Title: Marriott: Looking for Opportunities in a COVID World
Subject Area: International Business, Global Expansion Strategy
Company: Marriott International, Inc.
Region: Albania, Madagascar
Dilemma: In the fall of 2020, the global economy was reeling from the COVID pandemic and subsequent recession, but the hospitality industry, in particular, was severely impacted. Marriott International, one of the world’s largest hospitality companies, experienced a 65% decrease in room occupancy and a staggering 50% dip in their stock price. Despite these setbacks, Marriott saw potential expansion opportunities amidst the global recession. CEO Arne Sorenson recognized that Marriott would need to act fast and identified two promising markets previously untouched by Marriott: Albania and Madagascar.
Albania’s rapidly improving economic and political climate coupled with its proximity to tourist hotspots along the Mediterranean suggested it could be a profitable emerging market in the tourism sector. The rising interest in ecotourism had put Madagascar, one of the world’s most ecologically diverse countries, on the map highlighting potential opportunities for Marriott in the niche eco-tourism market. Marriott currently holds a competitive advantage, given their industry leadership and strong cash position, but that edge is slipping away as the world inches closer to economic recovery. These key questions would be critical in forming its global expansion strategy.
Key questions for Marriott to answer:
• Should Marriott explore opportunities in Albania or Madagascar?
• How should Marriott enter the market?
• Which tier and brand would be the best fit for their new venture?
Investment to Personal Capital: Elucidating CORE
The team brought a diverse set of skills and personal and professional backgrounds to the table, creating a solid foundation for the group as they began their research and analysis. Comprising three MBA students and one MSIM student, the group tapped their unique strengths to develop a comprehensive and robust analysis and recommendation.
● David Good: MBA student, utilized management experience gained working in a family-owned business to develop strategies and analyze market opportunities
● Zach Roth: MBA student, leveraged consulting experience and leisure expertise
● Jorge Suazo: MBA student, used management consulting and hospitality experience
● Xiaomei Shi: MSIM student, took advantage of management experience and analytic skills in marketing and supply chain
Investment to Social Capital: Embedding in the Company and Industry
The team collected multiple sources of information for data analysis. The team collected financial, operational and organizational data from both official online resources and third-party data collection services, for both Marriott International and its major competitors, as well as for the entire hospitality industry. The team also studied the history and cultural background of two target countries from articles, books, and economic related data from the World Bank.
Investment to Professional Capital: Adding Value
The team started the project by conducting extensive market research. The group analyzed Marriott’s current market position, the lodging industry as a whole, and then markets that Marriott was not active in such as Albania and Madagascar. The team applied tools such as Hofstede’s Cultural Analysis, identifying key differences in masculinity, long term orientation, and indulgence. Based on the group’s extensive research and analysis, a recommendation was made on which market to enter and the strategy to pursue in order to successfully execute that entry.
Capital Utilization: Developing Tools for the Future
● David Good: Working within a small but ever-growing, family-owned business, David found immense value in the skills and frameworks utilized in researching expansion opportunities. The knowledge gained from this project will be invaluable in their efforts to identify, analyze, and compare markets under consideration. The added skills will be essential tools as he develops and hones his edge as a manager and leader in his industry.
● Zach Roth: Built upon his existing tourism knowledge. Zach learned skills such as market entry strategy that is applicable to other industries.
● Jorge Suazo: Plans to use the learning experience and knowledge gained from this project as a stepping stone towards working with global clients in the management consulting industry.
● Xiaomei Shi: Found her capabilities in business data collections and marketing analysis largely enhanced from this project. Especially in this special situation of global pandemic, she is able to develop her knowledge of understanding globalization in a pragmatic way. She plans to use this experience, skills and knowledge in her future career in international marketing.
Without a contact within Marriott International, our group sought out an expert with experience in market analysis and international strategy to analyze and critique our case. We asked a senior vice president of one of the global companies to serve as a subject matter expert and to evaluate the potential merit of the project. Hailing from a different industry, though similarly service-oriented, the expert touts extensive experience in analyzing growth opportunities pointing that our case “provides a thorough groundwork for how large firms begin strategizing for expansion.” He suggested that our case could provide a more convincing argument for choosing the Albanian market over Madagascar, but the analysis was strong and concise. Additionally, he noted the importance of identifying alliances and ventures that fit within the company or brand vision to realize the greatest success.