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A critical strategic analysis of Marriott’s merger with Starwood Hotels

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Table of Contents Introduction ..................................................................................................................................... 3

Evaluating the levels of strategy ..................................................................................................... 4

Analysing the generic position .................................................................................................... 4

An evaluation of the key stakeholders ............................................................................................ 6

Critically analysing the external factors ......................................................................................... 7

PESTLE analysis ......................................................................................................................... 7

Political factor that drive the merging strategy ........................................................................ 7

Economic factors that drive the merging strategy .................................................................... 8

Social factors that drive the merging strategy .......................................................................... 8

Technological factors that drive the merging strategy ............................................................. 9

Environmental factors that drive the merging strategy ............................................................ 9

Legal factors that drive the merging strategy ........................................................................... 9

A critical analysis of the industry factors ..................................................................................... 10

Porter five forces analysis .......................................................................................................... 10

Threat of new entrants (Low) ................................................................................................. 10

Bargaining power of suppliers (Medium) .............................................................................. 10

Bargaining power of customers (High) .................................................................................. 10

Threat of substitutes (High).................................................................................................... 10

Threat of competition (High) ................................................................................................. 10

Analysis of the key themes ........................................................................................................ 10

Competitive advantage analysis with group mapping ............................................................... 11

Conclusion .................................................................................................................................... 12

References ..................................................................................................................................... 13

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Introduction In the present era of competition and globalisation, merger and acquisition has become one of the

crucial components in the strategic management process of an organisation. For hospitality

industry, diligence, superiority, involvement, and procedure of strategic planning procedure are

the important parts of strategic positioning process. To attain the competitive advantage, two

prominent hotels, namely, Marriot International and Starwood Hotels and Resort have agreed to

join together through a merger deal. The merger between these two hotels groups can create

world’s leading lodging organisation and can deliver strongest loyalty program in the hospitality

industry. Marriott International, Inc is one of the leading lodging organisations all over the

world. It possesses almost 4200 properties and it has presence in more than 79 nations (Marriott

International, 2015). The headquarters of the company is located in Bethesda, Maryland, USA.

Starwood Hotels & Resorts Worldwide is also a world’s leading luxurious hotel company with

more than 1300 properties. The organization has its presence in more almost 100 countries

(Starwood hotels and resorts, 2016). It has a huge network worldwide and it has award winning

loyalty programs. During the middle of 2016, the merger deal between Marriot and Starwood has

been finalized after taking the approval of shareholders of both the organisations. Marriot has

acquired the Starwood hotel. Initially, the group was not very interested about the deal. However,

with the passage of time, Marriot group has realized that it can gain potential benefits from the

acquisition deal. The questions regarding the Starwood Preferred Guest and Marriot Rewards

were raised. After the merger deal, the hotel groups stated that the best solution will be offered

combining SPG and Marriott Rewards. The present study is prepared to critically analyse the

effectiveness of the merger deal between these two hotel groups. The analysis will be conducted

corresponding to the external market as well as industry of both the hotel groups with the help of

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