Part Two: Internal Environment 2.1. Company Goals Vision Statement: To be the #1 hospitality company in the world, leading on three success measures: loyalty, profitability and growth. Strategic Objectives Marriott has developed various strategies to attain their desire to be the most successful hospitality company worldwide. Setting specific goals for the company gives them a better direction in how to achieve them as well as how long it may take. Marriott realizes that close to half the population on earth is under the age of twenty-five.
To achieve this, the management needs to make viable and reliable business decisions regarding the operations of the entity on continuous basis (Taparia, 2004). The information contained in the four financial statements put the management in a better position of realizing this objective considering that it assists in the identification of the weaknesses and strengths of different organizations on top of showing important trends in their performance during different financial periods (Alvarez & Fridson, 2011). The comparative information provided in the financial statements assist the management to compare its past performances as well as its current one with those of its competitors in order to come up with efficient strategies to better a firm’s performance (Taparia, 2004). Calculation of different financial ratios from these statements specifically yields the information to be used by the management while undertaking all decision making exercises (Alvarez & Fridson,
This type of communication within B&M is probably the most important as it is the most common type of communication used and is vital in making sure that important business deals can be made and so customers and clients feel secure and can create an understanding with the company. With verbal communication one of the types of information that is given through this method is customer advice. Customer advice is used in verbal communication as it is the most effective, and the easiest way to give a message to a person in the company. Things like showing a customer a product or explaining to them the features of a product are used in this, the purpose of verbal communication within B&M are to convey information on the simplest and most efficient format when required and when it is best suited. And the purpose of helping customers get information on the products is to make sure they have the best understanding of what they are purchasing and that it is good for the companies reputation of creating an honest and helpful image that customers can rely upon when purchasing from.
A few benefits that GIS software has are having tables of data that can be combined into one location, and the data is organized spatially, or can be based on its physical location on a map. For a major real estate firm like Sperry Van Ness, GIS is probably the most important aspect of business because it allows investors and employees from the company to see where there investment is going and where, and what the locations are. This software can affect a lot of decision making because investors may look on
Marriott Corporation has three major business divisions: Lodging, which included over 360 hotels (as of 1987) and generated 41% of sales and 51% of profits; Contract Services, that provides catering and food services to institutions and corporations, and generated 46% of sales and 33% of profits; and Restaurants, that generated 13% of sales and 16% of profits. Marriott has four key elements of their financial strategy: Manage rather than own hotel assets; Invest in projects that increase shareholder value; Optimize the use of debt in the capital structure; and Repurchase undervalued shares. The company uses discounted cash flow techniques and assigns hurdle rates to new projects to evaluate potential investments, determine the “warranted equity value” for its common shares, and even determine incentive compensation for its employees. In order to invest only in projects that increase shareholder value, Marriott uses the CAMP model to estimate the cost of equity, or the shareholders expected return for equity, for each new project, based on which division the investment would be in. They then develop target leverage ratios and use the WACC to determine the cost of capital for the whole corporation as well as each of the three divisions.
The HR department is one of the most valuable departments in a company. Generally, the HR department has the most valuable input that could help the company make better decisions. By HR being strategic partner within a company, they could better understand what is needed to help them be successful.
Please refer to tab labeled “Calculations and Tables” for details of the calculations used and the Tables noted in our report. Should you have any questions or concerns, please do not hesitate to contact us. Respectfully Submitted, Group One, LLC Background and Problem Statement Marriott Corporation (MC) was started in 1927 and is currently a multibillion dollar business involving hotels, contract services and restaurants. MC manages hotels that range from moderately priced (Fairfield Inn) to high quality (Marriott hotels). Contract services provide food and management services as well as
A shareholders role is to invest money into the business to ensure that it is running efficiently and the way it should be running. They are interested in a good return in investment and how much profit the business makes. They mainly care about how much profit that is made by the organisation/business. Also, the other main thing that shareholders might want is to see their share of profit increasing and the value of their business rising. They influence and impact the business because the business may need money for it to keep running.
Pro forma financial information is generally used to illustrate the effects of transactions such as business combination, and change in capitalization. There are countless reasons on why companies use pro forma statement in their business, the most significant is the planning and control received when using pro forma. The process of using pro forma statements are less time consuming, they help businesses evaluate and make a better distinction between business plans (Scarborough, Wilson, & Zimmerer, 2009, p. 196). Pro forma statements are an excellent outlet for resources that will help a business forecast expected earnings should the company chose to merge with another company or even if the company wanted to sell off part of it operations (Scarborough, Wilson, & Zimmerer, 2009, p. 196). The pro forma statements are commonly used when applying for a business loan.
JULIO OLAGUE MARRIOTT CORPORATION: The Cost of Capital (Abridged) March 25th, 2015 Company Description Marriot Corporation is a major competitor in the lodging and food service industry in the United States. Its three major lines of business are lodging, which includes 361 hotels, contact services, which provides food and service management to institutions and airline catering through its InFlite services, and restaurants, which includes Bob’s Big Boy, Roy Rogers, and Hot Shoppes. Key Points (Changes to the WACC) Marriott’s WACC: Lodging WACC: Contract services WACC: Restaurants WACC: 8.57% 10.24% 7.55% 10.68% Recommendation Marriott Corporation should use a different weighted average cost of capital (WACC) for each division in order for projects to be valuated correctly. Share repurchases should only be done when there is excess cash to both, buy back the shares, and to fund future investment projects. EXECUTIVE SUMMARY Based on our weighted average cost of capital calculation (WACC) we determined that Marriott Corporation should use a different hurdle rate for each of its three divisions, as well as for the entire firm.