Essay Sample on Marriot Corporation

Introduction

Business entities always use different growth strategies to expand their business and increase sales and profits, and these growth strategies are influenced by financial situation, government regulation, and market competition. Some of the standard growth strategies include market expansion, product expansion, market penetration, acquisition and diversification (Thomson et al., 2001). Diversification is considered one of the most dangerous growth strategies to adopt and many companies have different approaches about diversification. In this case, Marriot Corporation employs related diversification as the primary strategy for its growth. This strategy implies that a company extends its operations into new services and products that are firmly related or connected with its existing products and services (Boschma & Capone, 2015).

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Related diversification enhances the interrelationships between the various value chains. This strategy is preferred over unrelated diversification because it saves cost, time and the overall output and effort required in the value chain process (Boschma & Capone, 2015). In this particular case, Marriot Corporation has diversified its hotel business into resorts, hotels of different types, long-stay residential hotels, and time-share properties because the services offered by these business entities are the same (Acar & Erkan, 2018). Marriot Corporation still employs the same marketing strategies, and the overall effort of operation always follows the same plans as the earlier existing hotel. The company's marketing team has little work to do because it does not have to diversify its marketing strategies regardless of the new offerings. It is worth noting that the suppliers of the resources will be the same for the diversified business entities because the offerings are slightly the same. The company does not have to invest more on employee training, and development programs the slight modifications in the services and products offered require more or less of the same skills. Management operations of the diversified entities do not have to change its business plan, and this will significantly benefit Marriot Corporation of the same cross business integrations (Acar & Erkan, 2018).

Even though diversified businesses such as credit card tie-ins, airline catering, institutional food services, and travel operations are not the same as the previous existing hotel business, it is essential to state that these businesses have taken from the separate individual characteristics of the general operations of the hotel business (Acar & Erkan, 2018). For instance, the hotel industry has provisions and offers various opportunities for their customers to use travel guidance and helps its customers by outsourcing necessary services. Marriot Corporation utilizes this opportunity by expanding its business to provide travel operations and advice instead of outsourcing the services for their customers. The company boasts of its vast experience in travel operations, and this helps the company to integrate these services with its hotel business comfortably. The company is also well known for its food and catering services and therefore uses its brand image to expand its business to airlines because the technology and skills required are interconnected with the skills needed in the hotel industry (Acar & Erkan, 2018).

Conclusion

In conclusion, Marriot Corporation has gained a competitive advantage over its market competitors because it applies a related diversification strategy. Related diversification enhances the company to venture into new markets and create new services and goods while saving costs and time. This strategy does not involve a lot of changes in terms of marketing strategies, technological advancement, human resource personnel and skills, management skills because the value chain activities are closely interrelated. Marriot Corporation has successfully applied related diversification strategy to grow its business and now boasts of its business operations in different markets and services such as long-stay residential, time-share properties, airline catering, institutional food services, luxury resorts, franchised operations, credit card tie-ins and travel operations among others.

References

Acar, A., & Erkan, M. (2018, June). How Much Does the Consumer-Based Brand Equity Affect the Financial Performance of the Company?. In Global Conference on Business and Economics (GLOBE 2018). Retrieved March 10, 2019, https://scholarcommons.usf.edu/cgi/viewcontent.cgi?article=1014&context=anaheipublishing#page=70

Boschma, R., & Capone, G. (2015). Institutions and diversification: Related versus unrelated diversification in a varieties of capitalism framework. Research Policy, 44(10), 1902-1914. Retrieved March 10, 2019, https://www.sciencedirect.com/science/article/abs/pii/S0048733315001109

Thomson, A., Strickland, A. J., & Gamble, J. E. (2001). Crafting and executing strategy. New York, McGraw Hill Education.