Purpose of the Report

Handling Innovation in commercial enterprise is an important method that any company has to put into effect in order to acquire aggressive advantage. Technological changes are helpful for the business of an organization in different perspective. Innovations are helping the Marriott international in their business (Arabia, 2018).

In this report will discuss about the strategies of Marriott International for 2020. It will also explain about the Porter’s 6-force model and PESTLE analysis for the Marriott international.    

Future innovations are making basic principles for the organizations. It is a way to maintain their standard with good quality. There are so many strategies for the handling of business of Marriott International at global level. Following are the goals of the Marriott International for their future, which are;
• It started different services for making their business higher.
• Marriott international started their innovations from 1927. They are continuing their work for making their future in the field of hospitality.

• Present performance is based on the innovations
• The enterprise in 2020 – using Porter’s six forces analyses to have a look at the industry in 2020

In this report, different analysis’s are conducted for the 2020 and beyond for the Marriott International. It is based on the innovations and requirements in the future. In this report, Porter’s six-force analysis is used for the Marriott International. Porter’s analysis is helpful for the planning and execution for different business processes in future. This report is also included PESTEL analysis for the Marriott International.        

The researcher has chosen Marriott global for a venture that is associated with the Hospitality enterprise. The agency is an international resort chain that gives luxury accommodation in one hundred thirty countries all over the world. John Willard Marriott and Alice Marriott are the founders of Marriott. It is situated in the Washington D.C.-Maryland. It is offers a high-quality customer support in the field of hospitality. Marriott is fastest growing organization in the hospitality industry.  The industry covers accommodation, meals, beverage, journey, and tourism. Marriott business enterprise becomes the very first hotel chain that launched on-line booking and it provides best facilities to the customers in all over the world. Marriott International and its subcontractors are the most popular brands at the International level. It is first choice of the customers for stay in every corner of the world, as it provides best facilities to the customers. Business enterprise takes competitive advantages via reducing the competition and making them partners. It is a best approach for reducing the competition in the market (Gollan, Marriott International Will Open 40 Luxury Hotels in 2018, 2017).

Structure of the report

Marriott international is best performer in the field of hospitality industries based on their innovations and facilities for the clients. Forbes announced that Marriott is one of the most modern organizations becoming a member of ranks like – Amazon, Tesla and Apple in 2017. They are always focused on the innovations for their clients as well as business. Marriott is having a great role in the field of innovation in hospitality industry. They start loyalty rewards to their valuable customers. They started Marriott rewards, Ritz-Carlton rewards for their clients. They can redeem their points according to their requirements, when they travel in all over world.

Marriott is having a long history in the field of innovations. They are always following the innovative ways for making their customers happier from their services (Brooks, 2013).

Following are the innovations of Marriott international:

Year	Innovation	4 P’s of Innovation space
1927	First A&W root beer stand is started by the Marriott International	Service – Radical
1988	In Poland, they started 500 hotels (marriott.com, 2018, A).	Position – Incremental
1997	The acquisition of Renaissance Hotel Group.	Position – Incremental
2004	Marriott’s has announced about the first Bulgari Hotel and resort.	Position – Incremental
2009	They started Autograph collection	Position – Incremental
2011	In Europe, Brazil and North America, they started AC Hotels for their clients (marriott.com, 2018, A).	Position – Incremental
2012	Marriott started one click scheme for the RED coat in which customers will manage their events.	Process – Incremental
2013	MOXY was lunched in the Europe for targeting their market. It is a 3-start hotel.	Position – Incremental
2014	Marriott International doubles their distribution in Africa for reducing competition.	Position – Incremental
2015	Marriott merge the Delta hotels and resorts in them.	Position – Incremental
2016	Starwood hotel is merged with the Marriott and it is reducing the competition of it (marriott.com, 2018, A).	Position – Incremental
2017	The company was awarded with digital edge 50.  (Marriott News Center, 2018).	Process – Incremental
2018	Loyalty Rewards are started for the clients, which is beneficial for clients as well as for the organization   (Marriott News Center, 2018).	Service – Incremental

Porters six forces model is used for analyzing the competitive environment. The forces in the model include:

Bargaining power of suppliers (medium)

It is depending on the number of supplier that the organizations negotiate with suppliers if they are more than in number. Marriott International is having many suppliers but if they compromise with the quality of the products than it will also affects their image in the industry. In 2020, the corporation will have to change its suppliers as the demand of customers changes based on which it will have to create a positive relationship with them.

Bargaining power of buyers (high)

If supply is lower than demand than buyer is power is decreased. Marriott international is always a foot ahead for making their customers happy and satisfied with their facilities. However, the number of competitors will increase by 2020 and technological advancement will allow customers to easily check and compare prices. There is no switching costs based on which the barraging power of customers is high.

Threats of Rivalry from the new entrants (moderate)

New entrants are decreasing the profitability of any company. There are so many things to be considered for manage this threats, such as patents, rule, regulations, brand, government policy. Marriott international is using a best approach for reducing competition by acquiring new business and it is a well-established brand which is likely to sustain its brand reputation. However, other competitors might also follow this strategy; therefore, the threat of new entrants will be moderate in 2020.

Threats of substitution (low)

Strong branding is reducing the substitution threats, such as iPhone is having a brand. There are not specific substitute products; however, some substitute includes motels, guest house, Airbnb and others. By 2020, new substitute might launch such as virtual experiences, however, they are less likely to disrupt the industry; thus, the threat of substitution is low.

Overview of the organization

Competitive Rivalry in the industry (high)

This is the biggest threats for the organization. It is a high-level rivalry between the products of different organizations. The number of competitors for Marriott is likely to increase by 2020 and it will create challenges for the company. Competitors of Marriott include IHG, Wyndham Worldwide Corporation, Choice Hotels International Inc., Four Seasons Hotels Limited and others which are likely to rely on innovation to expand their operations by 2020, therefore, competitive rivalry is high (Winder, 2018).

Relative power of other stakeholders (moderate)

The government is another key stakeholder which affects the operations of Marriott International. Marriott operates globally; therefore, the company is affected by actions taken by governments in many nations. By 2020, governments will new regulations for the hospitality and Airlines industries which will be enforced on Marriott. This industry in highly affects the economy of the country. It is also based on the tourism and traveling from the national as well as international tourists. New changes brought by the government will influence the profitability of Marriott since its management will have to change its current processes to comply with new guidelines. Therefore, the relative power of other stakeholders is high for Marriott since it will influence the profitability of the industry.

Marriott international is a great innovator in the field of hospitality and other business. There are so many things for making their business in increasing stage. Therefore, they are highly focused on the innovations in the field of hospitality. It is also necessary for following the rules and regulations of governments and it is helping to maintain their status (Whiteling, 2010).    

These are the basic strategies of Marriott International Inc. for growth in future.

PESTLE analysis is most important thing for an organization. Here is PESTLE analysis of the Marriott International.

The main political elements that would have an effect on Marriott are the danger of terrorism, International business and the political climate in famous tourist locations. Major political decisions such as Brexit resulted in affecting the operations of the company. For example, the United Kingdom is a major market for Marriott and Brexit will makes it difficult for the company to effectively manage its operations situated in European nations. The number of customers is likely to reduce and other tariffs, duties and charges are likely to increase which poses new challenges for Marriott. The threat of terrorism has also affects the hotel industry and it is also a reason which frightens people away from traveling (Pestleanalysis.com, 2018).

Innovation history of the organization

Essential monetary elements on the way to affect Marriott’s business are the slowing of economy. It increases in China and the continued financial issues in Europe. Such occasions as the inventory market collapse in China and the crisis in Europe have substantially decreased individuals’ travel at different places ( Gollan, Marriott Wants To Build Loyalty With Luxury Travelers By Providing Transformative Experiences, 2018).

Social elements make the destiny appearance very good for Marriott International. It is also based on the quality of travelers that planned to travel all over the world. Social perspective of customers towards luxury travel is changing and millennial customers prefer to pay extra for a luxury travelling experience. By 2020, the use of technology will makes it easier for Marriott to reach new customers in developing nations as the access of customers to the internet increases. These changes can expand the numbers of tourists form the different cultures, such as China, India, and many other countries (Oskam & Boswijk, 2016).

IoT is changing the way services and products supply fee and in imminent future it will also redefine guest enjoy by means of rendering hyper-personalized tips and fixing actual-time queries of the guests. famous person-wood motels & hotels utilized a technique referred to as “sunlight hours harvesting” to shop electricity and growth indoor lights consistency by way of routinely adjusting the power-efficient LED lighting based at the natural light detected entering the room ( Bursell, 2017).

The hospitality enterprise is imposing IoT-centric systems to better serve customers and boom the performance of its operations. As an instance, the motel industry can use IoT to offer included services, which include application driven devices and automated triggers like automatic door locks, set-pinnacle-bins, thermostats, phones, mild switches, electric powered blinds, and different gadgets, which are connected on a not unusual network to enable the services that visitors want. These forms of facilities will help hoteliers to decorate their in-room studies and provide a high priced ambience for his or her guests (Center, 2018).

The fundamental legal element with the intention to affect Marriott’s future business is the popularity of offerings. ( KHARE, 2016). Legal changes brought by Brexit will affect the operations of Marriott since it will have to comply with new legal guidelines. The corporation which uses online platform to reach a wider audience, such as Marriott, will have to comply with cyber security and data protection regulations to ensure that they protect the privacy of their customers. A good example is implementation of GDPR (General Data Protection Regulation) in European Nations, UK and the United States (Tankard, 2016).

The Future of the Industry 2020 and beyond

Environmental element that could disrupt Marriott’s business is gas prices. There are so many things, which are related to the environment. Falling oil fees may want to cause decreased travel costs and more demand for motel rooms. Glaringly, a capability chance to Marriott’s commercial enterprise would be any surprising increase in gas prices, specifically for the travelers, which are using airways for travel (Quaste , 2017).

An ability long-term environmental impact on Marriott may want to encompass accelerated strength charges created by means of efforts to slash greenhouse gases by limiting the burning of coal in strength plants. Climate trade may want to damage Marriott’s business with the aid of elevating ocean degrees and flooding inns or growing storms that discourage seashore going. Accelerated temperatures from international warming result in closing ski resorts or make a few beach hotels too hot for comfort. These factors will force Marriott to rely on innovation to change its offering and innovations in order to sustaining develop in 2020 ( Solis, 2018).

Strengths

• Strong profitability: Marriott international has sustained its profitability by expanding its operations globally. The company reported a massive internet a profit of 398 million greenbacks inside the first zone of 2018, which is a 7 % growth comparing to the first zone of 2017, expects the second area of 2018 to reach approximately 945 million dollars gross costs sales which makes 10 or 11 % boom profitability evaluating to 2nd quarter of 2017( Taylor, 2018).
• Market share:Marriott  International is one in all leading organizations in to the hospitality industry.it is spreading their business day by day at all over the world.  Employer presently operates 29 specific manufacturers around the globe. The plan of expansion is positive and the agency appears after new share markets ( Yu, 2017).
• Strong focus on innovation:Marriott International has announced that they are very proud to introduce a brand new loyalty scheme for his or her clients in 2018 across 6500 hotels in 127 countries. The brand new scheme will deliver the possibility for clients to gather factors and gain Silver, Gold and Platinum fame with a view to result in extra bonuses and blessings (Volodzko, 2018). These types of innovations are beneficial for the organization as well as for clients.  The business enterprise has additionally introduced a moment of stay – musical and culinary display provided through Marriott with partnership of widespread song institution (Development, 2018).

Weaknesses

• Excessive focus on expansion:The Corporation is extensively focused on expanding its operations in new areas which resulted reducing the quality of services of the company.
• Attrition of employees:Marriott is finding it difficult to retain talented employees in the workplace since its attrition rate is high. Many people leave Marriott and join its competitors due to lack of availability of facilities and growth opportunities.
• Lack of environmental friendly policies:The importance of social responsibilities of companies is increasing based on which many competitors of Marriott are improving their value chain in order to implement sustainable policies which are likely to negatively reflect on the public image of Marriott.

Opportunities

• Shift in consumer behavior:Perspective of customers is changing and prefers to pay extra for a luxury travelling experience.
• Increase in number of customers:The number of global travellers is increasing, especially in developing nations. New market expansion opportunities are available for hotel corporations to expand their business in the market.
• Personalized travel:Hotels are giving personalized travel option to their customers in which customers can customize their travelling experience and they pay extra for those customizations.

Threats

• Competition:Increasing competition is a major threat for hotel corporations since the number of competitors is increasing in the market.
• Strict compliances:Governments are introducing new laws and regulations on hotel corporations which make it difficult for them to sustain their profitability in the market.

Following are different capabilities which Marriott has to focus on innovating in order to sustain its growth by 2020.

• Legacy of strong leadership:For over ninety years the business enterprise become leaded in to the right course presenting balance in the hospitality industry and gaining competitive advantage on different corporations (Newsroom, 2016). In 2012, the organisation changed into given to Arne Sorenson and he became the new CEO of the corporation. Arne Sorenson introduced the new loyalty software after the purchase on Renaissance resort organization that has a large impact on to the brand new history of Marriott  international (Forbes, 2016). Effective leadership will result in motivating employees to improve their performance and it will reduce the attrition rate which will enable the company in retailing talented employees.
• Culture of organization: The Company should focus on establishing a positive culture in the workplace in order to reduce attrition rate of employees. It will assist the corporation in retaining its customers by ensuring that employees provide them high quality services.Innovation is a key component and Marriott believes that to expect customer wishes and expectation ordinary changes are appropriate (InvestopoliNews, 2018). The corporation should focus on following elements in order to establish a positive culture:
  Integrity – How we do, commercial enterprise is as essential because the enterprise we do. We keep felony standards and ourselves to uncompromising ethical.

Way of serving – the spirit to serve makes the company more potent.
The subsequent core values are very important in order to supply excellence in customer support to obtain competitive benefit. The newly innovated structures and use of virtual generation that enterprise carried out are the principle key factors that result in achievement (Davila, 2018).

• Company structure: The structure of the company focuses on flow of information in a hierarchical order which resulted in enabling the company to ensure that it is flexible towards changing regulations. The company has to observe a hard and fast of rules and tactics. Very much less flexibility for employees which leads to bureaucratic fashion of control. The corporation should also focus on specialization in the field by dividing the enterprise in to special departments, which makes it easier to give customization option to customers.

Even though the agency structure of Marriott  International stays as a Hierarchical organization with bureaucratic style of management and very less flexibility for employees comply with by unique policies and strategies, the agency improvements observe via strong management and control by the management created one of the maximum innovated and a hit employer in 21^st century (austinmarriottdowntown.com, 2018).

• Value chain analysis

The provided version of fee chain analysis for Marriott  global indicates the primary activities that are presently involved in creating and presenting the principle services and products and the secondary sports within the corporation that aren’t at once contain with production but has an important function to convey extra performance and achievement.

It is based  on the above information it appears that evidently the combination of Arne Sorenson management style collectively with an agency subculture that sell teamwork lets in Marriott  International to innovate thru price chain starting from inbound operations to margin (marriott.com, 2018b). The corporation should implement sustainable supply chain management (SSCM) policies in order to ensure that it comply with environmental friendly policies while delivering services to customers.

• Partnership with the competitors

Porters 6 analysis of Marriott International

The corporation should focus on partnering with its competitors in order to expand its market share in developing countries to increase its profitability. A good example is the partnership with TED enterprise which will acquire extra modern programs. The partnership cover creatively design TED Talks to guest rooms and particular TED Fellows salons in motels located all around the world (Marriot.com, 2018a). Moreover, it will assist the company in reducing the threat of competition which will benefit the corporation in the future.

• Effective teamwork: A key point within the employer that asserts a hit commercial enterprise begins with properly skilled and prompted personnel. To achieve success in an enterprise it does not count how lengthy has it been existed or how huge the enterprise is, the principle factor is to maintain that people have given an effort and ideas for future improvements. The agency duty in phrases of imparting powerful teamwork is to awareness on management talents and abilities and increase strong and trustful courting between personnel(marriottnewscenter.com, 2017). Moreover, the company should focus on implementing training and talent management program in the company to ensure that it is able to deliver high quality services to customers which will sustain its growth in 2020.
• Internet of things (IoT):Marriott can rely on IoT technology to offer customized services to its customers which will ensure that it is a relevant player by 2020. Though IoT technology, the company will be able to ensure that customers receive a comfortable experience in which they can use technology to perform various tasks which will create a positive image of the company as well.

Conclusion:

In conclusion, this report evaluated the future of hotel industry by 2020 and the organizations innovation requirements in order to sustain its growth. In the case of Marriott International, the corporation has proliferated in the past few decades based on which it has established a strong market presence. However, by 2020, the corporation will face new challenges which will require the company to rely on innovation to sustain its growth. Porter’s six forces framework and PESTLE analysis is evaluated in this report to understand the challenges faced by the company by 2020 such as change in legal environment, Brexit, increased competition, change in customer perspective and others. Based on SWOT analysis of the company, various recommendations are given for Marriott in which the company should focus on innovation to develop new capabilities. Effective leadership, training programs and positive workplace culture will improve the quality of services offered by Marriott and it will increase retention rate of employees as well. The company can also use IoT technology to improve comfortable of customers. Based on these innovations, Marriott will be able to sustain its growth by 2020.

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