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Starwood Hotels - MGMT 466

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Eric Stroope

on 24 April 2013

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Transcript of Starwood Hotels - MGMT 466

By: Rob Harwood, Eric Stroope, Steven Frazee, Katie Mason, Jordan Moran, and Nick Fordyce Commitment Statement
Vision & Mission
Starwood KEY Facts(pun)
Key to SPG room
Key to Preferred room
Key to Gold room
Key to Platinum room
Major Products
Hotel accommodations
Vacation Ownership
Residential Ownership Overview Luxury
St. Regis ® 30
The Luxury Collection® 85
W® 44
Upper Scale
Westin® 192
Le Méridien® 96
Sheraton® 415
Select Service Hotel
Four Points® 171
Aloft® 62
Element SM 10

Owned 53
Managed 547
Franchised 521 Growth Potential
1-Year Sales Growth 12.3933%
1-Year Net Income Growth 14.9284%
1-Year Employee Growth 11.039%

Competitive Advantage
Rewards program
Unique upscale accommodation Growth & Advantage Political/Legal
Affordable Care Act
The Hotel and Motel Fire Safety Act
American Disabilities Act
Global expansion plan
Modifies each locations 'experience'
Euro struggles
Target wealthy travelers
Green movement General Environment Analysis Value
Brand Management is the most valuable asset
Starwood Preferred Guest Loyalty Program (SPG)
Only luxury company with no capacity controls and no blackout dates
SPG Program
Brand Recognition
Organized to Capture
Strong Marketing Expertise VRIO Framework Resources:
Luxury Resorts & Hotels
Hotel websites/e-travel sites
Innovative H-R Department
Brand Recognition & Reputation
Human Capital/Service Value Chain Analysis: Internal Analysis Operations (3 Categories)
Operation of Hotels, resorts, Vacation ownership (1,134)
Development of Vacation ownership
Financial activities for interested parties
Starwood's hotel websites, e-travel sites, reservation call centers
Travel Agent Education Program- special rates based on availability
Marketing & Sales
Starwood Preferred Guest Loyalty Program
World-Class Global and Field Sales Teams
Powerful Central Marketing Channels
Exceed business and leisure activities that guests expect through their top products and friendly service Value Chain Analysis-Primary Activities Firm Infrastructure
Maximize shareholder wealth
Provide highest quality service to customers
Human Resource Management
Starwood's Branded Guest Service
Six Sigma
Technology Development
Investment in the fastest innovative products/services
Starwood's CRM System
Has consistent service to identify signals to lower total cost
Fast inventory management system and buying power for future investments Value Chain Analysis-Support Activities Industry Analysis Industry Analysis Focused Differentiation
Expensive, target wealthy travelers
Now, traveling high-end business men and women
Luxurious and extravagant experience
Personalized and superior customer service
Starwood Preferred Guest program Business Level Strategy Moderate levels of Diversification
-Related Linked
Control 9 major hotel brands
Vacation Timeshare
Residential Condominiums
W Hotels catalog
Westin Heavenly Bed Corporate Level Strategy Challenge: Trying to double current global presence within the next five years
Recommendation: Only expand to countries with stable economy and political system
Challenge: Retaining senior executives and key employees
Recommendation: Pay employees at or preferably above market value Challenges & Recommendations Threat of Entry: Moderate
Hotels are capital intensive
Prime real estate is scarce
Differentiate products through innovation
Power of Suppliers: Moderate
Developers and Real Estate Companies
Information Technology Systems
Power of Buyers: Moderate
Price sensitive except in premium market
Innovation is key, competing on price alone is difficult
Loyalty programs can reduce buyer power Threat of Substitutes: Moderate
Camping facilities
Campers and RVs
Bed & Breakfasts

Rivalry Among Existing Competitors: Strong
Very mature industry
Several established companies
Variety of independent smaller hotels
Major competitors: Marriott, Hilton, Hyatt Hilton
540 properties in 78 countries
Waldorf Astoria, Double Tree, Embassy Suites, Hampton Inn
Most recognized name in the industry
Hyatt (3.91% Market share)
500 properties in 46 countries
All Hyatt names
Caters to business travelers
Most earnings are from the US
Marriott (11.70% Market share)
3,700 properties in 74 countries
Ritz Carlton, Courtyard, Residence Inn, Gaylord
Most earnings are from the US
Highest domestic exposure of US brands Competitor Analysis Ahead
Very strong brand image
Property bases in prime locations
Well positioned branding and quality of service
Loyalty program which increases switching costs and exposure to their properties
Revenues don’t match up with the scale of their operations (48% of properties are outside N. America, but only 36.7% of revenues are)
Substantial amount of debt
6.26% Market Share
Growing lodging industry abroad and in emerging markets How Starwood Compares Profitability Liquidity 2012 Industry Leverage 2010 Leverage Activity Shareholder’s Return
Full transcript