Good The Innovations Strategy And Response To Threats And Opportunities Report Example
Innovation Strategy of Marriott International
Nowadays, for a company to be successful in the environment of severe competition and diversity of substitutions, it is not enough to provide a good quality of good and services corresponding to a famous brand. For the company to achieve and preserve success it is essential to move on and evolve according to the changes and requirements of the surrounding environment. In other words, companies have to use innovations in their offer and make it more attractive to the customers. Companies can innovate in various ways; however, the crucial element is to do the innovations that will make the product exactly what the customers want. Thus, innovation is about evolution in accordance with customers’ expectation and demand. While some companies are searching for the new ideas of how to impress their customers, other companies have taken a more advanced approach and involve customers in their innovative programmes. One of such companies is Marriott International. The aim of this report is to look at company’s innovation strategy, sources of innovation, processes used in search for ideas and their implementation, correspondence of organisational structure and culture to the innovation approach of the company, learning regarding innovation performance. The second part of the report is devoted to the recommendations to the future innovation strategy of Marriott International.
Innovation Strategy of Marriott International
Through the history of company’s existence, it was characterised by flexibility and innovative approach to business conduct. In this regard, introduction of innovations was starting from small things. In the 1927, when the company was still selling root beer, the first innovation was to add Hot Mexican food into a menu in order to attract different categories of customers (Marriott & Brown, 2013). In 1937, the company introduced the first boxed lunches in “in-flight” airlines, which demonstrates company’s innovation both in the new catering segment and also in the very technique of delivering food. Further, the next step was entering the new industry of hotel business. In this regard, company’s innovations was not in provision of good quality of service and comfort for its customers, the key innovation was to use new technologies for the improvement of convince of the service and placing customers’ experience on the new level. In this regard, the company was the first to introduce online bookings through its own automatic reservation system MARSHA already in 1995 (Accenture, 2014). The company was the one to buy 49 shares of Hilton hotel and conduct complete refurbishment and innovation of the hotel network, increasing profits and re-establishing the brand’s status. As it is seen from these data, company has always been open to changes and innovations both in terms of entering the new market with a brand new idea or improving the existing service.
Nowadays, innovation is one of the pillars of company’s corporate strategy. In this regard, it is stated that the company was one of the crucial innovators of the entire sector of hospitality. The official corporate strategy states: “Innovation has always been part of the Marriott Story. The Marriott family helped shape the modern hospitality industry. We’re driven to continually challenge the status quo and anticipate our customers’ changing needs with new brands, new global location and new quest experiences” (Marriott, 2014). Consequently, the company’s approach to innovative strategy is based on close cooperation with their customers, finding out what new experiences they expect; stimulate employees’ involvement in innovations, and application of new technologies in order to improve these experiences. Furthermore, the company invests in various profound explorations of customers’ expectations and new technological research in the improvement of traveling experiences (Abbing, 2010, p. 38). In terms of linkage with the external environment, the company has a strong connection with external partners in terms of Research and development, experts in market analysis, customer prediction studies. It also cooperates with various universities in order to hire talents straight from the classroom and also to be aware of the recent academic trends in the field of innovations and hospitality industry development (Clarke & Chen, 2009, p. 63).
The recent tendency in company’s innovative approach is based on one of the research of how the next generation perceives traveling. In this regard, the three innovative trends are to be applied. First of all, the co-creation is suggested, meaning that the company should involve its employees and customers as co-creators of innovations. The rationale for this is that employees are practitioners, and they know how the service and practice can be improved, and customers know what they want (Hacklin, 2007, p. 71). The second aspect refers to the provision of authentic experiences, advertised experientially and not in a transactional manner. In this regard is meant that the company should not only be able to provide unique experiences but also advertise them professionally and innovatively. The third trend is the design for serendipitous discovery, which is aimed at using prediction of customers’ behaviour and also spontaneity of freedom of will in designing advertisements and IT technologies that could suit both patterns (Clarke & Chen, 2009, p. 62). Thus, the company wants to be able to satisfy both predictable and spontaneous demands of its customers. It is a new step in innovation. In terms of Tidd and Bessant’s innovation audit, the company’s innovative strategy demonstrates an ideal model of equal-side diamond, as shown in Appendix 1. In terms of strategy, it is clearly communicated, people know what they are doing, the key competences of the strategy, top management is committed to innovation and key technologies are analysed (See Table in Appendix 1).
Sources of Innovation
Regarding the sources of innovation of Marriott International, it should be outlined that they are diverse. First of all, the primary source of company’s innovation is new knowledge. In this regard, it uses both new analysis of customers’ behaviour and the development of the new technologies. In this regard, company uses new technologies in order to stimulate and improve customers experience and provide them with the unique and unforgettable impression (Zacharias, 2011, p. 91). Another source of innovation is demographics. Since the company is an international organisation and targets customers’ needs, the company placed emphasis on diverse needs and expectations of different ethno-cultural and age groups of its customers. For instance, some hotel brands are directed at businessmen, while the other on authenticity of the local cultural specifics; hotels in the Middle East are oriented towards facilitation of Muslim rituals and correspondence to requirements of halal cuisine (Abbing, 2010, p. 45). Another crucial source of innovation is the change in perception. Through the constant updated analysis, the company knows about trends in customers’ perceptions and which values become dominant and develops innovations using these perspectives to the existing practical techniques of facilities. The greatest achievement of the company is that it often combines all three sources and creates something remarkable. For instance, in 2014, the company has introduced the vending machine that serves fresh, organic, healthy food, that is prepared daily from the local ingredients (Marriott, 2014). In this regard, the new knowledge was in creating this technology, demographic source was targeting people who look after their health and want to have the same experience during their travelling, and change of perspective is that a healthy food can be bought from a vending machine. According to Tidd and Bessant’s innovation audit, sources correspond to the links the company uses for its innovations. In this regard, they are diversified; involve cooperation with academics and discussions with competing companies regarding the development of industries (See Table in Appendix 1).
Processes in scanning new ideas
The company was innovating even in the way it was scanning for the new ideas. Marriott International has launched a campaign Travel Brilliantly, which is aimed at co-creation with customers. The website, where customers can suggest their ideas of the improvement and creation of the unforgettable future traveling experience was created. Customers have a chance to post their ideas and can vote for each other’s suggestions, bringing more attention to the most brilliant and creative ideas. The aforementioned innovation of healthy vending machine was received through this campaign and successfully implemented (Travel Brillaintly, 2015).
Among numerous ideas posted on the website, there are a few unique and perspective ones. Some of the ideas include suggestions of bartenders in residence, travellers running club, waitlist in the cloud, using membership points in restaurant and markets and the intelligent hotel rooms (Travel Brillaintly, 2015). While some ideas can be easily implemented by the creation of additional apps and financial contracts with restaurants and markets near the hotel, the most brilliant and innovative ideas would require more resources and time. For instance, the idea of customising hotel room and making it feel like home through framed photos of family, shower temperature, favourite TV programmes all contained in one’s smartphone app that could synchronise with the hotel room’s setting would require tremendous resources. In this regard, Marriott International would have to work with IT companies to develop these apps, and then rooms will have to be modified with the required sensor system which could then synchronise with the app settings on one’s phone. Thus, this idea would require tremendous technical support in its approbation. However, it would definitely be a new experience for its customers. In terms of innovative sources, this idea combines all three mentioned above sources that the company uses in its innovative approach. Most likely, for this reason, customised rooms might become the new offer of Marriott International. Thus, according to Tidd and Bessant’s innovation audit, the processes are functional form the idea to launch, innovation projects are finished on time, effective mechanism of insuring customer satisfaction, new products are systematically searched and fast-track projects can happen (See Table in Appendix 1).
The Organisational Culture
Regarding the organisational culture and its correlation with the innovations, as it was outlined before innovations are part of company’s corporate strategy, among other principles such as putting people first, pursuing excellence, embracing change, acting with integrity and serving the word. In this regard, the organisational culture is people-oriented. In this regard, it is argued that employees’ satisfaction is a key to customers’ satisfaction. This approach is crucial to company’s strategic perspective of culture-friendly approach to globalisation (Sparrow, 2014, p. 136). Consequently, in terms of correlation between organisational culture and innovation, the company uses the concept of building a culture of innovation within the company. It invests in its employees in their training and stimulation of creative and open-minded dialogue regarding improvements and innovations of the existing and future practices (Hacklin, 2007, p. 89). Thus, human-oriented approach to corporate strategy aligns with the innovation approach of co-creation with employees and customers. Consequently, in terms of procedural perspective, the company with innovation-oriented culture has more functional ways of changes and innovations development and their consequent incorporation in company’s practice (Sparrow, 2014, p. 132). In terms of Tidd and Bessant’s innovation audit, organisation of the company stimulates innovation, employees are involved in the development of innovative programmes, communication is effective, rewards are in place and team work prevails (See Table in Appendix 1).
Company’s learning from its innovation experiences
In support of the statement that Marriott International’s innovation strategy is as close to a conceptual ideal of Tidd and Bessant’s innovation audit as possible, a few aspects of SWOT analysis are provided. In terms of strengths, the company is a global multi-branch corporation, with various funds and innovation capacities. It is well represented in various national markets across the word, where it uses local resources and links for its development and innovation programmes. Its strategy of culture and people-oriented approach provides it with diversity and acceptance with various markets and cultural requirements (Culpan, 2014, p. 112). At present, the company does not have any immediate or obvious weaknesses. However, in a long-term perspective, its reliance on wealthy clientele and commitments to the local communities might result in the increase of expenses on securing the required standard of services, while the wealthy clientele might be affected by another global economic crisis. However, this threat of unpredictable future is a weakness common to any business on such a scale (Hacklin, 2007, p. 74). Regarding the opportunities, the company still has diverse markets to expand, new innovative services and products to offer to its present and potential clients. On the basis of the current relations in various aspects of the hospitality business, the company can expand its presence in the new fields of industry (Culpan, 2014, p. 113). Finally, the potential threats in the company’s external environment are not conditioned by competitions or usual market threats. In this regard, the universal threat might be the destabilisation of economic and political situation in the countries where company’s branches are represented. However, this is the matter of unpredictability of a political sphere rather than an aspect of company’s innovation strategy. In any case, company is careful in choosing the countries and markets of its presence and investments in innovations (Culpan, 2014, p. 113).
Recommendations for the future innovation strategy
In order to give certain recommendations for the company’s future innovative strategy, it is worth to evaluate the existing innovation strategy in terms of conceptual criteria. Observing company’s innovation strategy and practice from a theoretical perspective, it can be stated that the company made a step forward from Simon’s and Abernathy’s model of innovation as a problem resolution in terms of innovation (Hacklin, 2007, p. 87). The company did not only follow their process of stating the problem, finding relevant information for its resolution both in terms of semantic and synthetic categories of information, through its future innovation approach Marriott International stimulated creation of problems or rather desired perspectives in the future market of customers’ expectations (Afuah, 2003, p. 72). Thus, the company explores the potential of problem-resolution with currently available resources even before they arise. Evaluating company’s innovation approach in terms of Tidd and Bessant’s innovation concept or diamond model, it can be argued that in terms of strategy, the company has successfully and functionally incorporated innovation as part of its strategic overview (Tidd & Bessant, 2013, p. 32). Regarding the factor of this process, company pays attention to co-creation, meaning that interest of internal and external stakeholders is taken into account. Concerning organisation, the company has created functional innovation-friendly organisational culture and the environment stimulating active involvement of its employees in co-creation of innovative ideas. Finally, the company invests in implementation of learning form innovations through guiding manuals, creation of new training programmes and adapting its innovation projects based on the experiences of the previous innovation initiatives (Tidd & Bessant, 2013, p. 34).
In terms of the abovementioned discourse, it can be concluded that Marriott International is doing well in it innovation strategy applying a systematic approach. On the other hand, there still some aspects that the company can improve in its future innovation strategy. Although as it was demonstrated before, the company pays attention to the development of new IT technologies and follows the most recent trends in digital references of its customers, the expansion on new technological development in other spheres of life would be beneficial for the company’s future (Zacharias, 2011, p. 88). Expending company’s interest in new technologies in other industries can stimulate not only creative thinking of their application in the target industry but also would stimulate potential expansion of the company and its products to the new segment of the same or different industry. In this regard, company would be able to expand resources for its innovation including the unexpected inventions from a different industry that can be more functional and productive in hospitality business (Culpan, 2014, p. 135). Another aspect of cooperation with other field of technological development is that Marriott International can actually suggest certain criteria of technologies they require or find beneficial for its development; thus, the source of innovation would be process conduct itself.
Furthermore, in terms of the internal aspect of internal procedural aspect of innovation programme, it would be recommended to take extra steps in further stimulation of employees’ involvement in innovation development. In this regard, a similar campaign to what was done for the customers can be developed for employees. In order to make it interesting and stimulating certain extra benefits and promotional options can be foreseen for the successful and efficient innovative ideas (Gault, 2010, p. 52). Incorporation of such scheme into company’s practice will result not only in finding new ideas for innovation but also in spotting creative employees who are capable of implementing these ideas into practice and run training courses for other employees. This practice would result in further strengthening of the internal core of the company and demonstrate company’s commitment to innovations and the role of employees in it.
Another recommendation refers to the external environment of company’s development. From the outlined above discourse, it can be concluded that due to the mega-corporation size of the company, it seldom pays attention to the innovations and know-how of competing companies, mainly because Marriott International is usually the first to develop and implement the most advanced innovations (Culpan, 2014, p. 117). On the other hand, smaller companies or those that seem to be on downside today might become strong competitors tomorrow, probably not in all segments that Marriott International dominates, but the challenge might be sensible in the future (Hacklin, 2007, p. 86). Thus, it is advised for the company to monitor the start-ups companies that begin with some unconventional ideas of providing similar services yet in different manner. The nature of following trends in beginning companies is not aimed at buying them but in using their approaches as a stimulation of further innovation and improvement of their ideas according to the company’s objectives (Gault, 2010, p. 47).
Another relevant aspect of this monitoring is that the future field of competition can be relatively predicted and consequent innovations to overrule them developed. For instance, the idea of library-style coffee shops has evolved into an innovative suggestion that some of the hotel brands of Marriott International should have a library styled rooms with drinks service for relaxing, technology-free reading environment (Sparrow, 2014, 86). This idea is similar to the network of coffee shops that did not install Wi-Fi in order for people to communicate and read books instead of being on their tablets. In this regard, the popularity of this innovation was conditioned by promoting classic values of reading and communication. It was popular because it was different, and it is often that small beginning businesses have a great potential of innovating ideas that can have sensible impact on the market (Culpan, 2014, p. 114). Thus, even for such big company as Marriott International, monitoring innovation trends in small business in their target field is highly advisable.
Another essential recommendation for company’s future innovation strategy is paying attention to cultural specifics of innovations in various international markets, yet preserving the same standards of service provision and technological advancement across its branches (Gault, 2010, p. 51). Although the company has emphasised its culture-oriented approach in its corporate strategy and modifies services and business conduct according to local specifics, it needs to commit to the provision of equal technological services for all its brands. For instance, the installation of vending machine with fresh salads in Chicago Marriott International hotel is a demonstration of technological innovation, but installation of such machines across all brands of company’s hotels with diverse menus corresponding to cultural specifics of each location that would a great achievement of company’s culture-friendly innovations (Hacklin, 2007, p. 81).
In order to achieve this target of innovation, the company will have to invest in further research of cultural specifics and implications of the new technologies for the local market segment and brand’s popularity within the local population (Salim & Sulaiman, 2011, p. 120). This aspect of examining the long-term implications of technologies and innovations in for the local community is a casual element of company’s strategy and is a pre-requisite for its long-term success in the local communities (Afuah, 2003, p. 66). Thus, the company would have to pay more attention to culture-oriented innovative technologies and how they can stimulate its success. In this regard, it would be a good idea to start internal and external campaigns for the culture-oriented innovations, which would show an unbiased perspective of both employees and customers and would correspond to company’s co-creation approach to innovations. Another aspect in this regard is a lingual barrier that is often an obstacle in accessing various apps and online services. In this regard, it is advised to work on IT solutions for multilingual websites in order to attract more customers of diverse cultural background (Zacharias, 2011, p. 82).
Just as Marriott International has done in the past, when it looks into the future, it should pay attention to further expansion of the brand into other segments of hospitality business or looks into perspective sectors outside this industry (Gault, 2010, p. 48). The main rationale for this recommendation is that the company that has established itself globally on a high level, sooner or later will have to think about further stages of expansion. In this regard monitoring of the trends in various close industries would be beneficial for the company (Sparrow, 2014, p. 65). Another dilemma that companies like Marriott International have to consider, in terms of expanding to the new markets and targeting different categories of customers, is the preservation of the quality and brand name. The potential of targeting medium-income customers and introduction of new lines of budget hotels in new international markets would have to be analysed in terms of profitability and the ability to preserve quality of the brand and company’s high-value status (Gault, 2010, p. 47). Irrespective of the final decision, it is advised for the company to keep its expansion options diversified.
Overall, from all mentioned above, it can be concluded that Marriott International has a successful innovation strategy based on advanced technologies, co-creation, culture and people-oriented approach. The company has created a culture of innovation within its organisational structure and uses three sources of innovation: demographics, change of perception and new knowledge. In terms of Tidd and Bessant’s innovation concept, the innovation strategy demonstrated to be systematic and well-balanced. Regarding suggested recommendations, the company is already on the right track of development. It can conduct certain improvements in expanding company’s interest in new technologies in other industries; taking extra steps in further stimulation of employees’ involvement in innovation development through innovation campaigns; paying attention to cultural specifics of innovations and consider further expansion of the brand into other segments of hospitality business and other industries.
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Appendix 1: Tidd and Bessant’s innovation concept
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