Term Paper on "International Strategic Management in the Service Sector"

Term Paper 12 pages (3460 words) Sources: 1+

[EXCERPT] . . . .

International Strategic Management in the Service Sector

International Strategic Management: Hospitality Service

This work will demonstrate the proposition that "success for any business is dependent upon the ability to find a valuable strategic position." Further this work will be applied to a hospitality organization and use this theoretical statement to critically challenge the performance of the organization and will further through a case study apply the principles and processes to explain the critical approach..

Marriott International, Inc. celebrated its 75th birthday in 2002. The leading hospitality company on a worldwide basis is able to trace its heritage to a beer stand operated by J. Williams and Alice S. Marriott. Presently Marriott International has over 2,700 establishments and over 490,560 rooms in the establishments both in the United States as well as in 69 other locations in foreign countries and territories. Marriott International owns more than 12 different brand hotels from top to bottom scale lodging accommodations.

An article focused on Marriott International, Inc. states that 75 years ago core values were established by the Marriott family that have "served our company well and will continue to guide our growth into the future." The ultimate core value of the company is a long held belief that "associates are our greatest assets." The article sates that there is in existence a way of providing to the customer and community which has been coined as "The Marriott Way." Interviewee, LJ Lindsey states as a former employee of The Marriott International says it is indeed true that the Marriott has "A superior and individual rendering of customer and community service unlike the run-of-the-mill generic company in the hospitality industry.

When reading the financials Marriott International, Inc. (NYSE:MAR) will symbolize the stock information on the New York Stock Exchange. Headquarters for the Marriott International Inc. is 10400 Fernwood Road located in Bethesda, Maryland. Marriot International is overwhelmingly the number one lodging company throughout the world claiming approximately 2,600 owned or franchised properties in the approximate number of 65 countries. Hotel formats are that of Marriott Hotels & Resorts, The Ritz-Carlton and Renaissance Hotels & Resorts all full-service establishments. The select-service lodgings are that of Courtyard, Fairfield Inn, SpringHill Suites and extended-stay lodgings are that of Residence Inn, TownePlace Suites and Marriott ExecuStay. Also operated are time-share properties which are the Marriott Vacation Club International and Marriott Grand Residence Club. Approximately sixty-five percent of the company's revenue is derived from its full-service hotel business.

Recent Company News:

A December 28, 2004 news report states that Marriott's Royal Garden Resorts stated that the JW Marriot Phuket Resort and Spa as well as the Anantara Royal Coco Palm Resort and Spa were affected by the December 28, 2004 earthquake and following Tsumani. Further the report stated that:

"Minor damage was suffered by the JW Marriot Phuket Resort while damages were still being assessed at the Anatara COCO Palm Resort and Spa. [(28 Dec 2004) "Impact of the Earthquake" (amendment shareholding structure)

Fortunately the Marriott International is a company that is resourceful and in spite of the recent rise in stock prices the company did not go lax and therefore was prepared even when the gears were smoothly turning and will recover well from the unexpected disaster. Marriott does not take success for granted and acknowledges that "they cannot let their culture of resourcefulness wither when the economy is healthy." (International Data Group) A strength which has given Marriott a competitive edge over competition in the industry is a strategic plan such as the combined initiative with Travelocity in which the two companies signed a hotel pricing agreement that states that the "total price of a Marriott Stay, including taxes, would be known to the customer at the time of booking." (Executive B& C. Inc.)

The report online at Executive B& C. Inc. states that:

"Travelocity has also proven its advantage over competitors by offering the best values at the lowest prices possible. While trying to meet their customers' needs at the lowest costs, Travelocity and Marriott International Inc. signed a Hotel Total Pricing agreement in which the total price of a Marriott Hotel stay, including taxes, would be known to the customer at the time of booking. This is a first time agreement for Marriott who has never previously had a partnership with an online travel agency (Goldstein, 2003). Through this alliance Travelocity's customers will be better informed and a better informed customer is a satisfied customer. This partnership will thus lead to higher customer satisfaction, which is a top priority for the company, "Our partnership with Marriott is designed to make the travel experience faster and easier for all involved," said John Stow, president of Sabre Travel Network: With the proliferation of various taxes and surcharges, determining the true price of a hotel stay can become a confusing process for many travelers. Hotel Total Pricing is a great productivity tool for travel agents, and alleviates a point of frustration for both the hotel and the traveling public..." (Goldstein, 2003)

In an Online profile of the Marriott International, Inc. stated is the fact that the culture at the Marriott is one in which:

"We do whatever it takes to provide our associates with the utmost opportunities, and our customers with superior service."

The "Marriott Way" is built on fundamental ideals of service to associates, customers and community. These ideals serve as the cornerstone for all Marriott associates fulfilling the "Spirit to Service."

According to the Online Profile of Marriott International, Inc. Marriott was named one of the "100 Best Companies to Work For," and one of the "Top 50 Companies for Minorities." Further ranked by the NAACP as #1 in the annual industry report Marriott was also ranked by Latino Style Magazine ranked Marriott as being one of "The Best 50 Companies" for Latinos to work for in the U.S. As well as being declared one of the "Best Companies for Working Mothers" by Working Mother Magazine

Stated as well are the following three factors in focus at Marriott International Inc.:

"The Spirit to Serve our associates":

1. The unshakeable conviction that 'our people are our most important asset.'

2. An environment that supports associate growth and personal development.

3. A home-like atmosphere and friendly workplace relationships.

4. A performance reward system that recognizes the important contributions of both hourly and management associates.

5. Pride in the Marriott name, accomplishments and record of success.

6. A focus on growth -- managed and franchised properties, owners and investors.

"The Spirit to Serve our Customers":

1. A hands-on management style, i.e., "management by walking around."

2. Attention to detail

3. Openness to innovation and creativity in serving customers.

4. Pride in the knowledge that our customers can count on Marriott's unique blend of quality, consistency, personalized service and recognition almost anywhere they travel in the world or whichever Marriott brand they chose.

Finally the profile states:

The Spirit to Serve our Community:

Demonstrated everyday by associated and corporate support of local, national and international initiatives and programs.

A strategic analysis is needed to gauge the reality of the superior claims made on the part of Marriott and others to validate the numbers and the reasons why Marriott has gained success in the hospitality industry.

Strategic Analysis:

Resiliency is a word that can be used in definition of Marriott International, Inc. And indeed of any survivors of the incident occurring on September 21, 2001 according to Dr. Stephen E. Campbell who writes that after 911 the "consumers were afraid to vacation, therefore restaurants and related businesses were forced to lay off workers. Suppliers were not paid and the domino effect devastated this proud industry. Hardest hit was travel and tourism in the United States and abroad." Campbell (2003)

. There are reasons why some in the industry are more successful of others in terms of properties owned, growth rate booking rate on lodgings and in all other aspects. According to Hesham Z. Al-Sabbahy, Ph.D. researcher and associates Yuksel Ekinci, Ph.D. And Michael Riley, Ph.D., at the School of Management Studies for the Service Sector, University of Surrey in their work entitled: "An Examination of Perceived Value Dimension in the Hospitality Industry" there are two factors in "Perceived Value" in the hospitality Industry which are:

Acquisition Value: This is the 'perceived net gains associated with the product or services acquired in consumption'. Sabbahy et al. (2004)

Transaction Value: Difference between the customer's "internal reference price and the price offered within the context of a special deal or price. Sabbahy et al. (2004)

When considering the Acquisition Value the positive influence is expressed in terms of the benefit of the product and the negative influence is expressed in terms of acquisition value in the costs of obtaining the product.

Diversification in the Industry:

Reported on December 20, 2004 was that Marriott's price had hit a new 52-week high of $63.99. Yahoo Finance (2004) Marriott International's five business segments which are as follows:

Full Service Lodging

Select-Service Lodging

Select-Service Lodging

Extended-Stay Lodging

Timeshare and… READ MORE

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