You are a recent business major graduate and a new manager in the supply chain management organization of Marriott International. The organization is looking to reduce the amount of money spent each year on basic supplies such as linens and towels, cleaning supplies, furniture, and appliances. You have been asked to explore the feasibility of establishing an electronic exchange (consortium) of other hotel chains and the suppliers of the items in an attempt to lower total costs. Required:
a. Explain how such an electronic exchange might operate.
b. What are some of the pros and cons of participating in an electronic exchange?
c. Identify several strategic and competitive issues that may complicate the formation of such a consortium.
d. Would you recommend that Marriott continue to explore the feasibility of setting up a consortium? Why or why not?