Ansoff Matrix of Marriott Hotel - Essay Example

Marriott Hotel Ansoff Matrix Almost every business desires to grow and expand its activities (Waters, 2006). Marriot Hotelhas over the past years expanded its operations to numerous regions both within United States and across the world (Burkitt, 2012). It is anticipated that the company will set up 200 additional hotels across nations outside United States (Marriott News Center, 2014). This growth can be attributed to the development and adoption of the Ansoff’s matrix strategy. The Ansoff matrix is employed as a model for setting goals within the company. A review of Marriot’s expansion strategy shows that the company has adopted “market penetration, market development and diversification” strategies. Market penetration refers to a strategy where the organization enters a new market with its existing products (Oh, 2009). Through the market penetration strategy, a company can increase consumption of existing customers through rebates or overhauling of the business (Waters, 2006). According to Reid and Bojani (2010), this strategy aims at increasing the usage and number of the present customers either by attracting new consumers those from the competitors. In order to attract new customers, Marriot Incorporation has undergone a revamp of its promotional determinations that lay emphasis on the consumers (Olmsted, 2014). The company had recognized that though they would regard themselves as one of the best brands in the world, they lacked the zeal to appease customers. Starwood’s chain of hotels, one of Marriot’s rivals, challenged Marriot to look for the younger people in order to increase its market share and customers. Marriot hotels have in the past few years concentrated on offering their brand online to customers who like surfing all day. The company has a blog called “Marriot on the move” that accommodates people online (Marriott News Center, 2014). This blog has become an outstanding channel of providing entertaining stories and news on the company’s present, past and future prospects. This blog has gained a huge audience through the high number of followers in social media. As with other industries, user-targeted content is particularly vital in hospitality. Organizations that do not take advantage of the use of social media in the present age may miss out on a cheap platform that allows the company to interact directly with the clients (Bhttarai, 2014). In this regard, Marriot Incorporation has successfully expanded its operations across the world through revamping the organization to target new customers and increase the consumption of the existing ones (Marriott News Center, 2014). Marriott has also adopted the market penetration strategy through its “Love Travels” campaign that portrays the company’s dedication to make every person feel comfortable for who they are whenever they travel (Marriott News Center, 2014) Marriot Incorporation has also made use of the market development strategy. This strategy centers on developing new markets for the organization’s existing products and services (Oh, 2009). In the context of Marriot, the company has grown to other markets through building new units and joint ventures. One of the regions that Marriot Incorporation has focused on is the markets outside United States (Marriott News Center, 2014). This is because the growth rates within United States have gone down thus offering opportunities to expand to other regions. Some of the regions that companies expand to offer more lucrative business opportunities. Recently, Marriot bought out Delta chain of Hotels in Canada after the recent Canadian economic turmoil (Brownell, 2015). Marriot decided to expand to Canada in order to take advantage of the economic advantage of the depreciating Canadian dollar. In a press release, the head of mergers at Marriot Incorporation acknowledged that the company has hopes that the Canadian economy will improve. The Delta becomes the first largest hotel chain in Canada with full hotel service. Because of the weak Canadian dollar and cheap oil prices, Marriot anticipates tourism to be boosted by the low cost of transport. The company anticipates that the weak Canadian Dollar will encourage more Europeans and Americans to travel to Canada. Marriot bought Delta chain of hotels from the British Columbia Investment Management Corporation at 168 million US dollars. By buying the Delta, Marriot will have control of 30 hotels within Canada (Brownell, 2015). The company also recently expanded to Italy in Sacca Sessola, a few minutes away from Venice. By the end of 2015 the company also anticipates to have acquired 20 hotels in more than 20 countries. The AC hotels, which are a joint venture of Marriot with Antonio Catalan plans to expand its operations to the United States (Marriott News Center, 2014). Autograph Collection, which is one of the jointly owned Marriot hotel, attained its 60th hotel acquisition recently. The Unique collection permits autonomous hotels to take the chance to tap into Marriot’s powerful sales and marketing platforms. It is anticipated that almost 20 hotels will join the autograph collection this year (Marriott News Center, 2014). The company seems to have its undivided attention on market development. In 2014, Marriot announced that in the next few years it would acquire more than 200 lifestyle and luxury hotels estimated at $15 billion (Marriott News Center, 2014). The company seems to focus on the luxury and lifestyle segment of hotels due to an increase in demand of the same. The company’s CEO acknowledges that the present world travelers want to make their travel and visit worthwhile and enriching (Burkitt, 2012). Marriot hotels have also expanded their operations in Middle East and Africa. Recently, Marriot announced its acquisition of the Renaissance hotel and Courtyard in Doha. In the past few years, Marriot has also put emphasis on diversification of its operations through working to increase distribution in vital markets and decentralizing development within the organization (Marriott News Center, 2014). Diversification entails introducing new services into a new market (Reid & Bojanic, 2010). Marriot has also focused on diversification in order to get draw near to its customers and increase the company’s development. For instance, the Courtyard and Fairfield hotels had little potential to increase their sales in the specific markets. However, since Marriot had the business and platform for sales, concentration on the two markets allowed them to add to their market potential. This implies that Marriot would not have entered that market with its original brand name. References Bhattarai, A. (2014, September 14). Marriott’s future: 4 things to watch - The Washington Post. Retrieved March 26, 2015, from http://www.washingtonpost.com/business/capitalbusiness/marriotts-future-4-things-to-watch/2014/09/12/65fb1474-3839-11e4-bdfb-de4104544a37_story.html Brownell, C. (2015, January 27). Marriott buys Delta hotel chain in bid to capture upside of plunging loonie | Financial Post. Retrieved March 26, 2015, from http://business.financialpost.com/2015/01/27/marriott-international-scoops-up-delta-hotel-chain-in-major-canadian-expansion/ Burkitt, L. (2012). Marriott to Invest $2 Billion in Global Hotel Expansion - WSJ. Retrieved March 26, 2015, from http://www.wsj.com/articles/SB10001424052702303703004577475383271200696 Marriott News Center. (2014, August 4). Marriott Hotels Brand Continues its Expansion Across the Middle East and Africa - Marriott News Center. Retrieved March 26, 2015, from http://news.marriott.com/2014/08/marriott-hotels-brand-continues-its-expansion-across-the-middle-east-and-africa.html Marriott News Center. (2014, June 2). Marriott International Accelerates Growth in Luxury & Lifestyle Hotels With Plans to Add 200 Hotels Over the Next Three Years - Marriott News Center. Retrieved March 26, 2015, from http://news.marriott.com/2014/06/marriott-international-accelerates-growth-in-luxury-lifestyle-hotels-with-plans-to-add-200-hotels-ov.html Oh, H. (2009). Handbook of Hospitality Marketing Management. Routledge. Olmsted, L. (2014, June 6). Luxury Hotels: Marriott Bets Big With 8 Brands, Explosive Growth - Forbes. Retrieved March 26, 2015, from http://www.forbes.com/sites/larryolmsted/2014/06/06/luxury-hotels-marriott-bets-big-with-8-brands-explosive-growth/ Reid, R. D., & Bojanic, D. C. (2010). Hospitality marketing management. Hoboken, NJ: John Wiley & Sons. Waters, C. D. (2006). Operations strategy. Australia: Thomson Learning. Read More