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Sm Biz Lv

In: Business and Management

Submitted By cheung619
Words 1360
Pages 6
Business-level strategy defines an organization’s approach to competing in its chosen markets
Major business-level strategic management responsibilities:
Direction setting
Establishment & communication of mission, vision, ethics, & long-term goals of a single business unit
Creation & communication of shorter-term goals & objectives
Analysis of business situation
Compilation & assessment of information from stakeholders, broad environment analysis, & other sources
Internal resource analysis
Identification of strengths, weaknesses, opportunities, threats, sources of sustainable competitive advantage
Selection of strategy
Selection of a generic approach to competition – cost leadership, differentiation, focus, or best value
Selection of a strategic posture – specific strategies needed to carry out the generic strategy

Management of resources
Acquisition of resources &/or development of competencies leading to a sustainable competitive advantage
Ensuring development of functional strategies & an appropriate organizational design (management structure) to support business strategy
Development of control systems to ensure that strategies remain relevant & that the business unit continues to progress toward its goals
The generic strategy types proposed by Michael Porter are perhaps the most widely used & understood
A sustainable competitive advantage is related to the amount of value a firm creates for its most important stakeholder, the customer

Focus through a differentiation | Narrow | Preferred product or service |
Porter’s competitive strategies
Focus strategies can be based on differentiation, lowest cost, or best value
A focus strategy emphasizing lowest cost would be difficult in the hospitality industry because it is difficult to please a particular guest segment without some form of differentiation
The key to focus strategy is providing a product or service that caters to a particular segment in the market
Firms pursuing focus strategies have to able to identify their target market segment & both assess & meet the needs & desires of buyers in that segment better than any other competitor
The risks of pursuing a focus strategy depend on whether the strategy is pursued through differentiation, cost leadership, or best value
The desires of the narrow target market may become similar to the desires of the market as a whole
A competitor may be able to focus on an even more narrowly defined target & essentially outfocus the focuser
Business-level strategies should be formulated on the basis of the existing or potential resources & abilities of the organization

Renaissance Hong Kong Harbour View Hotel, JW Marriott Hotel Hong Kong,

Courtyard Hong Kong, The Ritz-Carlton, Hong Kong, Hong Kong SkyCity Marriott Hotel , Courtyard Hong Kong Sha Tin

Wan Chai, Central, Kowloon, HK International Airport

When considering Marriott International, Inc.'s product, market, and distinctive competencies, one can develop a clear position that puts the company in multiple generic business-level strategies. This company is a worldwide franchisor and operator of hotels and lodging facilities, which operate under multiple separate brand names. They are a top player in the Hotel and lodging industry, and will certainly remain to be for many years to come. Based on multiple competitive advantages, including uniqueness and cost, and the breadth of their competitive scope, both broad and narrow, Marriott International, Inc. pursues multiple business level strategies. By taking a look at their portfolio of brands, Marriott displays an established presence across a broad market encompassed by a number of customer segments. Their distinctive competency comes from their differentiation strategy, by offering unique products, as well as their cost leadership strategy.

Differentiation Strategy
Marriott International, Inc. is a primary user of this strategy as they continue to develop a product and service that uniquely satisfies customer's needs. Not only are customer needs fulfilled, yet the distinctive attributes the company offers are valued and perceived as superior than competitors. By providing to multiple customer segments, from moderately priced to premium priced, the Marriott has earned a reputation for innovation and quality. The value added provided by the company's uniqueness allows for it to charge a premium price for the more upscale customer. This serves as a valuable attribute as it enables the company to offset a price increase by suppliers; by passing along the costs to customers who cannot easily substitute the product and service they provide.

A current example of this strategy can be seen in the Marriott's introduction of new brands to appeal to new investors and serve unique guest segments. In December of Last year, J.W. Marriott himself announced the Autograph Collection. This new brand of very upscale independent hotels will offer a variety of distinctive personalities in major cities and desired destinations around the world. The member properties will preserve their personalities and branding, while utilizing Marriott's acclaimed marketing, reservation, and technology platforms. The innovative new brand is set to group worldwide iconic hotels according to the unique experience guests are looking for; whether it is a resort, an urban edge hotel, historic hotel, or a boutique arts hotel. The purpose is to appeal to a growing segment of customers who seek an experience that an independent hotel can provide; while further being strengthened by Marriott's presence in their internal operations. Seven hotels are set to officially form part of the Autograph Collection in April; 25 or more properties are expected to be added throughout 2010.
Furthermore, global luxury brands like The Ritz-Carlton are renowned for their unique architecture and exceptional quality of dining options, facilities, and personalized guest services. Most of the properties offer valuable amenities, such as golf courses, health spas, and tennis courts, which the upper scale customer usually demands. Some of the properties even offer the option to purchase luxurious real estate from one bedroom apartments to immense penthouses, while being able to enjoy the facilities and services provided by the hotel. This strategy serves as a viable way of earning higher than average returns as customer's sensitivity to price is diminished by an increase in brand loyalty.

Cost Leadership Strategy
On the other hand, Marriott International, Inc. does a superb job in offering brands that are aimed towards the more price sensitive consumer. Brands such as SpringHill Suites, and Courtyard target the upper moderate price tier segment, while Fairfield Inn targets the lower moderate price tier. The company excels in efficient cost production that enables to charge a low price compared to its competitors while still making a reasonable profit. The Marriott strives to keep costs low while catering to a broad segment of customers; providing them with clean, practical, and comfortable rooms as well as exceptional service. The company has been able to lower operating costs through a variety of ways including green buildings, waste reduction, and greener supply chains.
Marriott has developed a "spirit to preserve" philosophy that encompasses all of these efforts that not only serve to protect the environment, but to reduce costs as well. Last year the company had managed to have 67 properties either LEED certified or registered, including their headquarters in Bethesda, Maryland. It also employed 32 LEED accredited engineers and designers to assist in expanding their green building portfolio. By 2015 Marriott has set a target to increase the number of LEED certified buildings to 300. The importance of all this comes from a reduction of a hotel's water and energy consumption by up to 25 percent; a favorable cost decrease for this top industry player.

Furthermore, the "spirit to preserve" philosophy will focus their efforts on energy, water, and waste reduction. The eminent environmental impact from hotels is their consumption of energy and generation of waste, which contribute to greenhouse gas emissions. Marriott has set a goal to reduce water and energy consumption across its brands by 25 percent per available room from 2007 levels by 2017. Additionally, in 2009 it was also able to reduce water consumption per available room by 8.2 percent. In terms of greener supply chains, the company was able to negotiate with vendors across their $10 billion supply chain to supply greener cost efficient products that reduce resource and energy consumption. Products that were introduced in 2008 and 2009 include greener key cards, recycled pens, low energy light bulbs, water efficient showerheads and toilets, and the list continues to grow.…...

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