the years. The increase in the profits generated bythe company indicates that the sales made by the company are higherthan the costs of goods sold. It also indicates that the sales of thecompany have been increasing over the years, hence the reason why thegross profit was increasing over the years. The table also indicatesthat the net income has also been increasing. Net income is obtainedwhen the gross profit of the company has been taxed. The taxationrates vary from one country to another. China is among the countriesthat have recorded low taxation rates of 25% as per 2015. Thetaxation rates in China make it affordable for the company tocontinue its operation in Asia. They also allow the company to earnhigh net incomes that boost the growth and development.

Income Statement






Gross Profit






Net income







MarriottInternational success in China is determined by the 175 hotels thatrepresent Marriott. The hotels have around 55, 000 rooms but thereare still ongoing projects in the region that are aimed at doublingthe number of hotels in the area by 2019 as per the company’s goalsand objectives (Hormby, et al., 2010). However, it is important tonote that there are financial risks affecting Marriott Internationalthat also tend to limit its investment opportunities. For instance,the company manages and franchises several hotel properties and theowners of the properties rely on capital from the company to developmanage and improve the quality of service and products. There areinstances when the company cannot access the needed capital for thedevelopment. Such situations creates a financial risk for the companybecause they need to spend money to generate profits but if there isno money to spend, how can they generate profits? The capital marketsof the hotels and the real estate properties are also likely toconstrain the means, which the company generates profits throughfailing to meet the required debt service payments or when the loansmature, they are unable to refinance them.

    1. Marketing Analysis
      1. Market Size

MarriottInternational has a large market share that they acquire throughtheir marketing strategies. The company has made it their concern totarget and retain the high-value customers through various marketingstrategies. For Marriott International to achieve success in China,they must create awareness about the existence of their products.Marriott International has a large market size since it has more than3000 properties and 18brands in the 73 countries that they conducttheir operations (Clough, 2014). In the China market, the company hasseveral hotels that deliver quality services to their Chineseconsumers. The current market size of Marriott international in theAsia Pacific region is quite high with more than 175 hotels in theregion that provide 55,000 rooms to the potential customers. Thebusiness currently dominates a large market share that enables it tobe among the leading companies in the hospitality industry. The largemarket share also enables the company to generate the high revenuesthat allows it to support the growth and development projects of thecompany.

Thefuture market size of the company is expected to increase over thenext few years since the management is working towards increasing thenumber of hotels and the rooms available to customers all over theworld. The company is implementing different changes such asembracing new technology that is aimed at attracting more customersto their business. The management is also working on projects thatshall see improvement in the quality and quantity of the products andservices offered in the company. For instance, China has been thelargest market in the Asia region but the company has severalexpansion projects in its pipeline that are aimed at increasing thenumber of hotels to around 330 by around 2016. Increasing the marketsize is a strategy that is aimed at reducing the level of competitionby dominating the market with different brands.

      1. Market profitability

Thedeveloping opportunities and threats and their relation to thestrengths and weaknesses of the company determine the marketprofitability of Marriott international. It is not easy to generateprofits in an industry that is characterized by high level ofcompetition and high rate of technological innovation especially foran international company because they have to understand the localoperations first before being attractive to the local consumers.Porter argues that the five forces that determine the competitivepower of a business situation can influence market profitability(Hill &amp Jones, 2010). One of the forces is the supplier power.Marriott international relies on suppliers to provide them withvarious products and services. The company has many supplier choices,which limits the power that suppliers have over the company.Therefore, the easy access to different supplier has made itprofitable for Marriott to negotiate the prices of the products andservices downwards enabling them to earn profits in the market. Buyerpower is also another factor that influences market profitability. Ananalysis of China’s hospitality industry shows that there aresubstitute products and services being provided by other hotelcompanies in the area. Customers are likely to switch from Marriotthotels to other services if they are dissatisfied. The demand for thehospitality services in China is seasonal but the buyers do not havethe power to drive the prices down because the quality they get fromMarriott is unique. The organization can increase its marketprofitability because the customers do not have enough power to drivethe prices charged down.

Thenumber of competitors within the hospitality industry in China isquite high and they are capable of providing stiff competition toMarriott. The main competitor who may affect the market profitabilityof the firm is the Jin Jiang International who creates competitiverivalry in the Asia region thus undermining the profitability ofMarriott. Threat of substitution undermines the market profitabilityof an organization since the customers may find a different way ofdoing the activities of the company and achieve the desiredsatisfaction. For example, when traveling, people may decide to sleepat a friend’s or relative place instead of a hotel thussubstituting the hotel services. In China, customers can easilysubstitute the products and services they assess from Marriottinternational. However, the company is minimizing the threat byensuring they provide high quality and complimentary services totheir consumers so that they do not substitute their services. It isreducing the threat of substitution by ensuring that their customershave a memorable experience that shall increase their marketprofitability. The threat of new entry to the hospitality industry isalso another factor that affects the market profitability of Marriottinternational. New firms can easily enter and exit the hospitalityindustry because there are minimal legal requirements and affordabletechnology can be accessed. However, new entry into the firm do notpose a major threat to Marriott international because of theexperience they have gained within the hospitality industry since thecompany began its operations. Besides, they have a strong financialbackground that enables them to adopt the new technologies and arequite flexible to the changes that are occurring in the market.

      1. Market value

Howan organization adds value to its industry helps to analyze a market.When starting a business or a company, the aim is to create value byproviding the target consumers with a useful product and service. Thedifference between the value that is created by an organization andthe cost incurred in creating that value generates the profit marginfor the firm. An analysis of Marriott using Porter’s value chainanalysis shall help in determining how the hotel adds value to theircustomers (Grünig &amp Kühn, 2001). According to the value chainanalysis, an organization is involved in both primary and supportactivities. The primary activities are directly related to themanufacturing of goods and services. They include activities such asinbound and outbound logistics, marketing and sales, operations andthe service the product gives to the consumer. On the other hand, thesupport activities involve actions within the organization thatsupport the primary activities. They include procurement, humanresource management, technological development, and infrastructure.Marriott international understands that for the company to dominatethe hospitality industry, it has to integrate both the primary andsupport activities to create value for the organization. The companyidentifies the link between the primary and support activities andthey develop strategies that shall create awareness of the products.

      1. Marketing strategies

Marriottinternational has embraced various marketing techniques that areaimed at promoting the products and services of the company amongconsumers. The company has invested in global marketing resourcesthat are aimed at enhancing brand equity, increasing demand, andoptimizing the revenue generated by the company. Some of thepromotion techniques that have been adopted by the company includeadvertising through media channels such as television, radio, andsocial media. The high rate of technological innovation has made highlevel of development in the communication sector. The technologicalhas given rise to ecommerce, a business model that allows businessesto connect with their customers through the internet. For example,social media consists of accounts such as Facebook, Twitter, andInstagram where the company advertises their products and services toconsumers. The modern channels of marketing are considered moreefficient because they reach a wider audience and are less costly.The company has also incorporated the Chinese culture in theiradvertisements so that the local citizens can identify with theirproducts and services (Fairchild, 2014). Before the company launchesa new product or service to the market, they conduct a survey oftheir target market so that they can implement the most appropriatemarketing strategy. The feedback from the customers also enables themanagement to understand the needs of the customers and provide themwith services that satisfy their services beyond their expectation.

    1. Operations Analysis
      1. Communication system

MarriottInternational operations involve the various activities done in theorganization that ensure that there is efficient delivery of productsand services to the consumers. Communication is an essential factorthat can be used to understand the success of Marriott internationalin the China market. Communication is considered key in the functionsof an organization as it determines how employees relate with theirmanagers as well as how the organization communicates with itsstakeholders such as suppliers and customers. Marriott Internationalhas embraced an open system of communication that enables themanagement to exchange information with its employees. Whenever theemployees want to communicate with their senior managers or immediatesupervisors they are freely to do so but they have to follow theappropriate system that has been adopted in the organization. If theworker has an issue that they want addressed by the management, theyare required to report it to their supervisor who handles theproblem. However, if the issue is beyond his power, they are requiredto report to the senior management. The company policy on the systemof communication is aimed at ensuring that power and the system ofadministration is upheld. The managers of Marriott International alsotry to communicate a friendly environment with their employees sinceit helps to boost their morale towards work. An example of how themanagement creates friendly relations with their employees is bylistening to what the employees have to say, greeting them, andfinding out how they are faring. The management also tries to ensurethat they communicate frequently with all their stakeholders so thatwhatever information they receive can be acted upon and promotesmooth workflow.

      1. Decision making process

Decisionshave to be made frequently at Marriott International to promotesmooth workflow and to ensure that major issues are addressed beforethey develop into big problems that cannot be handled. An analysis ofthe decision-making process of Marriott International enables one tounderstand the operations of the organization. The process of makingdecisions at the firm begins by identifying the decision that is tobe made. The management then gathers information from the relevantstakeholders especially the employees of the company. Alternativesthen undergo identification and weighing based on priority. The mostappropriated decision is made from the alternatives and action istaken by implementing the selected alternative. After some period, areview of the decision made is then done to determine theeffectiveness of the implemented decision.

Thedecision making model implemented by Marriott International makes thecompany to be successful in China because it enables the managementto make decisions that align with the goals of the organization. Themodel also enables the firm to implement the most appropriatedecisions that shall enhance the operations of the company. The modelalso involves the employees in running the affairs of theorganization by asking them to brainstorm ideas on the how they thinkthat the management should handle the issue. The only majordisadvantage associated with the decision making model used byMarriott International is that the process is time consuming and maydelay any rapid decisions that the management may be forced to make.

      1. Quality Management

Variousactivities are involved in an organization, employees have specificroles, and responsibilities that they are expected to fulfill.Despite the many activities, the most essential factor that they arerequired to observe is quality management. Quality management refersto fulfilling organization activities to a certain excellence levelto ensure that the customers are fully satisfied and the desiredstandards are met. It involves quality planning, control, assurance,and improvement. Marriott International has implemented variousquality processes that are aimed at ensuring that the organizationmanages to deliver high quality services and standards of theircustomers. For instance, when managing the financial records of thecompany, the financial department is required to follow certainaccounting standards when preparing the financial records of thecompany. The accounting standards ensure that there is consistencywhen preparing financial records of all properties and businessenterprises of Marriott. The quality standards also enhance thesuccess of the firm in China because it enables well coordination ofactivities.

Marriottalso implements quality management in the organization by regularlytesting the quality of their services and products. The government ofChina imposed laws on international organizations that require anygoods and services that are brought into the country meet a certainstandard. Therefore, inspections are conducted frequently to ensurethat the international organizations meet the specified standards.Companies in China must meet the standards as provided by the ChineseNational Committee of the ISO (Guasch, 2007). Marriott Internationalprovides high quality services to the Chinese operations. Theorganization has met all the national standards implemented by thegovernment. The company is expected to be successful in the Chinesemarket because it has adopted both the national and internationalstandards that enhance the quality of service delivered to customers.

Qualitymanagement is a parameter that ensures that consumers of the productand services of Marriott International are well satisfied. Qualitymanagement enables an organization to achieve customer satisfactionthrough implementing quality control measures such as frequent andrandom inspections. The measures tend to identify any issues ormistakes that are in the company’s system that may affect thequality of service in an organization. The measures also ensure thatthe company remains reliable and valuable by consumers

    1. Human Resources Analysis

MarriottInternational’s history of caring of its workers dates back intoits earlier years when J. W. Marriott individually counseledemployees with respect to their individual issues at the initialhotel. The founder valued his employees presence keeping theminformed on the recent happenings at the hotel and providing themwith excellent training. He also made sure that newly recruitedemployees felt incorporated into the company’s practices. Further,he ensured that the managers at each branch are responsible for theirsubordinates’ satisfaction since the hospitality industry requiredthe provision of the best services presented to the customers toensure retaining and new alluring occurs.

Inaddition to offering a competitive payment package, MarriottInternational strived to offer their employees an appropriate workinglife. It gives equal significance to the non-monetary considerationsincluding good leadership, training, work-life balance, a friendlyworking environment, and better development opportunities. Due tothis, Marriott’s attracts above 150,000 workers globally stayinglonger at the organization due to happiness and satisfaction (Wong, &ampWickham, 2015). The guiding principles and culture of MarriottInternational has a considerable influence on its human resourcepractices, which include workforce recruitment, planning andselection, training and growth, employee welfare and retentioninitiatives, grievances redress systems, and reaped benefits.

      1. Manpower Recruitment, Selection, and Planning

MarriotInternational has attached a great amount of importance to workforceplanning (Wong, &amp Wickham, 2015). The planning starts from thepoint where the employees enter into the organization and goes on toeven the higher positions. Each of the units in Marriott, eitherdepartmental or divisional, prepare their individual plans ofexpansion over the coming years, and, during this process, decide onthe managerial and entry level number of workers needed forexpansion. These planning processes involved detail requirements onthe new planned unit number within a given period and provides roughpictures with respect to the possible organization structure.Additionally, they were meant to determine the time needed foremployee development into managerial positions, necessity needed forexternal recruitments, and the present employee availability withinMarriott International. Therefore, the company had set out plans whenit came to selecting and recruiting their employees. Furthermore,they made strategies that ensured that these employees fit into theirplans, future and current.

      1. Training and Development

Inagreement with Wong, &amp Wickham (2015) once Marriot Internationalrecruited the appropriate customer, they had to ensure that thesecustomers get accustomed to the unique working environment of thecompany. Therefore, the company placed more emphasis on training anddevelopment initiating varying programs between the managerialpersonal and the frontline employees. Over a period, the company’straining programs advanced form the usual classroom-centeredteachings to a more interactive form of multimedia training. Thecompany’s new recruits go through training sessions that last eighthours where they are provided with Marriot International’s overviewas well as their personal roles within the company.

      1. Employee Welfare and Retention Initiatives

InMarriot, employee retaining within the competitive hospitalityindustry is a vital element due to the high costs related to therecruitment and training of new employees. According to Wong, &ampWickham (2015), this is true especially because MarriottInternational operates in an industry that needs everyday attentionhaving booming businesses especially during holidays and the weekendswhen compared to weekdays. Consequently, customer service provisionwas to be based on 24 hours, seven days a week and 365 days a year(Wong, &amp Wickham, 2015). The impact resulted in hectic workingschedules for Marriott’s employees where the regular workweek lastsabove fifty hours. The resulting consequence was many of theemployees baring the managerial posts resigning since they neededmore time devoted to their private lives. Faced with this challenge,Marriott International initiated a new program, which was namedManagement Flexibility in the year 2000 during the month of Februaryin three of its hotel properties (Wong, &amp Wickham, 2015). Themain objective of these programs was to aid the Managers at thefacilities balance their personal and professional lives effectivelywithout influencing the customer service or Marriott’s financialrecords negatively. The programs worked well and were incorporated inthe organization making working hours flexible for the company.

      1. Grievances Redress Systems

Bythe middle years of the 1990s, Marriott International launchedcomprehensive grievance resolution systems dubbed GFT (Guarantee ofFair Treatment) that ensured the address of employee complaints(Wong, &amp Wickham, 2015). Under this system, grievances passthrough the successive platforms in Marriott International’shierarchy, that is, from the direct superior, depending on theemployee’s satisfaction with the remedy response at every stage.Conversely, these strategies often failed, and the company adoptedmethods such as peer-reviews, toll-free hotlines, and mediation,which have so far worked effectively for the company ensuring thatthe employees have solved problems.

      1. Reaped Benefits

MarriotInternational’s efforts throughout the years to establishemployee-friendly working environments merited it extensiverecognition within the hospitality sector starting with the bestplace to work award (Wong, &amp Wickham, 2015). The reaped benefits,thus, included elevated levels of employee satisfaction rates andlesser turnovers. It is evident that if their employees are satisfiedthey manage to do their best for the company hence provide the bestpossible customer service thereby increasing the company’s revenuesacross the different brands worldwide.

  1. External Analysis

Theexternal analysis involves the discussion of the Chinese people, thepolitical environment, the economy, the social, and the technologicalfactors that may affect Marriott hotel in its venture into China.Through this external analysis, Marriott International may manage tostrategies on how it will make entry into the Chinese market whilesimultaneously increasing its revenue by being successful.

    1. Demographics

Accordingthe China bureau of statistics, the Chinese population isapproximately, 1.355 billion people making it the most populatedcountry in the world as 2010 (Adams, 2006). The Chinese populationgrowth rate is estimated to be at 0.47%. The population of chinamainly constitutes of middle age and the senior citizens. That can beattributed to the one child policy instigated by the Chineseauthority with an aim of controlling the population growth if thecountry. In agreement with Nigel, Campbell &amp Stonehouse (2003)estimate that the distribution of the Chinese population is includesthe people being between the ages of 25-64 making up 68% of thepopulation of the country (Adams, 2006). On the other hand, thepeople between the ages of 0-24 years make 32% of the population. Themedian ages for the women is estimated to be 37.5 years while for themale counterparts is at 35.8 years (Nigel, Campbell &amp Stonehouse,2003). Through this statistics, Marriott International will benefitsince the Chinese market is extensive having a large customer base.With this information, the company can strategize of introducing aproduct portfolio into the industry that caters for the generationsrepresented in the country. Furthermore, the information providesMarriott International with relief in terms of competition since theChinese market has proved to be large. Therefore, each of thecompanies in the industry will have quite a significant number ofcustomers depending on the services and strategies they present.

      1. Rural urban migration

Therural urban migration of China is on the rise in recent past. Themigration from the rural to urban areas can be traced back to the1980’s when the Hukou system popular for hindering the urbanmigration through registration of people devised in the 1950s startedto loosen (Nigel, Campbell &amp Stonehouse, 2003). The decline inthe registration policy, the market demands, and the need of thepeople seeking better economic opportunities in the urban centers aresome of the reasons for the high rate of urban migration. The shiftof people from the rural areas to urban areas is as result of declinein the agricultural industry. They further explain that the Chineseeconomy has placed dependency over time on the agriculture sector.However with growth in the service and manufacturing industries thepeople are moving to urban centers in pursuit of better paying jobs.Through the Chinese population shift into the urban areas, MarriottInternational can maximize on setting up their hotels in the urbanregions due to a strong customer presence. Besides many of theindividuals inhabiting the urban areas have a particular type oflifestyle that Marriott can maximize on through the introduction ofhotels that have entertainment spots. These entertainment spots mayinclude casino and gaming centers and music clubs among others. Thecities are also favorable for the hotel and hospitality industriesdue to the economic activities in the regions that are potentialcustomers for Marriott hotels. On the other hands, even though manyof the Chinese populations are leaving the rural for the urbancities, Marriott International should not overlook the rural market.The company should go ahead and establish a number of hotels that aremainly ranging in the economy class to maximize on this market.

Theopen reforms and open economic policy has led to china’sunrepresented economic growth that has ultimately led to the economicboom. Foreign investments in the Eastern urban areas have alsopromoted the migration. The slow income growth in the rural areas hasalso led to the increased population in the urban areas. Thepopulation move has been attributes to the 50.6% as at 2011 levelurbanization of China (Adams, 2006). The most populated cities areShanghai with a population of 20.208 million, followed by capital ofChina Beijing with 15.594 million and Guangzhou with 10.849 millionpeople (Nigel, Campbell &amp Stonehouse, 2003). Due to the Chinesegovernment’s move to introduce reforms in terms of foreigninvestment, Marriott International can take full advantage of thisand introduce multiple hotels in the industry. According to Adams(2006), this would be in favor of the company since China iscurrently serving as the globe’s second leading economy, meaningthat the Chinese market can afford to sustain the company.

      1. Language

Thestandard official language of the Chinese people is Putonghua whichtraditionally formal version the Chinese language (Nigel, Campbell &ampStonehouse, 2003). In the special administrative regions of China,such as Hong Kong, whereas the Portuguese language serves as theofficial linguistic used in Macau. English is also widely used inMacau though not official. In the Hong Kong and Macau the traditionalChinese characters are widely used. Marriott International shouldtake advantage of cities such as Hong Kong while establishing hotelssince they will be able to communicate effectively with the customerbase in the area. According to Adams (2006), this is very importantsince communication is mainly the Key to the success of a business.With this, Marriott International will manage to get a goodestablishment ground that is beneficial to the company’s successrates.

      1. Culture

TheChinese people are considered very conservative. The Chinese peopleare religious and widely subscribe to Confucianism, Taoism andBuddhism (Nigel, Campbell &amp Stonehouse, 2003). There areChristians and Muslims who are scarce and are mainly found in theurban centers. Scholars have however, failed to bring out majordifferences in the three religions that there are prominent in China.Research has put that they are similar in the doctrines and way ofdoing things. With this information, Marriott International can worktowards understanding the people’s culture as well as religions andfashion their hotels with relation to the needs of the Chinesepeople. The needs will have to include the manner by which they goabout serving their customers. Adams (2006) claims that the companyshould ensure that they serve with high respect and ensures that theycreate an environment where they can foster a relationship with theircustomers. Additionally, the company should ensure that theconstruction of their hotels and restaurants are aligned to theChinese culture. The Chinese people value their heritage, so MarriottInternational should fashion their building in accordance to theChinese people’s likeness and place decorations that represent theChinese market. They can further, incorporate Chinese dishes intotheir menus so that they could cater for the people both in the ruraland urban markets.

    1. Politics and legal system

Politicalsystem of China refers to the structure of the politics, thefundamental laws, and the regulations and rules that govern thecountry (Nigel, Campbell &amp Stonehouse, 2003). The politicalstructure controls the state power, the government, and therelationship between the state and the society. The political systemalso formulates and implements policies that affect the businessoperations and key economic activities in the country. From thestructure adopted, it is evident that the people throughrepresentations by the parliamentarians formulate business policies.China has enjoyed political stability in the recent past. Communismin the country has ensured cohesiveness in the region. The stableeconomy attracts both foreign and local investors in the country.That, therefore, raises the level of competition in the economy. Theeconomy of China is a mixed economy where the market is controlled byboth the market forces of demand and supply, and the governmentintervenes in some situations. The intervention of the government isto cushion either the consumer or the producer from exploitation. Dueto this, Marriot International can take advantage of the Chinesegovernment’s allowing of foreign investors into their market andestablish their hotels and facilities. Furthermore, the governmentmanages to shield the producers in the Chinese competitive marketfrom exploitation making it a good environment to set up business.

Thegovernment of China has created fundamental policies that managebusiness transactions of business in different capacities (Adams,2006). In the interest of advancing trade and growth in China, thegovernment controls, the power, ports, and telecommunicationsindustries. Although, there have been reforms and removal ofrestrictions in the hospitality industry in China, the governmentinvolves itself to some extent. Furthermore, the Chinese governmentinvolvement in the thriving industries in the Chinese market directlyinfluences exportation as well as importation costs incurred bycompanies with respect to the raw materials and finished products.Therefore, for a new entrant into the China economy they shouldconsider the amount or the costs they are bound to incur in theexportation of raw materials and importation of the finishedproducts. In particular, Marriott International should consider thecosts of importing decorative materials or building materials fromthe parent country into China. Since these costs may influence eitherthe company in a positive or a negative manner.

Thecountry adopts a socialist system, which based on the worker-peasantunion and practicing people’s democratic centralism (Nigel,Campbell &amp Stonehouse, 2003). A single party the state power withthe people’s republic of china is exercised through the communistparty runs the country. The leadership of the country is in twolevels the national politics and the municipals politics. Thepresident of China is the head of state that is the ceremonial headunder the national people’s congress. He is also the leader of thecountry. The premier of china on the other hand is the head ofgovernment. He presides over the state council that is comprised offour vice-premiers, the heads of commissions and ministries. Thecountry being a single party state, the general secretary of theCommunist Party of China holds power over the state and thegovernment (Adams, 2006). Due to a social system, MarriottInternational must be aware of the roles of the worker-peasant unionsand ensure that the employees at their premises are treated withdignity and respect. Additionally, they should be treated inaccordance to that which is expected by the union showing limiteddegrees of unfairness.

TheChinese controls major sectors of the economy with the governmentowning most of the countries bank and the three major oil companiesand they present the following policies with respect to theindustries across China.

      1. Foreign investment general policies

Thestate council placed the rules guiding the orientation of foreigninvestments in the Chinese economy in the year of 2002 on February(Nigel, Campbell &amp Stonehouse, 2003). The policies classify theinvestments into four different categories. There is the permittedsector. In this sector, investments in the category are authorized.There is the encouraged sector, which refers to the industries whereforeign investment is lacking in the Chinese economy thus thegovernment advices and encourages investments in that in industry.The restricted category refers to the category where the government’sintervention is required in the case where a foreign company isinterested in investing in that sector. With respect to MarriottInternational, it lies in the permitted category of investment.Therefore, the company must maximize on this and ensure that itinvests well within the market.

      1. Foreign investment approval policies

Investingin the Chinese economy involves approval by various committees andauthorities. There exist different authorities that oversee thedifferent aspects of a foreign investment through the central andlocal governments view (Adams, 2006). Marriott International isenjoying benefits from this especially when the government removedrestrictions on foreign investments in the Chinese hospitalityindustry. The company, due to these approvals, should ensure thatthey maximize on the market and ensure that they have presence acrossthe country. With this, they will manage to make full investments inthe country and even contribute to the increased economy of Chinaespecially since there is a stable market and a stable ground ofhuman resource.

        1. The national development and reform commission (NDRC)

TheNDRC evaluates the project through examination of the procedures tobe used (Nigel, Campbell &amp Stonehouse, 2003). The commissiontakes into consideration the opinion of other stakeholders like theministry of environment concerning the environment protectionpolicies. Marriott should be aware of this and conduct its businessesin accordance to the environment protection policies presented byNDRC. If Marriot International fails to meet the policies placed bythe body, it might experience fallouts with the authorities of thecountry and forced out from operating in China.

        1. The Ministry of Commerce

TheMOFCOM is also involves in the establishment of foreign investedenterprises (FIE) (Adams, 2006). The ministry is involved in theapproval of the FIE’S in the Approved areas and in industries andprovides the FIE`S with the constitutional documents that contain thepermit to work in the Chinese economy. Marriott International shouldeasily follow the happening with respect to MOFCOM since this iswhere they will gain knowledge relating to that which they areapproved to do and vice versa.

        1. Special industry approval

Themain approving bodies are the NDRC and the MOFCOM. Nonetheless, otherauthorities may be involved in permitting an international companyinto the company dependent on the industry the company is intendingto invest. There are sectors that are limited to foreign investorsand especially the third party investors. Authorities may be involvedin approving or disapproving a foreign investment. For instance, aninvestment in the food or pharmaceutical industry may requireapproval from the State food and drug administration of china inaddition to NDRC and MOFCOM (Nigel, Campbell &amp Stonehouse, 2003).With respect to this, Marriott International should be ready to allowan inspection of the food they offer to the Chinese people from theState food and drug administration of china. The body is meant toconsider if the food is fit for human consumption or not, therefore,not harm the health of the Chinese population. Besides, this, theyshould also expect and inspection of their constructions from theappropriate oversight body ensuring that their building are not proneto natural calamities and meet the standards of the Country.

Inan aim of promoting trade, the law of the country through theconstitution provides legal provisions that govern trade. Accordingto Wong &amp Wickham (2015), a subsidy is a form of payment offeredby the government. In China, the government provides tax break tocompanies as long as they are eligible. Subsidy of another kind thatcan be advantageous to my business investing in this country is theavailability of low tax interest loans. The government offersbusinesses that are eligible for law-taxed loans that may be used forexplanation of the business with favorable payment conditions. Inaddition to that, the government also offers direct cash grants andgovernment–equity participation. These conditions are favorable forinvestment in the country since the interest rates have beenconsidered a major hindrance to growth and investment in the globaleconomy. The legal system also provides for the promotion of localindustries. The legal principals in China categorically state thatfor a foreign company operational in the country, a high percentageof the products manufacturers must be made with the raw materialsavailable locally (Wong &amp Wickham, 2015). Another merit is theantidumping rules operational in the Chinese economy. With respect tothis, Marriott International can franchise a Chinese owned companyand ensure that they get the benefits provided by the government suchas immediate cash grants and loans. Marriott International shouldalso be knowledgeable on matters relating to cooking their foods inthe hotels and constructing their hotels with materials found withinChina in accordance to the countries legal principles.

Thelaw protects the companies operational in the regional from dumping.Dumping refers to the situation where a company in the same industrysells its products at lower prices with the target of winningcustomers and weakening the competitors (Wong &amp Wickham, 2015).Firms that gain unfair competitive advantage may use illegal means toundermine competition. The legal system of China protects thecompanies through the rule of antidumping. Additionally, the lawrequires that foreign firms should have a local partner in conductingbusiness. While that may be active in promoting the local businesses,it may be a disadvantage on the side of a foreign investor. That isdue to the fact the locally available material may not be of theexpected quality. Since the raw materials determine the quality ofthe finished products, use of substandard raw materials may lower thequality of the finished product. Reducing the quality of a productnegatively affects the marketing and consumption of good. Withrespect to this, Marriott International can be assured that the localcompanies within the Chinese market will not experience favoritismfrom the government hence assured of the market being highlycompetitive. Due to this, the company can attract their individualcustomer base fairly and acquire a market share in China. MarriottInternational should also be aware of the policies place with respectto only using raw material in the country to cook their food. Withthis information, the company may collaborate with a local companyand show them the different technologies needed to make high qualityraw materials that result in high quality food. With this, thecompany will manage to create a competitive advantage and singleitself out from the other companies in the industry.

    1. Economic factors

Economicfactors relates to those factors that affect the profit level of acompany. They determine the performance and the condition of aneconomic region. Economic factors are highly fluctuating and theytend to influence greatly the strategies of an organizationespecially because they determine the amount of profit a company canmake. An analysis of the economic factors includes factors such asinflation. Inflation refers to an economic condition when the pricesof goods and services greatly increase because of the highcirculation of money in a country. When the inflation rate increasesin China, the prices increases and not many people are willing tospend money while when the inflation rate decreases, the pricesdecreases and people are more willing to spend money and even accessaffordable loans from banks and other financial institutions (Adams,2006). Marriott success can be greatly affected by inflation, hencethe management needs to observe how the economy behaves when theinflation rate increases, and the rate of business reduces. Thecompany shall not have many customers demanding their services ascompared to when the inflation rates are low.

Therate of unemployment refers to the number of citizens who do not workin a country. The rate of unemployment in China is said to be around4%. Marriott international needs to consider the unemployment rate ofa country because human capital is an essential resource in thedelivery of products and services of an organization. Employment ratehelps to determine the availability of skilled workers in an area andto determine their salary range. The rate of employment affects theeconomic conditions of a country since when they are high it impliesthat many people do not have reliable income and they rate of povertyincreases yet they cannot afford to pay for the basic services.China’s rate of unemployment indicates that human resource is not ascarce resource. Marriott is likely to be successful in acquiring thedesired skilled employees.

    1. Social factors

Socialfactors entails those factors that affect the way consumers thinkwhen it comes to making decisions on what to purchase. Social factorscan influence the operations of an organization both positively andnegatively. Organizations need to ensure that they understand thebehavior of their customers especially when it comes to making buyingdecisions. One of the social factors is the social classes that arepresent in the society. The classes include the upper class, middleand the lower class. The upper class consists of the most wealthy whofocus more on the quality rather than price while the lower class aremore concerned of the price rather than the price. Thus, when makingtheir buying decisions they are guided by different factors. Marriottis interested in the upper class hence to be successful they mustensure that they provide high quality goods and services.

Consumerscan also be grouped based on age. In China, the younger individualsare more willing to spend as compared to the elderly (Adams, 2006).The contrasting purchasing behaviors are because of the differenteconomic times that people have experienced. The elderly haveexperienced tough economic times and faced financial hardships unlikethe young ones who have experienced a more stable economy. It isessential for Marriott to understand the disparities in the agegroups among consumers so that when implementing their pricingstrategies they can determine how to address the varying needs of theconsumers. Understanding the needs of consumers in the various agegroups is also important as it guides Marriott employees to know howto address the various customers.

Customersalso tend to have different tastes and preferences when selecting theproducts and services that they wish to purchase. Friends, family andthe current fashion influence the tastes and preferences. It isimportant to understand the how the tastes and preferences amongconsumers trend since it shall help the business to know how to meetthe changing demands of their consumers. For example, customers mayprefer having comfortable rooms that provide them with ample silenceso that they can rest peacefully. However, the tastes and preferencema change such that they start preferring rooms that are fitted withentertainment system and television. Marriott can be successful if itis keen and ensures they stay up to date with the changes inpreference and tastes. Additionally, the company needs to be highlyflexible so that they can adapt to the changes that arise from thesocial factors influencing the operations of the company.

Thelevel of education also varies among the consumers. There are highlyeducated individuals who understand the entire operations of acompany while there are those who are less educated. It is essentialfor the management to understand the disparities in the educationlevel of their potential customers because it determines how theyrelate with them. For instance, in a highly educated society, anorganization is required to provide high quality services to theconsumers because they understand the entire operations of theorganization and the state of the economy. They are likely toquestion if they are being highly charged. However, in an illiteratesociety, the consumers may not understand when the company isoffering discounts and other operations of the company. Therefore,the management has to pay extra attention to customers who have loweducation level. Understanding the education level of customers is anessential social factor that can contribute to the success ofMarriott because they understand how various consumers are thinking.

    1. Technological analysis

Anoverview of the Chinese market shows that several technologicalfactors that may affect the operations of Marriott International.Technological factors refer to the systems that are available in thecountry that support the delivery of products and services to theChinese consumers. Technological factors may greatly influence theoperations of the hotel because they determine the quality ofproducts and services. Technology also influences the efficiency ofthe services as well as the systems of the company. One of thetechnological factors that may influence the success of Marriott inthe Chinese market is the availability of potential technologies.China is known to be among the leading countries in technologicalinnovation ((Nigel, Campbell &amp Stonehouse, 2003). Therefore,Marriott can adopt many potential technologies in their operations inChina. The only limitation that may arise from the availabletechnologies is determining the most appropriate technology thatmatches with the operations of the company. Besides, the cost ofaccessing the potential technologies may be too high especially whenthe locals are selling it to an international organization.

Anothertechnological factor that may influence the success of MarriottInternational is the rate at which the technologies are becomingobsolete. As already mentioned, China is among the leading countriesin technological innovation. The high rate of technologicalinnovation implies that the rate at which the invented technologiesbecome obsolete is also high. A company may invest high financialcapital in what is considered the latest technology but within ashort period, the technology is advanced meaning the technologybecomes obsolete. Organizations thus suffer from huge losses becauseif they do not upgrade to the new technology, the quality andefficiency of their products and services reduces. The analysis ofthe technological factors shows that Marriott needs to consider therate at which technologies become obsolete before they incur hugelosses in systems that are not durable.

Anothertechnological factor present in the external environment is thepotential of new technological innovation. Businesses have realizedthat to overcome competition they should encourage high level ofcreativity and innovation among their employees. It generates uniqueideas and technologies that are not available in the market enablingthe firm to acquire a leading position in the industry because ofutilizing new technology. Marriott international may be adverselyaffected if they are not innovative. The company needs to encourageits employees to generate new ideas and support those who have theknowledge to generate new technology by providing them with theessential resources that they need for the development of thetechnology. The management should also ensure that they retain theirskilled employees by providing them with good salaries and motivatingthem. If the company fails to retain their skilled employees, itrisks being successful because it shall be difficult to keep up withthe new discoveries and innovation that is present in the Chinesemarket.

Technologicalplatforms contribute to the external factors that influence theoperations of Marriott hotel. There are technological innovationsthat are disruptive and pose major threats to the operations of abusiness. For example, technologies on how one can hack into acompany’s system are considered disruptive because it interfereswith the security system of an organization. Marriott internationalhas very sensitive information that they would not wish to be madepublic. The personal information of their customers all over theworld is required to be kept confidential. The firm needs to be keenon the technological platforms they venture into because it couldhinder their success in the Chinese market. According to the Chineseculture, they take a long time to trust business people and if thecompany messes their relationship with customers and otherstakeholders in the country then the organization shall not besustainable.

  1. SWOT Analysis

MarriottInternational as the global leading hospitality brand has managed tocommand a great customer base with its high rates of awareness. Eventhough this is true, the company’s venture into China will presentsome form of opportunities as well as threats. It is proper forMarriott to perform a concise SWOT analysis to ensure it maximizes onall the strengths and opportunities presented to them whilesimultaneously progressing from its weaknesses as well as threats.



  1. International presence helping company offset reliance risks

  2. Principal brand programs that help drive Marriot’s business development

  3. Loyalty platforms and commanding online presence aiding the company enhance customer satisfaction

  1. Marriot’s business model might insipid the brand perception limiting revenue growth

  2. Marriott International experiences backwardness with respect to the information and technology

  3. Shortage of low-cost lifestyle brands



  1. The United States government encourages tourism promotion initiatives

  2. The hotel expansion operations are likely to propel the top-line development of Marriott

  3. Individuated experiences

  1. Laws and regulation fluctuations may decrease Marriott’s profits or elevate its costs

  2. Extremely competitive and fragmented lodging industry

  3. Susceptibility to terror attacks promotes concerns with relation to safety and security

    1. Strengths
      1. International presence helping company offset reliance risks

MarriottInternational is amongst the primary players in the hospitality andlodging industry-earning revenues from emerging and matured markets.It`s reputable presence in the matured markets including the USAdirects the value development, whereas the emerging markets includingChina direct the volume development (Marriott International, Inc.SWOT Analysis, 2015). Due to the presence of the company globally, itis shielded from risks that are particular to a certain economy.Therefore, venturing in China will not influence much of its revenuein a negative direction due to its vast global presence.

      1. Principal brand programs that help drive Marriott’s business development

MarriotInternational has a commendable hotel brand portfolio classified intodistinct segments that appeal to different customer segments. Itsluxury segment includes three popular brands: Bulgari, TheRitz-Carlton, and JW Marriott Hotels and Resorts, while theupper-upscale includes Marriott Hotels and Residence Innextended-stay hotels (Marriott International, Inc. SWOT Analysis,2015). The upper-moderate contains brands such as SpringHill Suites,Courtyard, and AC Hotels, whereas the moderate-priced segmentincluded TownePlace and Fairfield Inn and Suites. There are alsoadditional segments that the company focuses on provided by theAutograph collection, Edition, and Renaissance Hotels. Besides, theyalso have Executive Apartments, which provide luxury services havingfive-star amenities among other facilities. The principal companybrand platforms, as well as, their escalating awareness amongst itstarget audience make Marriott International a well-known choice.According to Marriott International, Inc. SWOT Analysis (2015), thisenables the company has a competitive advantage over its rivals inthe hospitality industry with respect to customer options for lodgingaccommodations. Besides, this also aids the company maintain andretain a loyal target audience base across the globe.

      1. Loyalty platforms and commanding online presence aiding the company enhance customer satisfaction

Thecompany mainly focuses on regular customer loyalty programs includingThe Ritz-Carlton and Marriott Rewards (Marriott International, Inc.SWOT Analysis, 2015). Through this programs, the guest earn pointsthat are redeemable for stays with relation to most of the company’slodging operations, rental cars, airline tickets, and airline regularflyer service miles. In the year 2013, Marriott International managedto register above forty-five million members having fourteen brandsparticipating in the programs. These programs enable the companyretain repeat customers since they reward regular stays with theredeemable points, which attract free hotel stays along with otheradditional rewards, or even airline miles connected to any of the 36partaking airline programs.

Additionally,Marriott has a compelling internet presence. The company’s websitelabeled attracts approximately forty-four millionvisitors every month making it amongst the main online retail sitefound around the world (Marriott International, Inc. SWOT Analysis,2015). Marriott is the main hotel corporation in terms of grossmobile bookings, which include bookings made via tablets andsmartphones. In the month of November 2013, Marriott Internationalinitiated Mobile Check-Ins in North America along with other selectedglobal properties. Besides, the members of Marriott Rewards cansomewhat check in at virtually three hundred and fifty Marriot Hotelsvia their mobile appliances. Consequently, the compelling onlinepresence and loyalty programs encourage the Marriott Internationalcustomers’ base to set aside a sufficient proportion of theirtraveling expenditure into its hotels that ultimately improves on thecustomer satisfaction levels.

    1. Weaknesses
      1. Marriott’s business model might insipid the brand perception limiting revenue growth

MarriottInternational operates using a business model that focuses mainly onthe management of franchising of hotels instead of owning them(Marriott International, Inc. SWOT Analysis, 2015). In the month ofDecember 2013, the company operated 42 percent of the rooms in itshotels under management contracts, 55 percent of franchise contracts,and just 2 percent were company leased or possessed. When compared tothis, about 61.9 percent of the 2013’s total revenues were producedvia management and franchising contracts, whereas 38.1 per cent werefrom the company owned. With the focus on management and franchiseagreements, more steady earnings are established in times of economicsmoothness. Even though this is true, it lacks to provide much spacefor profit development. Besides, the profit generated from enticementfees, as well as, when the hotels attain particular profitabilitylevels depends largely on a particular country’s economicscenarios. Furthermore, franchising and management contracts maydilute the equity of a brand connected to the Marriott properties(Marriott International, Inc. SWOT Analysis, 2015). If theparticipants of the management or franchise contract with Marriottfail to deliver the expected quality that is linked to the company,Marriott’s reputation may suffer a negative turn. Although thebusiness or franchised framework presents a consistent and safesupply of income, it presents negativities that entail diluting theperception of the brand and limiting revenue development.

      1. Marriott International experiences backwardness with respect to the information and technology

Marriottlike many other global corporations understands the changing natureof the business marketplace because of globalization. They have seenthe customer demand for new technology and have attempted toincorporate them into the business. They have encouraged the use ofMobile Check-In systems allowing their customers to make onlinereservations (Marriott International, Inc. SWOT Analysis, 2015).Although these systems have effectively worked for them, the companyis still lagging behind in terms of the most current technologiespreferred by customers and utilized by other competitive companies.With respect to this, the company should conduct a thorough analysisrelating to innovation and technology usable in their form ofbusiness and update them accordingly to attract their customers. Ifthey do this, they can achieve customer satisfaction and this wayincreases their revenues further.

      1. Shortage of low-cost lifestyle brands

Thecompany presents a shortage in the low-cost lifestyle brands sectionwithin its brand product portfolio. Due to this, their customer baseis limited higher social classes consequently failing to acquire alarge market share.

    1. Opportunities
      1. The United States government encourages tourism promotion initiatives

Inthe United States, the travel and tourism service sector is amongstthe leading sources and sector relating to exports. Contrariwise, theUnited States market share relating to spending through globaltravellers decreased from 17 to 11 percent from the year 2000 to theyear 2010 representing a 30 per cent decrease with respect to itsglobal market share (Marriott International, Inc. SWOT Analysis,2015). The decrease was mainly attributed to fragmented globalcompetition, fluctuating patterns in international growth, and to anextent, more straining security needs to be enforced after the year2001. Due to the significance of the tourism and travel servicesector to the job development and economy of the United States, thegovernment decided to take variant initiatives. Due to this, therehas been a stable progress since the year 2010 after the launching ofthe National Export Initiative, as well as, the Travel Promotion Actregistered in the law (Marriott International, Inc. SWOT Analysis,2015). Additionally, in the year 2012, the United States governmentmade an announcement concerning its national strategy relating totravel and tourism. The announced national strategy placed a targetof increasing the international visitor numbers to the United Statesby 50 percent to a number of 100 million by the year 2021 (MarriottInternational, Inc. SWOT Analysis, 2015). If the number is attained,it will enable the government generates 250 billion dollars in yearlyexpenditures relating to exports and jobs. Therefore, the programsinitiated by the United States government to enhance tourism areanticipated to present Marriott International with more opportunitiesto grow.

      1. The hotel expansion operations are likely to propel the top-line development of Marriott

Marriottplans to expand the company presence in the diverse regions of theworld. According to Marriott International, Inc. SWOT Analysis(2015), Marriott International expects in the Asia-Pacific territoryto establish a hotel weekly across the associated ten distinctbrands, replicating in size, achieving a number of 330 hotels havingabove 96,000 rooms amongst sixteen countries by the year 2016(Marriott International, Inc. SWOT Analysis, 2015). Marriott also hasventured into African countries having presence in South Africa,Uganda, Tanzania, Namibia, Zambia, Malawi, and Nigeria, the MiddleEast, and Europe (Marriott International, Inc. SWOT Analysis, 2015).The expansion of the company across markets allows it to gainincreasing revenues meaning that the company still has room to growdue to its successes in the diverse regions.

      1. Individuated experiences

Thecurrent market is experiencing an increased customer demand withrespect to individuated traveling experiences. Due to this, MarriottInternational has gone ahead to establish distinct properties,services, and brands due to the potential of this particular sector.

    1. Threats
      1. Laws and regulation fluctuations may decrease Marriott’s profits or elevate its costs

Theoperations of Marriott are subject to vast laws, policies, andregulations in distinct jurisdictions worldwide including taxes, theenvironment, healthcare, and financial reporting (MarriottInternational, Inc. SWOT Analysis, 2015). The fluctuations of thesepolicies, laws, and regulations may reduce its profitability. Thesedifferent jurisdictions are prone to review taxes and otheradditional revenue-raising policies, regulations, and laws. Whenthese forms of changes happen, they could enforce new costs,restrictions, or prohibitions on the company’s present operationsreducing its revenues.

      1. Extremely competitive and fragmented lodging industry

Marriottfaces compelling competition as both a franchisor and lodgingoperator. The international and local market is crowded with multiplekey players in the hospitality industry. Due to the increasedcompetition, there are increasing price wars making the company’sluxurious brands lose their competitive edge consequently leading tolow opportunities with respect to market penetration (MarriottInternational, Inc. SWOT Analysis, 2015).

      1. Susceptibility to terror attacks

Thehospitality industry is influenced by threats relating to terrorattacks. Marriott, a representation of the United States of Americaluxury and power, is a major terrorist attack target (MarriottInternational, Inc. SWOT Analysis, 2015). The attacks launched at thecompany’s properties have exposed how vulnerable the hospitalityis. Due to the attacks, customers have lost confidence with respectto the security preparations at Marriott’s properties instillingfear and doubts amongst particular global customers. Consequently,they may lead to decreased check-ins in the Marriott Hotels affectingthe company’s operations and its ultimate reputation.

    1. Solution Strategies

MarriottInternational is experiencing some threats, which they need toimprove on to ensure they retain a commanding position in the Chinesemarket. To do this they must follow the solution strategies below:

      1. The assessment of primary competitors in the market

Accordingto Giurgiu &amp Borza (2015), this is the most critical element thatMarriott should use to manage the competitive threat. They shouldconduct an extensive assessment of their competitors especially inthe Chinese market and come up with strategies to enhance theiroperations to surpass that of the competitors.

      1. Improving on the product packages offered by Marriott

Marriottshould take up on this strategy once it has gathered all the datanecessary to outdo their competition (Giurgiu &amp Borza, 2015). Dueto the increasing competition, Marriot may find it appropriate toreduce pricings to an appropriate level to compete in the Chinesemarket. They should also fit their product packages with relation tothe Chinese target market.

      1. Reducing uncertainty with respect to finances

Marriotshould appoint a team that brings forth and implement productinnovations in preparation for any financial uncertainty (Giurgiu &ampBorza, 2015). Through this, the company can forecast ahead and setrealistic goal expectations, which will make them strive to achievethem.

      1. Establishment of an environment meant to promote the company’s future growth

Marriottdespite its current success must strive to improve businessdevelopment by rethinking their business strategy in China instead ofmerely maintaining their market segment (Giurgiu &amp Borza, 2015).Therefore, Marriott International may acquire its competitor’scustomer base by offering sophisticated products and additionalintangible benefits.

  1. Competitor Analysis

Themost successful companies worldwide remain at top positions sincethey effectively manage to keep their competitors under close watch.Therefore, the more Marriott International understands thecompetitive threats that Jin Jiang International presence in theChinese market, the more they will develop strategies enabling themto attain a proper position in the market.

    1. Competitor Profile
      1. Overview

JinJiang International was fashioned in the month of June in 2003 out ofa Shanghai New Asia and Shanghai Jin Jiang Holdings merger Jin JiangInternational (2015). The company is the largest hotel chain inChina. Jin Jiang International owns and manages 493 hotels, whichinclude the Jin Jiang Inn and Shanghai’s Peace Hotel that functionsin the hotel sector economy. It is placed 13th amongst the main hotelcorporations and the highest positioned Asian organization (Jin JiangInternational, 2015). The corporation is classified into sixgroupings: finance, real estate, travel, trade, hotels, andtransport. Within the traveling group, Jin Jiang manages five travelcorporations having about 7,000 cars and taxis for hire.Consequently, it provides an important side-service in addition tothe hotel businesses, which allows attain dominance within theShanghai region, where the company is headquartered. The company hasfifty hotels within the pipeline that consist of balanced mix amongstoperations/owner and franchising collaborates (Jin JiangInternational, 2015). The organization aspires to establish above 600Jin Jiang Inn throughout China before the year 2010 ends. The companyhas embarked on expanding into the North American markets althoughthey emphasize on maintaining their Chinese market share.

Theorganization is also planning to emphasize on retaining and in someinstances expanding their strategic partnerships with primaryhospitality organizations, which include Hilton, Sofitel, Marriott,and Intercontinental. Besides, Jin Jiang International is activelyparticipating in tourism partnerships including establishing LesRoches Jin Jiang International Hotel Management Collage (Jin JiangInternational, 2015). The upcoming hotel in the year 2013 is LiangduJin Jiang Hot Springs Hotel found in the Southern area of Guizhou andYangzhou, a five-star hotel to be located in Jiangsu province.

      1. Competitive advantage

JinJiang International’s competitive advantage relates to their vastpresence and widespread network across the Chinese market presentingthe travelers a convenient and worthy option with respect to anindividual’s status in China and across its border. Additionally,the company’s hotels are appropriately attuned to unique stylesrepresenting the culture of its actual location. The decorations inthe rooms are individual to every property leaning near classicalluxury. Jin Jiang International has multiple large properties havingvariant rooms located in the landmark buildings. These landmarkbuilding have a sense of history and heritage while some are recentlyconstructed. Lastly, Jin Jiang International is a Chinese basedcorporation having deep Chinese cultural roots. The corporation’shistory can be traced back into its initial property, Jin JiangHotel’s five-star heritages found in Shanghai’s previous FrenchConcession. Due to the cultural connection with China, Jin JiangInternational enjoys loyalty from the Chinese people since it knowsthe needs of its people when compared to Marriott International. TheChinese Confucian culture advocates for unity hence it is normal forthe Chinese people to show loyalty towards their own company.Therefore, this is amongst the most significant competitive advantageof Jin Jiang International.

    1. Marketing Profile
      1. Target Market

JinJiang International serves as a Chinese premier hospitality owner,conglomerate, operator, and hotel developer across every marketsegment targeting all sorts of social classes. The company hasbusiness across multiple segments that target different types ofcustomers. The company manages to target customers who are wishing toenjoy both premium and average services. The company targetscustomers willing to own homes through presenting them with choicesfrom their real estate portfolio. They also target both the local andinternational tourists visiting China in an aim to make them enjoythe rich Chinese culture that the company represents. It also offersproducts to customers seeking accommodation for a couple of days.They also offer services to customers seeking to dine in theirrestaurants, as well as, conduct meetings and banquets. Looking atthis, the company has strived to have a service that all customersegments can enjoy within the Chinese market having their propertiesin medium-sized and large Chinese cities ranging from the premiumfive-star hotels to economic Jin Jiang Inns.

      1. Market Share

TheChinese hotel industry started to experience slight recoveries fromthe year 2010, which has consistently improved to date. The Jin JiangInternational Corporation is the primary operator in China within thedomestic platforms and owns about two hundred hotel facingcompetition from Accor managed hospitality hotels such as Sofitel,Ibis, and Novotel among other companies (ref). It managed to acquirea huge market share of China due to a prior government restrictionwith respect to foreign investors in the country.

      1. Marketing Strategies

Uncertaintiesin the international economic recovery, organizational oversupplywithin the hotel industries, local macroeconomic developmentslowdown, and increased rate of information technology developmentwith respect to the internet continues to influence Jin Jiangprincipal businesses. To deal with these uncertainties, the companyshould strive to establish appropriate marketing strategies.According to (ref), marketing strategies are essential componentsthat enable a corporation operate and grow in any industry. Itmanages to give a company clear directions ensuring it gains maximumrevenues through utilizing lower costs. Additionally, the companyshould seek out a strategy that enables them improve on their primarycompetitiveness and management standards, improve their domestic andglobal deployment, and enhance their multinational operationactivities. They can do this through, learning from foreign partner’sexperiences and expertise, and establishing global businesses whileintegrating overseas experiences into their local operations. Due toreforms introduced relating to state-owned businesses, Jin Jiang hasmanaged to make reforms of its own concerning regimes and mechanismsinvestigating business model’s modification and innovation alignedwith the current internet economy. They will do this whilesimultaneously optimizing their target market-based incentivemechanisms and remuneration regimes.

    1. Product Profile
      1. Product Presented

JinJiang presents a broad variety of product packages to their differentmarket segments within China. These product packages range from thehigh-end five-star hotels to the economic Jin Jiang Inns as seen inthe table below

Table1: Jin Jiang International Products


Jin Jiang Inn


Jin Jiang two star hotels

Jin Jiang Inn


Jing Jiang three star hotels

Heritage Hotels


Jing Jiang four star hotels

Heritage Hotels


Jin Jiang five star hotels

Heritage Hotels

Sourcedfrom: Gu, Ryan &amp Yu (2012)

JinJiang International owns special hotels under the name Jin JiangHeritage that have a vast historic hotel selection of propertiesfound in Shanghai. These hotels mainly have long and captivatinghistories that tend to attract people. The company’s five-starhotels are situated in the large and big coastal cities such asShanghai and Beijing, although they can also be found in regionalcities including Tangshan and Handan (Hung, 2013). The company’sthree-star hotels are made ideal for the middle to upper businessranges and leisure travelers. They mainly emphasize on the facilityand locational conveniences offering ample entertainment and diningoptions in an effort to satisfy the differentiated needs of theircustomer segments.

Jin Jiang


Cities Situated

Location in Shanghai

Jin Jiang Inn

Above 320



Two star hotels




Three star hotels




Four star hotels




Five star hotels




Heritage hotel




Sourcedfrom: Jin Jiang International (2015)

JinJiang Inn as an exception, all other Jin Jiang International Hotelsranging from the five-star luxury hotels to the economy two-starhotels utilizes similar images and brands. Moreover, most hotels havedifferentiated names that fail to incorporate Jin Jiang, and theyinclude Wenzhou Dynasty Hotel, Park Hotel, and Nanjing Road (JinJiang International, 2015).

      1. Pricings

JinJiang International manages to initiate customer satisfactory pricingrates under the provisions of special prices, discounts, and leasingamong others to allure their customers into engaging with theirproducts (Hung, 2013). Therefore, the company places more emphasis oncustomer pricing concerns. For instance, the company’s The VillarHouse located in the ever-changing entertainment and business area ofShanghai manages to allure more tourists that are international. Inagreement with Hormby etal.(2010), Jin Jiang initiates pricing promotions on May 1, 2009,related to this hotel, which included staying at the hotel for threenights at a price of two nights. Additionally, this has been thetrend of Jin Jiang’s pricing strategies, which include offering twonights for a pay of one, offering two nights plus a free candle litesuper, or offering five nights plus a free participation pass totheir food festival. Besides, Jin Jiang has not set up a professionaltask team to handle issues relating to their pricing strategiesthese are mainly left to the managers situated in the company’smarketing department.

    1. SWOT Analysis
      1. Strengths
  • Jin Jiang has managed to maximize the Chinese ever-growing local and international market with a flourishing middle-class by aligning their business with the rich Chinese culture and offering a unique style of service to its customers (Hung, 2013).

  • Their Heritage hotels have enabled the company attracts many tourists since they are intrigued with the History of China

  • The Chinese government has extensively supported the company ensuring that they acquire investment as well as large-scale assistance from the state that include the accommodation and travel infrastructure development along with a widespread marketing campaign. According to Gu, Ryan &amp Yu (2012), through this campaigns, Jin Jiang has managed to attain more customer attention hence increase their revenue.

      1. Weaknesses
  • The Jin Jiang International high hotel pricings may not attract some of the regional and local tourists who would prefer going to cheaper offering hotels offering somewhat similar services (Gu, Ryan &amp Yu, 2012).

  • Since the company mainly emphasizes in the rich Chinese culture, they employ employees having a minimal command of the English language especially in the main Heritage hotels (Hung, 2013). Due to this, many of the western cultures may feel left out consequently hindering some of the potential visitors arising from the Western countries from exploring their hotels and opting for those that incorporate their cultures.

  • The government has placed visa restrictions in accessing the country (Hung, 2013). Due to this, Jin Jiang suffers from these restrictions, which result in hindering some of the company’s potential customers having the need to explore the hotel and enjoy the unique experiences.

      1. Opportunities
  • Jin Jiang International will benefit from the relaxation of the regulations of visas since it will see an increase of foreign visitors into China (Gu, Ryan &amp Yu, 2012). Particularly, there will be the alluring of short-term tourists wanting to enjoy the primary cities such as Beijing and Shanghai where the company holds a majority market since they are primary regional transitional hubs with respect to the Asia Pacific.

  • The company is enjoying the ongoing initiative of the government to improve the country’s infrastructure (Hung, 2013). The benefits Jin Jiang will register will be in terms of improved accommodation and transport sectors ensuring that their hotels, no matter how far they are, are accessible to everyone.

  • The company has acquired opportunities to learn from other foreign companies who have had more experience in the business. Due to this, they have been able to review their strategies and increase their competitive edge in the market.

      1. Threats
  • The increased liberalization of the market opens up the Chinese tourism industry to foreign investments. With this, the market has received an increase of foreign competitors in the market with more experience and prowess in the industry (Gu, Ryan &amp Yu, 2012). Jin Jiang, therefore, faces stiff competitions from these companies, which it should strive to counter.

  • The company’s headquarters is located in Shanghai, China, which is amongst the major cities of the countries. It is noted that such major cities are heavily infested with air pollution that may deter potential travelers from seeking accommodations in their hotels.

  • The company operates at the heart of regional security stresses specifically with South Korea and Japan (Hung, 2013). These tensions may influence the incoming travel thereby harming the revenue of Jin Jiang International.

  1. Goals and Strategies
    1. Goals
  1. To increase the revenue generated by the company by 5% within the first year of operation

  2. To acquire a large market share in the China market by at least 50% after the first year of operation.

  3. Align the company with the needs and cultural values of the Chinese so that it may achieve localization after six months of operation.

    1. Strategies
      1. Studying the consumer habits

MarriottInternational can increase the revenue the company generates bystudying the consumer habits of the target customers. Understandingconsumer behavior of customers is important since it enables themanagement to learn the factors that influence the consumers topurchase a certain product. There are different consumers groups inChina that Marriott may need to understand when developing theirstrategies of increasing revenue for the company. China has differentconsumption groups that vary based on age. The Chinese consumers, whoare above 55 years old, were born during tough economic times (Qiu,2011). They managed to get little or no education, and they worked ingovernment enterprises. The tough conditions that they grew up ininfluenced their spending habits since they are sensitive to theirprices they pay for goods and services. They also prefer to savemoney for using in future because they did not have a reliable sourceof income. The Chinese between 45-55years old were brought up duringthe period of Cultural Revolution. They could easily find jobs fromthe state-owned enterprises, foreign companies, or private companies.The individuals earned high income that enabled them to save moneyfor caring for their families. They are also conscious whenpurchasing products and services since they ensure that they spendmoney on quality services so that they can get the value for theirmoney.

Anotherage group consists of individuals who are in their thirties. Unlikethe elder generation who did not access a systematic education, theyounger consumers were more privileged to be more educated and raisedin a more open environment where the economy is more stable.Therefore, their spending habits are not focused on the prices butthe value and the quality of the service and product. They are alsomore willing to spend rather than save money. Another customer groupin the Chinese economy are individuals who are in the twenties agegroup. This customer group is willing to spend whatever cash comestheir way. They are not savers but impulse buyers who preferhigh-quality products that distinguish them from others. The lastcustomer group consists of individuals who are below the age oftwenty. They include customers who were born in the technological eraand were westernized hence, their individualistic culture. Theymostly purchase their products and services online, and they rely ontheir parents and guardians income.

Ananalysis of the consumer habits of the Chinese is an appropriatestrategy that Marriott International can adopt to increase itsrevenue. For instance, it is evident that the older generation aremore focused on prices while, the younger generation are focused onthe quality of the services they receive. Therefore, to increase therevenue earned by the company, the management needs to implementpricing strategies that ensure the prices the older generation inChina are charged, are lower as compared to those charged to the newgeneration. The company also needs to ensure that they providehigh-quality services to the Chinese, especially to the newgeneration consumers. Addressing the factors that influence customerhabits shall encourage the customers to seek the services of thehotel thus increasing the amount of revenue. The limitation of thestrategy is that if more economic or political changes occur inChina, the company may have to set new strategies to achieve itsgoals. The management needs to ensure that their strategies areflexible.

      1. Differentiating the company in the hospitality industry

Thedifferentiation is another strategy that Marriott International canuse to achieve the goal of increasing its market share. Thedifferentiation is an appropriate strategy that involves specializingin a specified area in the business. Differentiation allows abusiness to offer unique services to the target customers thatincreases their value and improves their perception of the business.According to Porter’s generic strategies, a firm can increase itsprofitability by applying cost leadership, focus and differentiationstrategy (Sehgal, 2011). Porter argues that the differentiationstrategy is strength to a business because the value added to aproduct by its uniqueness limits other consumers from easilyaccessing substitute services in the industry. For instance, MarriottInternational provides products that range from hotels, beachresorts, vacation rentals, luxury clubs, international locations, andMarriott Hotel merchandise while other companies offer similarproducts such as hotels and the beach resorts making it easy for thecustomers to access easily substitute products. However, if thecompany makes their product unique, it shall be able to achieve thedesired market share of the Chinese market.

Differentiationof products and services can be achieved by encouraging creativityand innovation among the employees. Encouraging creativity andinnovation can result in the company obtaining unique ideas that theycan implement in their operations and achieve differentiation. Forinstance, workers obtain a wide experience and feedback fromcustomers regarding service delivery to the company. The experienceequips them with knowledge, and when they are requested to brainstormin the organization, they can provide reliable ideas that can helpthe company to achieve product differentiation and acquire a largemarket share.

Strengtheningand creating better relationships with customers is also another waythat a company can increase its market share. A company can createvalue for the services offered to consumers by focusing strengtheningthe way they relate to their customers. Relationships with customerscan be enhanced by maintaining a connection with the customers. Aconnection can be maintained through adapting effective communicationchannels and strategies with the customers. For instance, whencustomers enquire about the services offered by the company, thestaff can use polite and welcoming language such as, “Welcome,sorry and we apologize” depending on the nature of theconversation. Alternatively, the management should ensure that theyrefer to their customers using their name as it indicates that thecompany values their customers.

Additionally,with the high rate of technological innovation, there are moreefficient communication platforms that Marriott International can useto enhance their relationships with their customers. The managers canuse social media to maintain contact with their customers and toaccess more potential customers. Relationships can also bestrengthened through networking. Networking is beneficial to anorganization because it allows the stakeholders to exchangeinformation and share ideas that can lead the company towardsachieving the set objectives. It shall help Marriott International toincrease its market share because networking allows the managementobtains more information on the hospitality industry in China.Besides, establishing a strong relationship with the clientsconvinces them to believe in the products and services of thecompany.

      1. Offering complimentary services and building brand loyalty

Offeringcomplimentary services involves providing free additional services toconsumers to ensure that their needs are met beyond theirexpectations. Marriott International can increase its market share ifthey offer complimentary services to their consumers. Examples ofcomplimentary services include offering free Wi-Fi to those whoaccess the services of the hotel or offering free fitness services.Complimentary services tend to create value for the services and theprices charged to customers by the company. Normally, when customersare looking for hospitality services, they consider factors such asquality, prices, security, and convenience among other factors.However, when they discover that a company satisfies their needsbeyond their expectations, they are likely frequently to seek theservices of the company. Providing complimentary services can alsolead other customers to recommend the hotel to their friends andfamilies because of the satisfaction that they get from the company(Camillo, 2015). It is evident that if Marriott International offerscomplimentary services to customers, they shall increase thecompany’s market share in China.

Brandloyalty is also another strategy that Marriott International can useto increase their market share in the Chinese. Marriott InternationalCompany is said to be among the leading companies in the hospitalityindustry. The company can take advantage of its excellentinternational performance and influence the perception of theircustomers in China to become loyal to the Marriott brand. Brandloyalty can be achieved if the company convinces its potentialcustomer that their products and services are more appropriate thanthose that are present in the market. Marriott can achieve brandloyalty if they focus on satisfying the different needs of theircustomers across the various market segments.

Thestrategies for building brand loyalty that Marriott International canuse to increase its market share include value proposition. Itinvolves setting targets in the market that the company works towardsachieving within a specified timeframe. The targets are set based oninformation obtained from the market research and perceptions of thecustomers regarding the services and products they are getting fromthe company. Brand loyalty can also be achieved if the companyinvolves its stakeholders and engages in all steps of the brandstrategy process. Stakeholders focus on the interest of theorganization, and thus they make decisions that shall have a positiveimpact on the business.

TheChinese economy is known to have undergone a rapid change since the1960s, and the evolution has had a great impact on their spendinghabits. Marriott International may invest in different businessapproaches that are aimed at achieving brand loyalty but still failto acquire a large market share. Alternatively, the company mayrealize that the market share is not constant over time. It isimportant for the management of the company to understand thatChinese are usually not loyal to brands. The argument is based onseveral surveys that have been conducted in China that were aimed todetermine how loyal the Chinese are to various brands. It wasdiscovered that the low level of brand loyalty between the Chinesearises from the high rate of technological innovation in the countrythat has greatly influenced the quality and quantity of products andservices in the country. However, Marriott can still manage toestablish brand loyalty among their customers if they update theirservice delivery standards to match with the current marketstandards. The marketing department of the company must be keen onwhat is happening in the hospitality industry so that they ensurethat the company remains consistent, and the services they provideare relevant to the market needs.

      1. Incorporating the local culture in the company’s operations

Localizingthe company is among the goals that Marriott International is workingtowards attaining to achieve success in the Chinese market. Thelocalization strategy that the company can adopt is incorporating thelocal Chinese culture in the operations and delivery of the services.Customers are usually pleased when they access service that they canassociate themselves. For instance, the management can serve bothlocal and international menu in their hotels. The local people arequite conservative of their culture especially in their mode ofdressing, behavior, and food. Although westernization is influencingtheir traditional culture, Chinese are still practicing some aspectsof their culture in the operations of their business. MarriottInternational can achieve localization by studying the local culture.There are some cultural practices that are shared across cultureslike shaking hands, but the meaning derived from such practices maydiffer across cultures. According to the American culture, shakinghands is a greeting that is used by people as a sign of welcome orwhen an agreement has been reached. On the contrary, Chinese preferless body contact hence, they bow to one another as a form ofgreeting. Integrating such cultural practices in service delivery atMarriott enables the company to achieve cultural practices.

Thelocal culture can also be integrated into the company by decoratingthe rooms using the traditional theme and decorating the walls of thehotels and resorts using the Chinese theme. Therefore, when the localcustomers visit the company, they can comfortably relax and enjoytheir stay at the company’s hotels. Integrating the local cultureinto the operations of the company is beneficial because it changespeople’s perception of viewing the company as a foreign entity. Italso enables the customers to see that the company is committed toaddress their needs and wants by understanding their way of liferather than sticking to their foreign American cultural practices. Itimplies that the company is diverse as they are ready and willing tounderstand other different cultures.

Anotherstrategy that the company can use to achieve the goal of localizationis incorporating the local culture in the human capital of thecompany. Human capital refers to the employees who have been hired tooffer service to customers and manage the operations of the company.The workers tend directly to interact with the customers thus theyare an image that reflects the quality of the services delivered bythe company. For Marriott International to achieve localization, itcan hire local citizens to work in the firm. Local employeesunderstand their culture and language, and it shall be easier todeliver better services to their customers. Hiring local employeesallows them to work with the foreign workers within the company. Theyget to share information and exchange ideas that increase theproductivity of the organization. Therefore, when the company ishiring, the management should look for people who understand andpractice their culture. Most of the young populations have beeninfluenced by Westernization, which makes it difficult for them fullyto understand their traditional culture. During the recruitmentprocess, the management may look for individuals who embrace culturaldiversity so that they can be willing to learn about other cultureswhile at the same time teach other people their own culture. Thedisadvantage of incorporating the local culture in the operations ofthe company is that it may take the company to adjust to the newcultural changes in their operation. Besides, incorporating the localculture might increase the level of competition that the companyfaces from other organizations within the hospitality industry.

MarriottInternational can also localize the company by integrating the localculture in its marketing strategy. Marketing strategy refers to theprocedures used by the company to create awareness about theirproducts and services to the consumers. The firm can localize itsoperations by ensuring that the adverts and service awareness theypresent to the public does not reflect the American culture but theChinese culture. Example, the company advertises most of theirproducts over media channels such as television, newspapers,magazines, and radio. They could dress the people in the advert inthe traditional Chinese clothing to reflect the local’s traditionalmode of dressing. The marketing strategy is an appropriate way of thecompany to achieve localization as it helps in promoting the localculture rather than the Western culture that most people believe hasa negative influence on the younger generation.

MarriottInternational can also incorporate the Chinese culture into theirmanagement by associating with hospitality schools in China. Marriottcan be donating funds to the school and supporting students who arepursuing hospitality courses by providing them with internshipprograms to advance their skills and knowledge. Cooperating with ahospitality school in China shall enable the management to understandthe skills taught to those who wish to pursue a career in thehospitality industry. The strategy is also beneficial because itshall enable the management to determine the skills to look for inindividuals when hiring and recruiting the local employees. Thestrategy shall also enable the company to be localized because thecompany shall be directly interacting with students and professionalsin the hospitality industry. The students are the future of thehospitality industry and by associating with them from when they arebeing nurtured into professionals, the organization shall have aclear direction of where the hospitality industry in China isheading.

      1. Embracing centralization

Thereare different systems of governance in an organization:centralization and decentralization. Under the centralized system ofgovernance, power is concentrated at one point while indecentralization power is distributed across directors and seniormanagers. The most appropriate system of governance that shall enableMarriott International to achieve localization is centralization.Centralization shall require the company to establish a common officein the local area such that all issues that affect the company in thedifferent parts of the country can be addressed from the specifiedarea. Customers are aware that of they visit the central offices alltheir needs shall be addressed. The centralized office also helps inachieving localization because all the feedback from customers andthe arising needs shall be addressed from the central point.Centralization is an effective strategy for achieving localizationbecause, with the modern technology, the world has become a smallerplace where everyone can easily be contacted. Centralization shallalso help the managers to understand the root problems that theircustomers in China face and thus develop appropriate solutions beforethey get out of control. Businesses are advised to think global butact locally because they enjoy more benefits when acting locally.

Thestrategy of centralization also allows Marriott International to seta common mission, vision, goals and objectives that guide theemployees to the desired direction. Setting common objectives enablea company to attain localization because similar leadership model,organizational culture, and language shall be used to managing theemployees and delivering service to consumers. Centralization shallenable the local managers to serve as role models for theinternational managers because if they were capable of leading theorganization to the global market, their skills, and knowledge mightbe helpful in becoming successful in China. Centralization equips theorganization with the knowledge that they can apply in managing theoperations of the hotel in the local market such as China. The maindisadvantage with the centralization strategy is that thedecision-making process is slow especially where rapid or spontaneousdecisions have to be made in the company.

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