3 Lessons to Learn From the Marriott-Starwood Merger

Entrepreneurs should pay close attention to how these two hotel chains merge their brands and strategies.

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By AJ Agrawal

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We've just passed the one-year anniversary of Marriott and Starwood Hotel's merger announcement -- and the happy couple is settling in just fine, having completed the $13 billion acquisition in September of this year.

Related: Sheraton-Owner Starwood Accepts Higher Takeover Offer From Marriott

Though the announcement sounds a bit like marketing spin, the news that the company is now the largest hotel chain in the world is accurate. With over 5,800 properties and 1.1 million rooms, this new hotel empire is vast.

As an entrepreneur, you may find this merger interesting -- and not just because your Marriott Rewards and Starwood Preferred Guest status will get you more goodies.

More than that: There's a lot you can learn here. From how the new, enlarged company has handled guest transitions, to the strategies it's applying to company growth, this deal is a veritable gold mine of ideas for those just getting started on their own ventures.

Here are three key takeaways for entrepreneurs:

1. Give customers more to retain loyalty.

Quite possibly the most publicized aspect of this merger is that the two rewards programs will combine, allowing those who have both programs (entrepreneurs, as frequent travelers, are included here) to get more stuff, faster.

A major perk? Marriott hotels -- all of them and every room, even the luxury ones -- are cheaper than the top-tier Starwood hotels. That means that if you're a member of Starwood Preferred Guests, you'll be able to get the fancy rooms without paying more . . . which is a great way to bring back customers who may balk at big rebrandings otherwise.

2. Expanding globally is easier than ever.

Part of the big news is that the chain is present in 110 countries -- out of 195 total countries in existence. So, how are they possibly able to manage them all? The answer is cloud computing, big data and all of the communication technology available. What does this have to do with you, perhaps a solo entrepreneur? You can do the exact same thing.

Related: Marriott Offers Lowest Rates to Loyalty Program Members

Many think of the term "global startup" as a politically correct description of a startup that is more interested in saving money (by not having a central office and outsourcing what they can), than serving a variety of markets.

But this doesn't have to be the case. Marketers, salespeople, business developers and community promoters -- in place of developers and designers -- can be quite adept at adapting a small company's message to an individual community.

3. Talk to competitors.

This is a bit of a tough pill to swallow for some, but every time there's a large merger, it means one universal truth -- both of the companies involved have perceived that the benefits outweigh the risks of working with their competitor.

For most entrepreneurs, this will never be an issue, but for some, it will be. Generally, mergers happen when two companies that offer almost identical products to different markets join together. Generally, the one that is larger buys the other, but keeps all assets and employees. These deals are messy and complicated, but often, quite worth it.

Related: How to Position a Brand for Breakthrough Success

If you see a competitor selling almost the same thing as you, but that competitor successfully appeals to a different demographic (meaning "different" by way of a separate geographical location or a brand that resonates differently ), open a conversation about combining companies.

That conversation may very well catapult you into the realm of Disney and Pixar.

So, no matter how you feel about the Marriott-Starwood merger, there's one thing that everyone can agree on: These were both highly successful brands, and it behooves entrepreneurs to watch their combined movements from here on in -- and the strategies that they adopt for future success.
AJ Agrawal

Founder of Verma Media

AJ Agrawal is the founder of Verma Media, a marketing agency that focuses on emerging tech, like blockchain and AI, and on cannabis companies.

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