Accor Group’s Management and Inclusive Strategy

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Table of Contents

Introduction
Accor’s Growth and Expansion Strategies
Accor’s Segmentation, Multi-Brand, and Rebranding Strategies
Accor’s Asset Management Strategy
Accor in the Context of the Ansoff Matrix
Conclusion
Reference List

Introduction

The hospitality market is the area where it is essential to take into account many factors to operate in a competitive environment successfully and provide customers with high-quality services. On the example of the French Hotel Group Accor (Accor), it is possible to trace the way of becoming from a small chain to one of the largest and world-famous brands. The use of appropriate development strategies allowed Accor management to gain recognition among guests and build a sustainable business with a stable profit. To evaluate the methods used to form the activities of this hotel chain, it is necessary to analyze what techniques its representatives used and what measures were taken to make the brand respected. Segmentation strategies, rebranding, and other business approaches will be used as assessment tools, and based on the history of the hotel chain, relevant conclusions regarding the optimal principles of leadership can be made.

Accor’s Growth and Expansion Strategies

The Accor chain with its many divisions has been represented in the American market in the late 20th century, and since then, permanent methods have been used to expand the business of the corporation (Thadamalla & Patel 2007). According to the authors, “the group took series of measures like mergers and acquisitions, product enhancements, product modifications, geographical market developments, re-branding of old-hotels, differentiation and consolidation through sell-off, etc. to grow faster” (Thadamalla & Patel 2007, p. 1). During the period of work, many efforts were made to turn several small casino hotels into a large network with an extensive client base and recognition both on the local and global markets. As Santos, Brochado, and Esperança (2016) remark, in the context of expanding the business, it is essential to take into account several economic factors, including not only domestic assets but also external market opportunities. As applied to Accor, this condition was met since the group has always managed to satisfy the desires of customers and still not to lose competitiveness in the hospitality business.

The first expansion of the chain was made in 1990, and in the future, Accor expanded the market of influence, opening its branches in Australia in 2000 and Asia in 2002 (Thadamalla & Patel 2007). At the same time, the European direction also developed successfully. With its main office in France, in 2007, the chain management “acquired control of 52 upscale and midscale hotels which consolidated its positions in Germany” (Thadamalla & Patel 2007, p. 3). According to Demirçiftçi and Kızılırmak (2016), the sustainability of the tourism business largely depends on how effectively the strategy of expanding and acquiring new assets is realized. The work of official representatives of Accor has been productive so far and, as practice shows, “the chain affiliation and location are the main accommodation establishments’ characteristics shaping hotel managers’ perceptions” (Ivanova & Ivanov 2015, p. 148). Therefore, activities regarding the chain’s expansion can be considered successful due to a well-thought-out strategy of hotels’ location and the attitude of their leaders.

Accor’s Segmentation, Multi-Brand, and Rebranding Strategies

The target market of the Accor Group was extensive at the beginning of the 21st century. As Thadamalla and Patel (2007) note, the chain’s managers sought to establish cooperation with BRIC countries and also established contacts with the representatives of the Asian tourism business. The desire to open new segments was natural since the corporation was prosperous, and additional affiliates were required. Along with other eminent chains, Accor introduced new hotels in North America, also increasing its customer base. According to Wang and Chung (2015), companies with officially registered segmentation can provide worthy competition. Therefore, Accor led a competent policy.

Accor’s multi-brand strategy implied the development of not only the hotel business but also other promising areas – casinos, restaurants, and travel agencies. The chain’s registered brands “were globally recognized” (Thadamalla & Patel 2007, p. 3). According to Silva (2015, p. 309), “Accor Hotels has developed the Ibis, Sofitel, and Novotel brands”. Such serious work was productive and had a positive result, which was the direct proof of a successful multi-brand strategy.

Accor launched its rebranding policy in 1993 and further, worked in Australia, Japan, Malaysia, and other countries (Thadamalla & Patel 2007, p. 5). This strategy provided an opportunity to attract customers and gain new opportunities. As Richard and Cleveland (2016) argue, the strategy of rebranding is not always easy to maintain since the sustainability of upgraded enterprises may be disrupted. Nevertheless, Accor used its available resources effectively to ensure that guests’ interest was constant. According to Vorkapić, Ćoćkalo, and Đorđević, D (2016), maintaining the sustainability of the hospitality industry is one of the top management’s priorities, which is particularly important if the chain is large. Therefore, based on the results of the work carried out by Accor, it is possible to denote a correctly coordinated strategy of rebranding.

Accor’s Asset Management Strategy

Because the management of the hotel chain under consideration controlled its assets closely and monitored the situation in the hospitality market, corresponding actions with its property were periodically performed. According to Thadamalla and Patel (2007, p. 7), “by 2008, Accor management planned to sell 535 hotels”. This fact does not indicate that the corporation was in dire need of money and was forced to offer its property to competitors. On the contrary, the chain had a stable profit all over the world, and the sale of the part of the assets was a well-thought-out move contributing to business development. As Kruesi, Kim, and Hemmington (2017, p. 93) argue, “keeping control over assets is important and that, even where market modes are possible, hotel organizations generally prefer to remain in control”. At the same time, the Accor chain had great potential for long-term growth, and no emergency interventions were required. Consequently, its asset management strategy was determined by the business policy of the corporation.

The chain’s services were extensive and affected various areas, including not only recreation but also leisure. Because Europe was a profitable destination for travel companies, the corporation invested enough money in the development of hotels in this region. Newell and McGreal (2015, p. 302) offer a list of the top ten hotel brands and note that Accor was one of the top three asset sellers for the period from 2009 to 2015. Moreover, this chain created a special program to protect “customers’ environmental concerns”, which attracted the attention of market participants (Yoon, Jang & Lee 2016, p. 1577). Therefore, Accor’s strategy of asset allocation was competent and successful.

Accor in the Context of the Ansoff Matrix

To assess the activities of the Ancor group of hotels, a special method of business analysis called the Ansoff Matrix can be applied. The essence of this technique is that a certain enterprise or several organizations under the same brand is evaluated in terms of specific characteristics. They are the market interest in services provided, the degree of penetrating business processes, diversification, and the development of certain products (Vanhove 2017).

By the course chosen by Ancor management, it can be noted that penetrating the market is one of the most stable positions of the corporation regarding this approach. As Alkasim et al. (2018, p. 191) remark, the market penetration strategy is “a strategy that attempts to improve a firm’s sales without leaving the existing product in the current market to compete with the existing rivals products in the same market”. According to Thadamalla and Patel (2007), Accor had ambitions to become one of the leaders in the field of economical and midscale hotels. Therefore, the desire of the leadership to penetrate as deeply as possible and remain in the first positions is justified and fits into the Ansoff Matrix.

Also, it is essential to pay attention to such an indicator as to product development. As Varela and Georgopoulos (2017) note, the capabilities of the organization are determined by the ability to develop the existing potential through improving its products sold. In the case of Accor, the corporation developed its services successfully and improved the quality of service. Furthermore, according to Bowie et al. (2016), consumer interest in goods is a criterion for effective work carried out by the company’s management. On the example of Ancor, it is possible to watch a gradual but stable period of development, which suggests that such an indicator as to the product development also fits into the Ansoff Matrix.

Conclusion

Various business strategies used by the Ancor group management can help assess the progress of the corporation’s development and draw conclusions about the success of the work done. The expansion of the sphere of influence and a competent policy of asset allocation was valuable for the chain to become one of the leaders in the hospitality market and to earn guests’ and investors’ trust. Some of Ancor’s indicators fit into the Ansoff Matrix and can be evaluated as effective mechanisms for the development of any hotel group.

Reference List

Alkasim, SB, Hilman, H, bin Bohari, AM, Abdullah, SS & Sallehddin, MR 2018, ‘The mediating effect of cost leadership on the relationship between market penetration, market development, and firm performance’, Journal of Business and Retail Management Research, vol. 12, no, 3, pp. 190-200.

Bowie, D, Buttle, F, Brookes, M & Mariussen, A 2016, Hospitality marketing, 3rd edn, Routledge, New York, NY.

Demirçiftçi, T & Kızılırmak, I 2016, ‘Strategic branding in hospitality: case of Accor Hotels’, Journal of Tourismology, vol. 2, no. 1, pp. 50-64.

Ivanova, M & Ivanov, S 2015, ‘Affiliation to hotel chains: hotels’ perspective’, Tourism Management Perspectives, vol. 16, pp. 148-162.

Kruesi, M, Kim, PB & Hemmington, N 2017, ‘Evaluating foreign market entry mode theories from a hotel industry perspective’, International Journal of Hospitality Management, vol. 62, pp. 88-100.

Newell, G & McGreal, S 2015, ‘The significance of hotel investment in global capital flows to real estate’, International Journal of the Built Environment and Asset Management, vol. 1, no. 4, pp. 293-306.

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Santos, M, Brochado, A & Esperança, J 2016, ‘Foreign direct investment patterns of global hotel chains’, Journal of Business Research, vol. 69, no. 11, pp. 5235-5240.

Silva, R 2015, ‘Multimarket contact, differentiation, and prices of chain hotels’, Tourism Management, vol. 48, pp. 305-315.

Thadamalla, JS & Patel, J 2007, French Hotel Group Accor’s growth strategies. Web.

Vanhove, N 2017. The economics of tourism destinations: theory and practice, 3rd edn, Routledge, New York, NY.

Varela, S & Georgopoulos, N 2017, ‘Competition as a critical factor of the strategic planning of hotel businesses’, Journal of Tourism Research & Hospitality, vol. 6, no. 3, pp. 16-21.

Vorkapić, M, Ćoćkalo, D & Đorđević, D 2016, ‘The importance of lean concept in sustainable development of enterprises with small scale production’, International Journal of Advanced Quality, vol. 44, no. 2, pp. 23-28.

Wang, YC & Chung, Y 2015, ‘Hotel brand portfolio strategy’, International Journal of Contemporary Hospitality Management, vol. 27, no. 4, pp. 561-584.

Yoon, D, Jang, J & Lee, J 2016, ‘Environmental management strategy and organizational citizenship behaviors in the hotel industry: the mediating role of organizational trust and commitment’, International Journal of Contemporary Hospitality Management, vol. 28, no. 8, pp. 1577-1597.

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