Accor Hotels’ Marketing Strategy

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Table of Contents

Introduction
Level of Analysis Statement
Situation Analysis
Problem Identification and Discussion
Proposed Alternative Solutions
Works Cited

Introduction

Accor is a chain of hotels which operates in 92 countries around the world. The hotel has its headquarters in Paris, France. Founded in 1967 by Gérard Pélisson and Paul Dubrule, this hotel has over 3600 franchises in the five continents. It offers economy, budget lodging and luxurious accommodations in these facilities (Kwaku & Murray, 2004). This firm faced some challenges during its early years of operations, especially in attracting the high class customers into its stores. However, this changed in the 1980s and 1990s when it started experiencing rapid growth. The firm was able to expand its operations to other European nations and North America during this period. Currently, Accor has the largest number of hotels in various categories in Paris, France. This research seeks to investigate the marketing strategies that this firm has been using in the market, and how it has been able to manage the market competition.

Level of Analysis Statement

In this study, it was important to understand the strategies that Accor S.A. is using to manage the market forces within the home country and in the international market. According to Cook (2008), the external environment in the hospitality industry has remained very dynamic due to the changes that take place in the field of technology. In order to remain competitive, Accor must find a way of maintaining its internal environmental factors to be in line with the external environmental factors. In this report, therefore, the level of analysis will focus on both the internal and external factors. The analysis of the external factors will create awareness of the factors that this firm must be able to deal with in the market in order to remain competitive. On the other hand, the analysis of the internal factors will make it possible to understand how this firm is ready to deal with the external factors in order to achieve success (Cook, 2005).

*Figure1: The Leadership Structure at Accor S.A.*

Situation Analysis

According to Nash (2000), the best way of understanding the forces that affect the normal running of a business entity is to conduct a situation analysis. The analysis involves investigating both the internal and external environmental factors (Bradley, 2005). In this study, it will be necessary to investigate the internal and external environmental factors that affect the normal operations of the firm.

Market Analysis

At this stage it is important to analyse the current position of this firm within the industry. The following graph shows the current position of Accor in its life circle.

*Figure 2: Accor’s Life Cycle in the Market.*

As shown in the diagram above, the firm has achieved maturity in its market growth. Although the firm has been making an effort to spread its operations to the emerging markets in Asia and Africa, its market in Europe has been invaded by other emerging firms. This means that the rate at which it is losing its market share in Europe is almost the same as the rate at which it is gaining market share in these emerging markets.

The model that will be used to investigate the external environment of Accor is the PESTEL Model

These factors can be summarised in the table below.

Table 1: Summary of PESTEL.

Political factors	France is one of the most politically stable countries in the world (Lehmann & Winer (2008). Other countries where this firm operates in are also stable, except a few nations in Asia and Eastern Europe that have experienced some political tensions.
Economic factors	The economic environment has experienced a positive growth since the end of the 2008 global economic recession. Both the American and European markets have experienced a positive growth (Knight, 2006).
Social factor	The social factors in the market have acted in favour of the firm. People are embracing the culture of travelling from one part of the world to the other, especially due to the growing number of the middle class (Hooley, Nicoulaud & Piercy, 2011).
Technological factors	Technological factors have also played important roles in promoting development in this firm. With the invention of new technological equipment, the entertainment and other amenities at this firm for the customers have improved (Gabrielsson, Gabrielsson & Tomi, 2012).
Ecological factors	The issue of ecology has also been of concern as there is pressure from the international bodies for firms like this to reduce environmental degradation (Kerin & Peterson, 2010). This has forced the management to organise corporate social responsibility that focuses on environmental protection.
Legal factors	The legal environment has been very challenging for this firm given the fact that it operates in the global market. As Jain (2011) notes, a failure to follow the legal system in a given country can lead to serious operational problems for a firm.

4Ps can be used to further strategies used by this firm to manage the external forces

Table 2: 4Ps.

Product	The firm has been keen on offering superior services to its clients in the global market
Price	It charges fair prices to its products to attract more customers
Place	The management is keen to ensure that it has its products available to the customers where they need it.
Promotion	The firm has been using both mass and social media to promote its products in the international market.

It is important to understand the internal environmental factors that may affect the ability of Accor to deal with the external environmental factors discussed above. SWOT Analysis is one of the most effective tools that can be used to investigate these factors (Knox & Gruar, 2007). The table below shows the model, and some of the specific factors that relate to Accor. The SWOT Analysis below is based on a case study on the firm’s recent past operations.

Table 3: SWOT Analysis Model.

Strengths

Effective management structure introduce in the recent past
Highly skilled & motivated workforce
Global market experience
Effective communication strategies

Weaknesses

Bureaucracy in the firm’s current communication system
Limited marketing research
Slow pace in adopting change
Limited manager-employee free interaction

Opportunities

Expanding middle class
Increasing number of international travellers
Improving means of transport
Improved international security
Improved technology

Threats

Increasing rate of competition in the market
Threat of terrorism around the world
Increasing cost of operations
Increasing power of unions
Increased power of the suppliers

The table above has identified specific strengths and weaknesses that may affect Accor’s normal operations in various ways. The management should formulate a strategy that would enable it to use its strengths to overcome its weaknesses (Ansio & Mattila, 2009). The market also offers a series of opportunities that should be tapped in order to fight some of the threats that exists in the market.

Problem Identification and Discussion

Accor has faced some major and minor problems that have affected its normal operations in the market. In order to understand some of the problems that this firm has faced in the market, it is necessary to use some theoretical models of marketing. Porter’s Five Forces will be an effective model to use at this stage (Cavusgil & Shaoming, 2004).

Table 4: Porters Five Forces Model.

Competitor Rivalry	The major problem that this firm faces is the level of competitive rivalry in the industry posed by such companies as Hilton and Sheraton chain of hotels. This firm is facing serious competition from various competitors within the local and international markets.
Power of Buyers	Powerful buyers may also pose some serious problems, especially when they have a stronger power to dictate the terms of trade (Ferrell & Hartline, 2011).
Power of Suppliers	Powerful suppliers may ensure that the transactions favour them at the expense of the firm.
Threat of New Entrants	Some of the other threats include the ease with which new entrants can access the current market of the firm, and the substitute products.
Threat of Substitutes	Substitute products may consume a section of this firm’s market.

Competitor Analysis

One of the main competitors of this firm is the Hilton Hotels & Resorts which also has global market coverage. Hilton Hotel offers several of services, including a variety of meals, accommodations, and tourism services. One of the main strategies that this firm uses is to offer its clients tour services, especially for those who register with them as tourists.

Proposed Alternative Solutions

According to Walker, Gountas, Mavondo and Mullins (2012), there are some problems that cannot be eliminated within the firm. In such cases, it may be necessary to come up with effective solutions that can address such problems in order to minimise their impacts within the firm. According to Aaker (2009), it is important to find a way of dealing with problems that cannot be avoided within the firm.

Internal capabilities

Financial strength from the past successful operations is one of the main strength of this firm. Effective human resource management and highly qualified staff have also enabled Accor to deal with its challenges in the market. The firm has also maintained regular research to improve its market operations. The following are some of the areas this firm should emphasize on.

Segmentation: The marketing unit should identify segments that have the characteristics they desire in their customers (Aaker & Mills, 2005).
Targeting: The marketing unit should target the selected segments with the most desirable products (Cravens & Piercy, 2009).
Positioning: When the right market segment has been identified, it would be appropriate to position the products of this firm based on the characteristics of the customers.

Works Cited

Aaker, D.A & Mills, M. (2005). Strategic Market Management. New York: John Wiley & Sons. Web.

Aaker, D.A. (2009). Strategic Market Planning. New York: John Wiley & Sons. Web.

Ansio, T. & Mattila, E. (2009). Marketing Strategy Formulation: Pure versus Mixed Strategies. Strategic Management Journal, 30(12), 1097-1101. Web.

Bradley, F. (2005). International marketing strategy. New York: Prentice Hall. Web.

Cavusgil, S. & Shaoming, S. (2004). Marketing Strategy-Performance Relationship: An Investigation of the Empirical Link in Export Market Ventures. Journal of Strategic Marketing, 58(1), 1-21. Web.

Cook, J. (2005). Understanding Marketing Strategy and Differential Advantage. Journal of Business Strategy, 49(2), 137-142. Web.

Cook, V. (2008). Marketing Strategy and Differential Advantage. Journal of Marketing Management, 47(2), 68-75. Web.

Cravens, D.W. & Piercy, N. (2009). Strategic Marketing. Chicago: McGraw-Hill. Web.

Ferrell, O.C. & Hartline, M. (2011). Marketing Strategy. Mason: Thompson Learning. Web.

Gabrielsson, P., Gabrielsson, M., & Tomi, (2012). Marketing Strategies for Foreign Expansion of Companies Originating in Small and Open Economies: The Consequences of Strategic Fit and Performance. Journal Harvard Business Review, 20(2), 25-48. Web.

Hooley, G. Nicoulaud, B. & Piercy, N. (2011). Marketing Strategy and Competitive Positioning. New York: Pearson Education International. Web.

Jain, S. (2011). Marketing Planning and Strategy. Mason: Thompson Publishing. Web.

Kerin, R. & Peterson, R. (2010). Strategic Marketing Problems: Chicago: Pearson Education International. Web.

Knight, G. (2006). Entrepreneurship and Marketing Strategy. Journal of International Marketing, 8(2), 12- 32. Web.

Knox, S. & Gruar, C. (2007). The Application of Stakeholder Theory to Relationship Marketing Strategy Development in a Non-Profit Organisation. Business Strategy Review, 75(2), 115-135. Web.

Kwaku, A, & Murray, J. (2004). Antecedents and Outcomes of Marketing Strategy Comprehensiveness. Journal of Marketing, 68(4), 33-46. Web.

Lehmann, D. & Winer, R. (2008). Analysis for Marketing Planning. New York: McGraw-Hill. Web.

Nash, E. L. (2000). Direct marketing: Strategy, planning, execution. New York: McGraw Hill. Web.

Walker, O.C., Gountas, J.I., Mavondo, F.T., &, Mullins, J.W. (2012). Marketing Strategy: a decision-focused approach. Melbourne: McGraw-Hill. Web.

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