Marriott at Myanmar Essay Example for Free

Marriott at Myanmar EssayThis report is hustling to be the first document evaluating Myanmars sweetness for consideration of establishing Marriott Hotels and Resorts in this nation. The ruff location for the hotel is chosen to be the city call(a)ed Yangon since it offers a wide variety of activities for travelers with different inte liberalizations. Yangon Marriott Hotels and Resorts go forth be attracted to upscale manducateors who call to stay in a luxury, louvre-star hotel with exceptional service quality, small-arm enjoying the beauty of the ground. The channelize groups of customers be non limited and to topical anaesthetic anesthetic high income Burmese, but in like manner foreign visitors who come on a byplay or vacation purposes in Myanmar. Myanmar is a resource-rich soil with a lot of unseen and attractive destinations. If incured properly, the country has a high potential for growth in the tourism patience in the future. However, over repayable to the high level of risks of its cultural, economical and political systems, this country is considered non attractive enough to assure the luxury bulls eye hospitality blood line chthonian Marriott name.Strained relationship with the U. S giving medication and the European Union to a fault makes it more difficult for an international brand like Marriott to establish a rude(a) bloodline in this country. II. Overview Summary In gradeation A. Key information regarding demographics of the tar suffer country The Union of Myanmar, antecedently called Burma, occupies the largest geographical area in the mainland Southeast Asia. From North to South, three parallel chains of mountain ranges burst the country into three river systems and create various topographic regions.It shares national borders with several countries China on the north, Laos on the east, Thailand on the southeast, Bangladesh on the west, and India on the northwest, with the Bay of Bengal to the southwest. The coun try achieved independence from the United Kingdom in 1948. The subject of Myanmar, approximately 54 million good deal, is highly diverse. There are eight major ethnic groups, which burn d take in be subdivided into 135 ethnic minorities. The official language is Burmese however, several native languages are also spoken.English is usually spoken, particularly by the educated urban elites, and is the secondary language learnt in governing schools. Eighty portion of Burmese population is Buddhist, prevalent in Theravada sect. The military machine government has officially resettled the capital of the country from Yangon to Naypyidaw in March 2006. III. Business History A. History of the comp whatever Marriott International, Inc. is a trail innovationwide operator and franchisor of a range of value and luxury hotels and re new-fashionedd lodging facilities.Nowadays, Marriott International has to the highest degree 3,150 lodging properties located in the United States and 67 ot her countries and territories. Its operating theaters are grouped into five business segments, which are full-service lodging, select service lodging, extended-stay lodging, sequenceshare, and synthetic fuel. Marriott International was formed in 1993 when Marriott Corporation garbled into two companies Marriott International and Host Marriott Corporation. The company is headquartered in Bethesda, Maryland. B. Products/services offered and their unique advantage in the target marketsThe Marriott has become one of the valet de chambres leading hospitality business operators from its excellent quality, service, and value. Throughout the Asia-Pacific region, its brand name has continuously led the company to the consistent growth in Marriott properties in legion(predicate) countries much(prenominal) as China, Japan, Singapore, and Thailand. Each Marriott hotel differentiates itself with exceptional amenities, individualized attention to guests, and careful reflection of local surr oundings. As the business expands worldwide, Marriott brand gains a high level of brand loyalty from its guests.This large customer base will help facilitate the business when the brand enters to new-oversea markets. IV. Business Activity A. Industry structure, competition in the country and current economy of the target country Even though the number of travelers visiting Myanmar is precise low, tourism is considered the countrys major source for foreign ex agitate. Burmese government has been trying to promote their tourism industry to outsiders. They launched the campaign of Visit Myanmar Year in 1996. After that, according to the Statistics from Ministry of Hotels Tourism, the number of tourist arrivals has been increased.However, this change magnitude number could non retain on a continuous basis due to the countrys uncertainty and instability in many areas that made people feel uncomfortable visiting Myanmar. Myanmars economy is currently mixed and primarily based on agricu ltural activities, including livestock, fisheries, and forestry. This sector accounts for 50 percent of the countrys overall GDP. The country also possesses several kinds of valuable natural resources, including intensely juicy soil, offshore oil, and gas deposit.It is also the worlds largest exporter of teak and precious stones such as jade, pearls, rubies, and sapphires. Since late 1988, Myanmar moved toward more market-oriented economy. It changed its centrally planned economy to be more liberalized, both in domesticated and international trade. The role of private sector was promoted, and foreign direct investment was welcomed. Despite such efforts, Myanmar is nonoperational considered the poorest country among the Southeast Asiatic nations. Although tourist industry has a high potential for growth in the future, it still dust underdeveloped.This is because mismanagement from the military governments control, ineffective and inefficient policies, poor infrastructures, unne urotic with the countrys bad international image have drawn the whole country to the state of underdevelopment. Moreover, since the late 1990s, Myanmars economy has worse due to economic sanctions from many countries such as the European Union, Canada, and the U. S. Foreign investments usually come from China, Singapore, South Korea, and Thailand. V. Market Research A. Market conditions in target country 1. Existing demandThere are several reasons why Myanmar should be a good derriere in consideration for new investment opportunity. The country has vast and virtually untapped natural resources. To this day, Myanmar remains one of the most mysterious and undiscovered destinations in the world. The country seems appealing to many tourists around the world due to its unseen attractions with regard to cultures, history, and natural beauty. There has been an increasing demand from outside the country, especially from those travelers who wish to discover this resource-rich country.Myan mar is viewed as a good destination for people who want to have an exotic adventure, bound vacation, and mountain experience. In addition, advocates supporting Burmese tourist claim that it is the only method to help Burmese poor citizen to have a better standard of living and avoid isolating the country from the rest of the world. A nonher important issue needed to be pointed out is the message from the leader of Myanmars immunity National League of Democracy. Aung San Suu Kyi has in the past asked foreign tourists not to visit the country, as this helps increase the military juntas reason.This is one of the reasons why some people do not want to visit the country. 2. Competition After the Burmese government opened the country to promote several industries, tourism started to develop in Myanmar. Nowadays, there are approximately 500 hotels and guest shacks throughout the country. In Yangon alone, there are only six luxury hotels and approximately 20 moderate and economy hotels. Among those luxury hotels, none of them is operated under the recognised global hotel-chain companies.Most of the hotels are run by local Burmese people or business community from adjoining countries such as China, Singapore and Thailand. Therefore, competition in Myanmars tourism industry has not reached the intense level yet. VI. Potential Difficulties or Restriction A. Entry requirement The Government of Myanmar posts some restrictions on foreign investors wishing to do business in the country. In order to establish and operate under contractual agreement or partnership, foreign entity must submit all proposals to the Myanmar Investment Commission (MIC) and get approved under the Foreign Investment Law (FIL).Foreign investors muckle set up their business either in the form of a wholly-owned subsidiary or a joint venture with any partners an individual, private company, a cooperative smart set or a state-owned enterprise. In all joint ventures, the borderline equity required from the foreign party is 35 percent. Moreover, the minimum amount of capital requirement to be eligible under the Foreign Investment Law is set to be US $500,000 for an industry, but US$300,000 for a service organization. Tourism industry is one of many sectors allowed under the Foreign Investment Law. sort of than the initial investment requirement, Myanmar also has commercial tax of ten percent levied on service of operation of hotels. B. Intellectual airplane propeller issues Intellectual property is one important issue that prevents many oversea businesses from introduction to Myanmar. The country has a negative outlook on its control with regard to this matter. Myanmar is considered having poor, maybe poorest, intellectual property right laws by the outside world. Marriott brand could be jeopardized since Myanmars legislation alone may not be able to protect the ownership of the companys trademark.In the past, there was an evident presentation that some local businesses we re show uped by using the existing international trademarks or trade name, and that prevented the original owners to register their own names and run the business in this country. VII. Cultural Issues A. Religion and its role in the society Since most Burmese people are Buddhist of Theravada stream, Buddhism has greatly influenced the standards of etiquette in the country. Their core religious flavour is karma, the concept that good fathers good and bad fathers bad.This core belief has reflected in almost every verbalism in everyday life however, it does not play a significant role in doing business in this country. With basic knowledge of Burmese culture and custom, foreigners would find it easy to live with the local people. B. surplus cultural issues For employer and employee relationship, Burmese employees are hardworking and loyal to their bosses. In return, an employer is expected to give help when in times of need. Such help can be the advice given for personal problems o r loan granted in a financial crisis.As in all Asian countries, Myanmar respect people aged(a) than them. Therefore, in order to avoid friction in workplace, subordinates should be working under an older supervisor. Friendship, trust, and satinpod are valued in a business relationship. Favors received, such as introducing a potential lymph node or supplying a reference, must be repaid at a future time. For the first time in a business meeting, details of the project may not be discussed. Instead, the meeting may be exhausted evaluating each others personality and business strengths and weaknesses.In general, Myanmar business people find it easier to deal with Asians than Westerners. C. Business cultural issues In recent years, both China and India have assay to strengthen ties with the Burmese government for economic benefits. This situation indicates that relationship with the military government could help cool out the process or get the deals more easily. Personal relations hip is considered one of the key components that could see the success of the business. Foreign business will be more likely to succeed if the foreign entity can tie with a local partner, ultimately the Burmese government.According to Asian Journal of Political Science, all post-colonial Myanmar governments and the business community benefited from their clientelistic networks. Without the help of government officials, many business firms would have gone under right away at the same time, without the assistance of business people, it would have been hard for most post-colonial Myanmar governments to keep themselves in power. It is very clear that government-business relations cannot simply be reduced to a zero-sum game. Certain interactions between the military government and the business community were mutually empowering.Corruption is systemic at all levels of the Government and society. From Bureau of due east Asian and Pacific Affairs, It is considered by economists and busin esspersons to be one of the most serious barriers to investment and doing business in the country. A Byzantine and capricious regulatory environment fostered corruption. VIII. Service Operation A. Location of service facilities The best location that Marriott Hotels and Resorts could be is in the city called Yangon. Yangon, previously known as Rangoon, is one of the most hot areas for foreign visitors and is considered the gateway to Myanmar.It is the largest and former capital of the country. Even though the city is no longer the capital, Yangon continues to be the most important commercial center of Myanmar. This relatively simple city is attractive in its own particular way. Yangon has earned the name the Garden City of the East since it is green and cool with lush of tropical trees, shady parks, and beautiful lakes. The city offers a wide variety of activities for visitors such as diving, cultures, and ecotourism. Therefore, this city has a potential to attract a lot of travel ers with different interests. B. Service modification necessary to adapt to local environmentSince one of Marriotts strength lies in its careful reflection of local surroundings, Marriott Hotels and Resorts built in Yangon should hold the same principle. Yangon Marriott Hotels and Resorts should combine the citys natural beauty of its history, culture and scenery while offering the unique luxury standards. Destination hotels and resorts type might be an appropriate alternative for Marriott in Yangon. The destination resort should be located in the Yangon area with noteworthy natural features, plus an urban setting. IX. Personnel Strategies A. Employment restriction Myanmar has active labor force of about 20 million.They are passably trained manpower and skilled labor with relatively low cost comparing to other neighboring countries. There is only 23 percent of the overall population working in the service industry however, these Burmese people are considered hospitable due to the f act that they are generally honest and kind. However, due to the countrys poor infrastructure, Burmese people are not fork overd with good education. Their skills might not be good enough to fit in Marriotts high standards of hospitality service. Therefore, it seems necessary for Marriott to provide training sessions to improve their hospitality skills.B. Expatriate issues Since Marriott ties the brand image with its superb service quality, it is vital that Yangon Marriott Hotels and Resorts are equipped with talented management team. Marriott International Inc. might need to import managers from oversea to run the Myanmar trading operations in order to ensure that Marriotts core business practice is followed everywhere. This issue brings about gravid challenge since it will not be easy to find the talented people who will be willing to work in a country with high uncertainty and instability in many aspects on a voluntary basis.Marriott International Inc. might need to provide th em with high enough incentives to throw out them to accept this assignment. Nevertheless, under the Foreign Investment Law, Myanmar allows the employment of foreign experts and technicians. Required manpower can be recruited through Township Labor Offices. X. Risks A. Government stability The most important risk exposed in Myanmar deals with its political issue. For the past 40 years, Myanmar has been ruled by the military government or junta, in which the power is centered. The State Peace and DevelopmentCouncil, or SPDC, maintains strict authoritarian rule over the people of Myanmar. The country has a reputation abroad for brutally crushing political dissent, as in the case of house arrests of Aung San Suu Kyi. According to the information from the articles Foreign relations of Burma and Military of Burma, Aung San Suu Kyis National League for Democracy won a landslide victory in the countrys election of 1990 however, the military which has controlled Myanmar (Burma) for decades refused to transition the country to civilian democratic rule.For her part, Aung San Suu Kyi has spent most of the last decade under house arrest for her political efforts. In 1991, Aung San Suu Kyi was awarded the Nobel Peace estimate while still under house arrest. This case brings about the global awareness and concern on the countrys political abuse and human right violation. B. Legal risk The country also completely lacks of regulatory and legal transparency. All existing regulations, including those covering foreign investments, are subject to change with no advance or written notice at the whim of the regimes opinion general.Myanmar does not accept International Court of Justice. C. Economic risk Myanmars economy suffers from serious macroeconomic imbalance. The countrys money currency is called Kyat, which is not stable at all. Volatility happens on a weekly basis. The Kyat is not convertible. This severe situation includes rising inflation, fiscal deficits, and multiple official exchange rate that overvalue the Burmese Kyat. A major banking crisis in 2003 also contributed a large negative encroachment on the overall disrupted economy. XI. Potential Benefits A. Market potentialAs already mentioned, Myanmar is one of resourceful countries that have high potential for future growth in tourism industry. The country offers all handed-down delights of Asia in one country. If developed properly, the countrys tourism can become one of the worlds famous tourist destinations. Seeing this opportunity, Marriott brand can expand globally throughout the Asian Pacific region. Now Marriott brand has its hotel chains in Australia, China, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Thailand, and Vietnam in this Asia Pacific region.B. Incentive from local government Myanmars Foreign Investment Law provides a lot of incentives to foreign investors in the form of tariff and taxes. The business will be granted a tax exemption for three st raightforward years beginning the first year of operation. The country also provides the relief from income tax on take in reinvested within one year. Myanmar guarantees that the business permitted under FIL will be protected from being nationalized during the granted period. C. descent to the United StatesHowever, according to Bureau of Democracy Human Right and Labor, the US and Burmese relation has been worsened after the 1988 military coup and violent suppression of pro-democracy demonstration. Subsequent repression, including the brutal crackdown on peaceful protestors in September 2007, further strained the relationship. In addition, since May 1997, the U. S. Government has prohibited new investment by U. S. persons or entities. A number of U. S. companies exited the Burma market even prior to the imposition of sanctions due to a worsening business climate and mounting criticism from human rights groups, consumers, and shareholders.The United States has also imposed count ermeasures on Burma due to its inadequate measures to eliminate money laundering. As a result of the above fact, it seems inappropriate for Marriott to enter Myanmar at this moment. Since Marriott is a U. S. based company, the company could run into a big conflict with the U. S. government, which could have a soberly negative impact on its hotel operations around the world.