Instructor: Dr. Martin L. Martens
"Starwood Hotels and Resorts Expansion in China"
This Report is submitted in Partial Fulfillment for the Requirement of
MBA 522: Transnational Strategy
Faculty of Management
Vancouver Island University
Nanaimo, BC, Canada
Date: March 23, 2010
Starwood Hotels and Resorts Worldwide, Inc. is a U.S. based hotel and leisure a company operating in almost 100 countries worldwide. The company's business consists of two major operating segments: Hotels and Vacation Ownership and Residential properties. Starwood's hotel segment represents a worldwide network of owned, leased and consolidated joint venture hotels and resorts operated primarily under its brand names. The vacation ownership and residential segment includes the development, ownership and operation of vacation ownership resorts, marketing and selling vacation ownership interests (VOIs), providing financing to customers who purchase such interests, licensing fees from branded condominiums and residences and the sale of residential units.
Starwood mainly focuses on providing impeccable customer service along with its distinctive and premier properties.
This paper focuses on the expansion of Starwood's luxury hotel "The Luxury Collection" to China. Before planning any strategic expansion alternatives, the general economic and environmental conditions of the company's home country and the host country are analysed. Further analysis of China's hotel industry and the luxury market segment is provided and major differences between U.S. and China's hotel industry are identified. Two major competitors of Starwood have been identified and the various dimensions of Porter five forces have been discussed in detail for the company. As company will expand its luxury brand on the basis of its capabilities and resources therefore a complete in depth relationship among its resources, capabilities and competencies has been discussed in the value chain analysis. The Starwood's generic strategy and its strategic orientation are discussed in brief.