Business

The company had experimented with franchising as a solution to the debt problem. But Bill Marriott was concerned that quality would vary from property to property, and he disliked giving up hands-on management control. In the late 1970s, Gary Wilson, the chief financial officer at the time, proposed a compromise: a broader array of customers, and the diminishing opportunity in a saturated market to build new full-service hotels.

Market research revealed a potential solution to both problems. Recognizing that not all customers needed 24-hour room service or 50,000 square feet of meeting space, in 1983, the company introduced the Courtyard brand. Hotels flying that banner would be less expensive and have fewer rooms and less public space. This was the beginning of Marriott's portfolio brand strategy.

Encouraged by Courtyard's immediate success, Marriott dramatically enlarged its portfolio, adding Residence Inn and Fairfield Inn in 1987. By 1995 Marriott had moved into the luxury market by acquiring a 49 percent interest in The Ritz-Carlton Hotel Company chain and, going beyond the traditional lodging business, by moving into the time-share and assisted-living markets as well.

That same year, the company launched its brand management initiative. The goal was, and continues to be, to maintain a delicate balance in which Marriott's culture is instilled throughout all the brands while each brand nonetheless maintains its own identity. Residence Inn, for example, focuses on the extended-stay market. But the brands also share a high-profile connection through Marriott Rewards, the company's frequent-traveler program.

Marriott's ability to manage the tension between expanding market boundaries through innovative brand strategies and meticulously focusing on tactical and operational execution has made the company highly successful as a shaper of this market.

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