Marriott International - Case Study Example

Marriott International (MAR). INTRODUCTION It is known that every organization’s primary purpose is to stay in business, so that it can promote the stability of the community, generate products and services that are useful to customers, and provide setting for the satisfaction and growth of organization members (Juran, 1969; Ishikawa, 1985; Deming 1986). In this regard, quality strategy if executed appropriately can make the company prosper not only through increased number of customers and the greater possibility eventual gained customer loyalty but also in fostering ideal working environment within the business organization. The American Society for Quality defines the hotel industry as the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs (Hessan and Whiteley, 1996). This suggests that the company should be able to deliver, meet or exceed the expectations, needs and requirements of the customers through its services and products. The product or service offered should be able to perform the functions it was deigned to carry out (performance) as well as the quality of the said performed functions. Most customer-driven companies at present apply the notion of return on quality confirming that the qualities they offer is the quality the customers want (Larson, 1999, pp. 32-35). Marriott International is the 89th best company to work for according to Fortune Magazine. One reason is that the company continues to expand both within the United States and in the international hospitality industry. Also, its 2005 annual revenue of $11.550 billion can easily entice a person to apply for a job in Marriott International. The following paragraphs explain what Marriott International stands for. Company Profile Marriott International Incorporated New, located in 10400 Fernwood Road, Bethesda MD 20817 was organized as a corporation in Delaware in 1997. Its current headquarters is located in Washington D.C. The company generated around $11.550 billion revenue in the year 2005 alone. It had become a stock exchange listed public company in 1998. The company is involved in the business world as a worldwide operator and franchisor of hotels. It also focuses on related lodging facilities (Zeithaml, 1990). Basically, it operates a worldwide chain and franchises of 2,741 hotels and related facilities. Its hospitality operations are segregated into five business segments of Extended-Stay Lodging, Timeshare, Full-Service Lodging, Select-Service Lodging, and Synthetic Fuel. In its well known lodging business, it develops, operates and franchises using thirteen different brand names in sixty seven countries and territories. Also, Marriott International has been operating and developing Marriott timeshare real estate properties under four popular brand names. The Company generates income coming from base, incentive and franchise fees based upon the terms of its management and franchise agreements. Hospitality sales are also coming from the many sources associated with the companys Timeshare segment such as selling timeshare intervals and personal residences and also operating the resorts and financing customer purchases of timesharing intervals. Additionally, the Marriott International earns money from the limited number of hotels it owns and leases. The company produces revenues and generates tax credits from its synthetic fuel operations. Clearly, Marriott can be described as a diversified hospitality company (Harrison, 2005). It operates in five business segments of Full-Service, which includes Marriott Hotels & Resorts, The Ritz-Carlton, Renaissance Hotels & Resorts and Bulgari Hotels & Resorts; Select-Service, which includes Courtyard, Fairfield Inn and SpringHill Suites; Extended-Stay, which includes Residence Inn, TownePlace Suites, Marriott ExecuStay and Marriott Executive Apartments; Timeshare, which includes the development, marketing, operation and sale of timeshare, fractional, and whole ownership properties under the Marriott Vacation Club International, The Ritz-Carlton Club, Grand Residences by Marriott and Horizons by Marriott Vacation Club brands; and Synthetic Fuel, which includes the Companys interest in the operation of coal-based synthetic fuel production facilities. As of December 31, 2005, Marriott had in its payroll, an estimated one hundred forty three (143,000) employees. Marriott has been successful in all its hospitality undertakings. Companys philosophy or goals (mission statement). Marriott International has been consistent in implementing its mission statement. Its mission is to 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 Serve." (Zeithaml, 1990). This is the main reason why the hotel has grown in leaps and bounds in both number of hotels and in number or employees employed. Company Analysis What it is doing now. Marriott International is now repackaging its image and services to better serve its current clients as it entices untapped new markets to patronize their rooms and other amenities. Marriott proclaimed in Washington DC, that it is now on the path in rolling out its new spirit(Robbins, 1998). This spirit is grounded on its guiding mantra "the way hospitality acts not just looks". Furthermore, Marriott International is now moving beyond its current hip hotel design with its "Spirit To Serve Our Guests,". This is a new program that takes Marriott International’s personalized service to the higher plane of service. It has gone a long way on its mission to pamper it clients starting from the point of first contact (Front desk check in) until the last point of connection through out the length of their visitor’s visit( Check Out). This complete makeover of Marriott International’s already successful image is one of the major reasons it is one of the best companies to work for. Normally, great amount of time is consumed in the mere planning of the purchase orders of a particular business company. And since most of the time the transactions involve not only a single client or customer, especially in the case of huge product and service providers, business establishments deal with sub-suppliers with several forwarders from which a number of consolidations are exchanged (Reichheld and Sasser, 1990). The workload and time that the inventory managers handle defines the proceeding business processes that follow and thus, predict and maintain the success and profit of the whole business organization. That is why, efficiency counts! Where it is heading. Marriott International is heading successfully in many directions. Clearly, Marriott International launches in New York a revolution across its brands to bring forth a new look and feel, a primary focus is marketing that new look and feel to a new core customer base: Generation X. To create buzz and convey the message that the nearly 80-year-old company is not stodgy but actually hip, Marriott recently showcased its revamped rooms for its Marriott Hotels & Resorts brand with the mSpot, a live billboard in Times Square featuring a glass-enclosed guestroom and four days of concerts, events and celebrity broadcasts(No author, 2005). Furthermore, Marriott International had launched in New York(No author, 2005) a revolution across its many brands in order to bring forth a new look and feel. The primary focus of this revolution is marketing that new look and feel to a new core customer base: Generation X. In this line of marketing strategy, Marriott International is creating buzz and conveying its loud message. The message is that the nearly 80-year-old company should not be branded as stodgy but actually hip. As proof, Marriott recently showcased its revamped rooms for its Marriott Hotels & Resorts brand with the mSpot. The brand name mSpot refers to a live billboard in Times Square featuring a glass-enclosed guestroom and four days of concerts, events and celebrity broadcasts. Marriott International has been very successful in the international hospitality business. Its main competitors Marriott International(Stock market symbol MAR), with a price earnings ratio of 29.81 and a stock market price of only $49.48 as of February 2007, is flanked on all sides by many competitors in the hospitality business. First, we have Starwood Hotels(symbol is and Resorts World, with a price earnings ratio of 25.04 and a stock market price of $68.35 per share. with the stock exchange symbol of HOT. Second, we have Hilton Hotels Corporation(symbol HLT) with a price earnings ratio of 30.18 and stock market price of 36.52. Third, we have City Devs Ltd(symbol CDEVT) with a stock market price of 36.52. Fourth, we have Intercontinental Hotels(symbol IHG) with a stock market price of 24.5. Fifth, we have Wyndham Worldwide Corporation (symbol WYN) with a price earnings ratio of 20.88 and stock market price of 35.49. Sixth, we have Orient-Express Hotels (symbol OEH) with a price earnings ratio of 57.27 and stock market price of 52.12. Seventh, we have Home Inns & Hotels Management (symbol HMIN) with a stock market price of $46.98. Eight, we have Four Seasons Hotel (symbol FS) with a price earnings ratio of 50.97 and stock market price of 81.55 Ninth, we have Choice Hotels International (symbol CHH) with a price earnings ratio of 25.74 and stock market price of 38.36 Tenth, we have Gaylord Entertainment, (symbol GET) with a price earnings ratio of 50.97 and stock market price of 81.55. With all the competitors around, Marriott International’s hospitality market is still not saturated. Corporate responsibility issues, etc. Marriott International has an excellent corporate responsibility program. Marriott advertised its corporate responsibility statement(Cohen and Moore, 2002) stating that “Jim Johnson Green is coming to a hotel near you”. In line with its corporate responsibility, Marriott International Inc., the lodging industry giant, has announced that it has cut greenhouse gas emissions by a big 70,000 tons in a year. This is the same as removing 10,000 cars from the roadways. Marriott international has even set a five-year goal of decreasing significantly its greenhouse gas emissions by 6 percent per guest room by the year 2010. This Marriott International goal includes company efforts that already cut greenhouse gases in each hotel guest room by 2 percent last year. Pat Maher, senior vice president reiterated that "Being green is good business,. Marriott International’s corporate responsibility is very timely. Why its considered such a great company to work for. It is considered such a great company to work for because it is the no. 89th best company to work for according to fortune magazine. The annual pay of the most common salaried job is the sales manager’s $54,274. Also, the most common hourly job is paid the minimum of housekeeper with an annual pay of $23,407. Marriott International also offers its employees a job sharing program. Furthermore, the company gives professional training programs averaging one hundred twelve (112) hours per year. Currently there are an estimated 134,350 United States employees and seventeen (17) thousand employees working outside the United States. In fact, more than 3,000 Marriott managers started on an hourly rate. Working in Marriott International will bring good incentives in terms of training, salary and other fringe benefits. CONCLUSION Marriott International is the 89th best company to work for according to Fortune Magazine. One reason is that the company continues to expand both within the United States and overseas. Also, the company’s generation of estimated $11,550 million revenue in the year 2005 is convincing proof that it will be around until the next century. Furthermore, Marriott International has been consistent in implementing its mission statement of quality service at reasonable rates. Quality management in the business sector is most crucial and relevant to industries that are classified as manufacturing companies and finance firms. The trend towards internationalization and increased global competition among huge and successful business corporations directed business executives to find ways and means to improve their products and services to clients and consumers. Every existing business company in this era of modernization have invested resources to enable them be successful in the local as well as in the international market competition. Quality and productivity are the common goals among business individuals. The best product and service providers continuously update and upgrade their service deliveries in order to answer the demands of their customers. Customers have the ever-increasing demand on getting their hands into the products which can lead to change in business establishment if expectations are not met. Business firms invest on researches that will define their target customer groups that they believed they could serve best. Every business person is determined to know what kind of work they would and would not do for their customers and, in turn, they carefully learn how to fulfill the needs of each kind of customer in their target markets. Finally, It is considered such a great company to work for because it is the no. 89th best company to work for according to fortune magazine. References Cohen, S & Moore, J (2002) Today’s Buzzword: CRM. Public Management, 82 (4), 10. Deming, WE (1986) Out of the Crisis, MIT Centre for Advanced Engineering Study, Cambridge, MA. Harrison, J., Enz, C. (2005) Hospitality Strategic Management, Wiley, N.J. Hessan D & Whiteley R (1996) Customer Centered Growth: Five Proven Strategies for Building Competitive Advantage. Cambridge, MA: Perseus Books. Ishikawa, K (1985) What is Total Quality Control? The Japanese Way. Englewood Cliffs, NJ: Prentice-Hall. Juran, JM (1969) Managerial Breakthrough: A New Concept of the Managers Job. New York: McGraw Hill. Larson, M (1999) Whatever happened to TQM?. Quality, June 1999, pp.32-35. American Society for Quality 2000 January, Quality, Available at: www.asq.org (Accessed 12 March 2007) Reichheld, FF & Sasser, WE, Jr. (1990) Zero defections: Quality comes to services. Harvard Business Review, 68 (September-October), 105-111. Robbins, SP (1998) Organizational Behaviour: Concepts, Controversies, Applications. Eight Editions. New Jersey: Prentice Hall, Inc. Zeithaml, V (1990) In D. Bowen, Service Management Effectiveness: Balancing Strategy, Organization and Human Resources, Operations and Marketing (pp. 369-381), Jossey-Bass, Inc. Publishing. Read More