This paper analyses and compares two major global hotel chains, Marriott International, Inc. and Starwood Hotels & Resorts Worldwide, Inc. Both chains have extensive investments in and outside the US. They have very strong brand names and are quite competitive. However they differ in their strategies, like the market segment each one targets, the role of technology in the business, the financial efficiency of their systems etc. The paper discusses the extent of globalisation that each firm has taken and what is their strategy in terms of global expansion. The paper also analyses the benefits and demerits each chain faces as a result of the individual strategy they had adopted. They also analysed the effect the recent …show more content…
In 2009 10K, the management claims that Marriot holds less than 1 percent market share of the global market. The US market consists of 69% brand affiliated hotels and so Marriott does very well here. However, the overseas market is very different. In the overseas markets, branding is much less prevalent and most markets are served mainly by independent operators. The advantage of Marriott’s high brands recognition seems not so apparent there.
5.2.2 Poor Financial Performance
As shown in Appendix 8.1 Financial summary of Marriott, since 2007, the profit margin dropped quickly from 5.40% to 2.8% and then to -3.17%. This was due to the slowdown in economy and the hotel industry since 2007, the revenue declined greatly and meantime, the company has not been able to manage its cost structure efficiently, so its profit margin could not be maintained but dropped quickly. This poor financial performance may have negative influence on Marriott’s global expansion, because it may lack capital to invest in other emerging markets.
5.3 Critical Factors of Starwood’s Global Success 5.3.1 Well established global presence
Starwood is quickly moving forward to have 1,000 properties around the world under its nine brands. The globally extensive property base enables the company