Starwood group’s portfolio included a total of 897 Hotels with 275,000 rooms across 100 countries that primarily cater to the upscale markets of the lodging industry. The company employs about 145,000 people and has its headquarters in White Plains, New York (Starwood, 2008).
It is clear that the level of competition in the hotel and lodging sector is very high. Hence it is essential that Starwood has to undertake immediate efforts to improve its services and market share in order to survive in this competitive environment. This consultancy report will analyze the company’s current situation and aim at improving the organization on the whole.
This method is based on the product life cycle theory. This provides a means to correctly give importance to the product portfolio of a business unit. It is essential that companies have a combination of both high growth products as well as low growth products. The diagram below explains the BCG Matrix.
Stars refer to businesses use huge amounts of cash and also generate large amounts of monies as well. Here the company has a high growth as well as high market share. These generally include businesses that have a large market share in a fast-growing industry. These businesses do generate cash, however, this is very limited as all of it is required to be used to keep in sync with the rapid growth. Businesses that are successful in this area mature to become ‘cash cows’, as the industry matures.
Cash Cows, this is where the investments are low and the growth is also low, however, the profits and cash generation should be high. Businesses with a large market in a slow-growing industry fall into this category. The investments are low for these kinds of business units however these generate cash that can be used as investments in other business units.