ASDE Assignment 1

Operating Models – Replication

Acad Group 4

Aalokita Pradhan – 082

Amandeep Sadhotra – 094
Divya Teja Katragadda - 022
Eshita Vyas – 186
Nihar Mehta – 123
 Company: Marriott International

Business Model

Marriott International operates its business units and hotels under the following models:
 Franchise/ Licensed model – Asset light business model
 Company operated model

In case of licensing model, MAR allows hotel owners to use the brand name and charges some
percentage on the rent earned from the sales. In company operated model, the hotels are owned or
managed by Marriott.

Also, Marriott uses RevPAR, calculated by dividing room sales for comparable properties by room
nights available for the period, as a useful indicator of their performance across globe. It is indicative
of the useful indicator of period over period change in revenue earned through similar property.

Operating Model

To identify the Operating Model of a company one needs to answer the following two questions:

Q1. To what extend is the successful completion of one business unit's transactions dependent on the
availability, accuracy, and timeliness of other business units' data?
 Marriott International can be said to have multiple business units such as Luxury Hotels (JW,
The Ritz-Carlton, St. Regis), Upper Upscale Hotels(Marriott Marquis, Design Hotels),
Premium Hotels (Sheraton, Westin, Le Meridien), Select Hotels (Courtyard, Four Points) and
so on
 These business units appeal to different customer segments (based on demography as well as
behaviour) and the brands within each unit operate in a total of over 4100 locations across the
world
 Huge number of transactions are carried out by the hotels/resorts/spas that fall under each of
these brands and the availability, accuracy, and timeliness of this data is not dependent on any
other brand, let alone business unit
 Ownership of maintaining accurate data at all points of time lies with local management team
of the individual brand
Inference: Marriott International operates with low integration as data sharing between its business
units is not requisite
Q2. To what extent does the company benefit by having business units run their operations in the
same way?
 Marriott International has worked with VMWare and IBM since 2015 to build a cloud-based,
agile data centre environment that has helped Marriott accelerate time-to-market for its
services, enhances guest experience around bookings and reservations and equipped the
employees with latest digital capabilities
 This not only helps Marriott provide a consistent, evolved experience to its guests across its
numerous sites round the globe but provides a scalable platform to maintain their growing
global footprint
 Apart from this, for enterprise wide finance support, Xerox closely worked with Marriott to
develop an effective document management solution for Marriott’s Shared Services Centre
Inference: Marriott International has greatly benefited by standardizing its business processes relating
to IT and Finance on top of a dynamic, centralized infrastructure

Conclusion: From the above inferences, we can conclude that Marriott International follows the
‘Replication’ Operating Model