Franchising however has significant risk as it requires a high degree of branding consistency and brand enforcement over time (Altinay, 2007).
Any expansion strategy has a direct implication on a company's value chain. A merger, acquisition, alliance or joint venture can completely re-define the value chain of an organization (Porter, 1986). The value chain for Marriott's expansion into China is shown in Figure 1, Marriot Value Chain for China Expansion.
Figure 1: Marriott Value Chain for China Expansion
Based on the value chain model from Porter (1986)
The competitive dynamics throughout China are unique as the majority of hotels and revenue are state-controlled. As of 2010, 58% of hotels are state-owned and 37% are private. This makes the ownership of a private hotel in China exceptionally valuable, and places great emphasis on how well a hospitality chain can lobby the Chinese government for concessions and support for new venture creation. Global competitors in the Chinese market include Accor, Starwood, Shangri-La, Hyatt and Hilton. It is the most competitive region of the world for gaining new hotel rooms that are privatized, HENCE Marriott's prioritization of this market as their most important. Figure 2, Analysis of Hotel Ownership in China provides a graphical analysis of state-owned vs. privatized hotels in the country. Figure 3 provides an analysis of the total number of hotel rooms each global chain controls as of 2010. As can be seen this is quite literally a gold rush for hotel rooms that are not state-owned. Of all competitors, IHG continues to be the most adept at gaining the Chinese government's approval for new building and also for managing to grow their brand through joint ventures and alliances.
Figure 2: Analysis of Hotel Ownership in China
Source: (World Travel and Tourism Council, 2010)
Figure 3: 2010 Competitive Comparison Analysis
Based on analysis of the Marriott Annual Reports and 10Ks
(Marriott Investor Relations, 2010)
Research Methodology
Attaining a high level of reliability and validity is critical for any research project to make a lasting contribution to the body of knowledge of which it is a part. The intent of this research methodology is to accomplish the three objectives of determining the impact on the Marriott brand of pursuing specific expansion strategies, evaluate how the Chinese market dynamics will affect the Marriott global value chain, and evaluate the expansion of Marriott into China from a competitive analysis standpoint. Each of these objectives are accomplishable through secondary research methodologies that are defined in this analysis. Additionally, the longitudinal effects of these decisions can be seen in financial analysis of Marriott's revenue and RevPAR figures published annually in the 10Qs on file with the Securities and Exchange Commission (Marriott Investor Relations, 2010). Taken together, the secondary research and data analysis based on financial performance will attain each of the three objectives of this study.
Research Method
The research method will include the following data collection and data analysis strategies and processes to ensure the data is valid, reliable and contributes to the body of knowledge for this field of study.
Data Collection
Secondary data collection will be completed using the online databases available from the Glion Institute of Higher Education, specifically starting with EBSCO Host, ProQuest (ABI Inform), Business Source Complete and Lexis/Nexis. Morningstar and Standard and Poor's will be accessed from the library for financial analysis, in addition to using the downloads Marriott makes available from their investor relations page.
In any data collection effort, it is critically important to have a sampling frame and defining of the sampling universe. For purposes of this study, the sampling frame will be defined as the expansion strategies of those companies shown in Figure 3. Profiles of each of these competitors' value chains, timeline of strategies, market development and Chinese partnership strategies, and pricing strategies will be assessed. The value chain model (Porter, 1986) will also be completed for each competitor and assessed as part of the data analysis phase. In short, the replication of timelines, decisions made, value chain implications and the financial impact of these decisions on each competitor will be possible given the data collection phase of this methodology.
Data Analysis
The data analysis will be completed in three stages. The first phase will be secondary research of each hotel chains' operations and timeline of activity leading up to their entrance into the Chinese market and growth progression. This analysis will conclude with a comparative analysis of strategies and an assessment of the financial implications of each set of decisions over time. The second phase of the analysis will concentrate on defining the value chains of each of the companies in the sample. This assessment would contribute significantly to the current body of knowledge in the area of successful market entrance strategies in China. Comparing these value chains and their variations in how supporting...
Organizational Culture and Sustained Competitive Advantage Organizational culture is a defining feature of every organization. The unique culture that every organization displays has an affect on its ability to remain profitable. Culture can have either positive or negative affect on the ability of the organization to remain competitive. Much academic research up to this point has focused on theory and defining what is meant by culture and sustainable competitive advantage. This
Generic Strategies Porter's generic strategies began life as a matrix grid featuring low cost and differentiation strategies, which could either be mass market or niche in nature (QuickMBA, 2010). A fifth strategy, hybrid, has been hypothesized by some, noting that there are instances where a firm could be argued to practice some combination of differentiation and low cost. The Swatch Watch has a differentiated strategy. While not a high end watch, it
Chinese Tourism for Hotels Just as the 4ps are no longer sufficient to capture the sophisticated buyer of regular goods, the inquiring traveler is part of a larger network of service consumers who has a need more. And that's why the now recognized 7ps can play a major role in reaching out to tourist customers who come from different cultures or otherwise have an expectation of being part of something special
The results of the data analysis are presented below in both tabular, graphic and narrative analyses formats. Validity Validity refers to the establishment of evidence that the measurement is actually measuring the intended construct. Measures can be reliable without being valid, but cannot be valid without being reliable. To develop a model by which validity issues could be assessed we used the validation model developed by Chandler and Lyon (2001) in
'" (p. 42). This clearly indicates that Thrasymachus was not won and while Socrates ended the argument on a good note but it was more his own approval of his views than Thrasymachus'. We can thus say with confidence that Thrasymachus was also a wise man of considerable sagacity. He knew that Socrates could move people with the power of his speech and was thus completely prepared to meet his barrage
Compass has the experience in the U.S. with these markets to exploit this opportunity. The military and offshore markets have also been identified by management as strong potential sources of growth in the UK. Another opportunity is with new markets, which include arenas, zoos and other public facilities. This emerging market is relatively untapped, and its size somewhat undetermined, pending the creativity of the catering industry. There appears to be
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now