Category: Accor

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.

Richard, B & Cleveland, S 2016, ‘The future of hotel chains: branded marketplaces driven by the sharing economy’, Journal of Vacation Marketing, vol. 22, no. 3, pp, 239-248.

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.

Introduction

In Australia, the hospitality industry is one of the most developed industries which is characterised by the significant economic progress and revenues and by the close connection with the international market, depending on its trends. Travel, tourism, and hospitality industries are associated, and there are a lot of factors which affect the companies’ development within this economic and market sector¹.

The most influential companies which operate within the industry in Australia are Accor and the Intercontinental Hotels Group (IHG) which are also competitors at the international arena. To analyse the particular features of the companies’ strategic development and compare and contrast their strong and weak qualities, it is necessary to pay attention to the major factors which affect the companies’ strategic direction and their openness to innovations in order to predict the companies’ possible successes in the future.

The Particular Features of Accor’s Strategic Direction

Accor is one of the most largest and developed hotel groups in Australia. The hotel group includes more than 150 hotels of different brands which levels respond to the needs of all the demographic categories. The most popular hotel brands belonging to Accor are Sofitel, MGallery, and All Seasons².

To preserve the leader positions within the market, Accor should operate the effective strategy³. It is possible to focus on the role of workforce for the company’s development. Managers of Accor state that to compete within the industry, it is important to provide the high-quality services based on the top-class employees.

From this point, one of the main strengths of the company is the highly-skilled workforce (Appendix 2). However, to achieve the greater results in this field, it is important to improve the workforce planning in order to provide the necessary services.

The next point is the value-creating asset management to improve the company’s performance within the market. Today, the company intends to expand its impact, and it develops strategies to operate within the larger market segment. Thus, according to PESTELDI Analysis, the accents are made on such macro-environment factors as economy, social and cultural aspects, and technology.

The presence within the market is strengthened with references to adapting to the industry policies and responding to the unemployment rates with creating new workplaces, building new hotels (Appendix 1). Accor has also implemented the effective strategy to attract more franchisees and investors basing on modernisation of brands⁴.

Factors Driving and Limiting Innovation in Relation Accor

Much attention is paid to modernising the companies’ brands meeting the globalisation trends and improving the technologies available for customers. Moreover, the driving forces of Accor are the focus on innovation in technologies with references to using modern web-based central booking system, providing the high-level connectivity. The developed hotel network is important to control the whole system and guarantee the connection between the sectors (Appendix 3).

IHG Strategic Development

Hotel industry is the globalised industry that is why the most successful companies-representatives of the sector in Australia are those ones which operate successfully within the global or international market, and IHG is one of such companies⁵.

The company focuses on the economic and social challenges providing the workplaces for Aboriginal people in Australia and participating in the programs to reduce the levels of unemployment. To provide the high-quality services, the company emphasises the creation of necessary conditions for employees who receive needed training and additional education⁶.

The focus on environmental issues and the question of sustainability are the strong features of the company operating globally and following the global tendencies to meet the environment’s needs (Appendix 1)⁷.

In spite of the focus on the multi-brand system and strategy, the concentration on the luxury hotels is one of the company’s weaknesses, and it prevents it from attracting more customers from different social categories⁸. The company is successful in focusing on the sustainability and responding to the social and economic needs while concentrating on the issue of responsibility.

IHG and Innovation within the Market

The factors which drive innovation and improvement of the company are accents on low cost of operations provided and on the effective employee management. Moreover, the company uses the modernised and extensive database basing on the quality IT management to respond to the global trends⁹.

Nevertheless, there are factors which can be discussed as limiting the implementation of the innovation technologies by the company. The problem is in the fact the company uses rather general business and strategic models which can be not effective for implementing in all the IHC hotels over the world¹⁰.

The Australian hospitality industry develops intensively, and it is highly competitive that is why it is necessary to pay more attention to the usage of the innovative technological devices to meet the customers’ needs (Appendix 2, 3). From this point, the strategy followed by Accor is more effective.

Recommendations

• The success of the strategy used by Accor should be based not only responding to the global tendencies and customers’ expectations but also on the greater flexibility in relation to financial questions and investement;
• The Intercontinental Hotels Group should concentrate more on the implementing on the innovation technologies to attract more customers and satisfy their needs;
• It is important to develop the Intercontinental Hotels Group and improve the strategy, paying more attention to brands for all the social categories without focusing on luxury hotels¹¹.

Conclusion

Paying attention to the analysis of the strengths and weaknesses of the strategic management and focus on innovation in relation to the Australian most successful companies Accor and the Intercontinental Hotels Group which operate in the hospitality industry, it is possible to state that Accor will develop more effectively within the market because of the successfully set priorities.

Thus, the company focuses on the brand performance using the results of the technological development and contributes to the progress of the most attractive brands. Furthermore, the company regularly generates high revenues with references to the investors’ loyalty. The company focuses on the effective organisation and high-quality services.

However, these points are also typical for the Intercontinental Hotels Group, and the leader position of Accor in the future should be based on emphasising the role of the market scale and profitable growth within the industry. Thus, Accor is more adaptive to operate in the modern environment and succeed in relation to the future changes of the market.

Appendices

Appendix 1

Appendix 2

Appendix 3

Bibliography

Accor Brands, 2013. Web.

Challenges in hospitality industry, 2010. Web.

Cole, G, Strategic management, Cengage Learning EMEA, Australia, 2003.

Hubbard, G. & Beamish, P., Strategic Management: Thinking, Analysis and Action, Pearson Education, Frenchs Forest, NSW, 2010.

IHC: Corporate Responsibility Report, 2013. Web.

Intercontinental Hotels Group, 2011. Web.

Intercontinental Hotels Group: Case Study, 2010. Web.

Sadler, P., Strategic management, Kogan Page Publishers, UK, 2003.

Trott, P., Innovation Management and New Product Development, Prentice Hall, England, 2008.

Thompson, G., Strategic management, Cengage Learning EMEA, Australia, 2010.

Footnotes

¹ G. Hubbard & P. Beamish, Strategic Management: Thinking, Analysis and Action, Pearson Education, Frenchs Forest, NSW, 2010.

²Accor Brands, 2013.

³Challenges in hospitality industry, 2010.

⁴Accor Brands, 2013.

⁵IHC: Corporate Responsibility Report, 2013.

⁶ G. Cole, Strategic management, Cengage Learning EMEA, Australia, 2003.

⁷ P. Sadler, Strategic management, Kogan Page Publishers, UK, 2003.

⁸Intercontinental Hotels Group, 2011.

⁹ G. Thompson, Strategic management, Cengage Learning EMEA, Australia, 2010.

¹⁰Intercontinental Hotels Group: Case Study, 2010.

¹¹ P. Trott, Innovation Management and New Product Development, Prentice Hall, England, 2008.

Executive Summary

The current report highlights various marketing strategies for the Accor Hotels. In addition, implementation of these alternative approaches in the organisation is recommended. Accor is one of the top five hotel chains in the world in terms of geographic distribution and revenues. However, prior situational analysis identified several challenges faced by the entity. One of the major problems highlighted is the intense rivalry in the industry. The other main issue entails rapid loss of market share held by the hotel chain.

The following report proposes approaches that can be adopted by the organisation to overcome these challenges. The first alternative strategy involves turning the firm into a prospector. To this end, the organisation should increase its aggressiveness in the industry. It should also be more innovative than the competitors. The second option entails turning the firm into an analyser. Under this strategy, the organisation should focus on markets in which it is more competent.

In addition, the entity should minimise risks. On the contrary, it should follow on the footsteps of prospectors once an opportunity is identified in the market. One strategy is recommended out of the various alternatives. The preferred approach involves encouraging the management at Accor to focus on positioning service offerings. Business units should be made autonomous to optimise exploitation of the various market segments.

Alternative Solution One (AS1): Prospector Strategy

Accor faces stiff competition from such entities as Hilton and Sheraton chain of hotels. Consequently, the organisation should adopt a marketing strategy that improves its ability to compete. Competitive advantage would help the firm retain a large number of clients (Anderson & Vincze, 2000). Accor can use the prospector strategy to achieve this. The organisation should be more aggressive and proactive when approaching the industry environment (Sollosy, 2013). The firm should seek to identify opportunities and exploit them through product and market development (Petzer, Steyn & Mostert, 2008).

Gap Analysis

Gap analysis involves comparing the actual performance of the company to the desired situation or the potential of the firm (Anderson & Vincze, 2000). The analysis makes it possible to determine a strategic approach to attain envisaged marketing goals and objectives. Figure 1 below summarises the gap analysis findings for Accor’s AS1:

Currently, most of the services provided by Accor are targeted at the high-end markets (Accor, 2013). Regardless of its brand strength, the approach makes the organisation inflexible to market conditions. In addition, the market exploited is limited as a result of these gaps.

Changes to Current Marketing Strategy

The adoption of AS1 will lead to some changes in the current marketing strategy. Table 1 below summarises the proposed changes:

Expected Results

Implementation of AS1 will have significant impacts on the organisation and on the operation of the hotels. The effects will be evident in the finance, marketing, administration, and human resource departments.

Some of the expected results include:

• Additional human resources will be needed. For instance, opening new hotels will require more employees to work in them. The marketing department will also require additional personnel.
• Financial expenditure will increase due to the marketing campaigns and construction (or acquisition) of new hotels.
• Increased expenditure due to a decline in revenues. The expenses will reduce once the initiative starts generating returns.
• The focus of corporate strategic marketing will shift from high-end to middle-level segments.

Implementation

According to Wood (2004), successful implementation of strategies requires the management to strike a balance between present operations of an organisation and future desired outcomes. Consequently, Accor’s organisational structure and existing strategies should be incorporated into AS1. The firm will gradually phase out those strategies that drag down AS1.

The implementation of the alternative methodology will take into consideration three major elements. The three include management of Accor’s service capacity, customer demand, and service life cycle (Accor, 2013). In addition, the plan will require adjustments throughout the implementation process to factor in changes in the market environment. Table 2 below summarises recommendations for the implementation of AS1:

Source: Amadeus (2011), Hill (2007), Petzer et al. (2008), and Sollosy (2013)

Discussion

AS1 does not eliminate the problem of intense rivalry in the market. On the contrary, the aggressiveness of the prospector is increased. Accor will have to increase its innovativeness, explore new opportunities, and take additional risks.

Alternative Solution Two (AS2): Analyser

Accor intends to expand further into the global market (Accor, 2013; EYGM Limited, 2013). In addition, the management plans to maintain the present market share of the company. One of the issues that may affect the achievement of this objective is the threat of new entrants into the market segments. Situational analysis of Accor indicates that the rate at which the firm is losing its market share in Europe is equivalent to what it is gaining in the emerging markets.

Consequently, the second alternative solution for the hotel involves the application of the analyser strategy to the marketing initiatives. According to Sollosy (2013), analysers occupy a central oriented position in the market. They involve deliberate exploration of emerging markets and product opportunities (Wood, 2004). At the same time, analysers maintain their core products and customers (Sollosy, 2013). In addition, they rapidly follow prospectors into new market domains by improving their products.

Gap Analysis

Figure 2 below depicts a summary of Accor’s gap analysis in relation to the analyser strategy:

AS2 will complement, rather than override, the existing marketing strategies at Accor. Instead of concentrating on expansion through new outlets, AS2 will focus on enhancing sustainability of the already acquired markets. The strategy encourages opportunism and innovativeness among competitors.

Changes to Current Marketing Strategy

The marketing mix will be changed as indicated in table 3 below:

Expected Results

Implementation of AS2 will have the following impacts:

• Financial expenditure will increase as a result of the enhanced marketing activities.
• The need for human resource will rise, especially in the marketing department.
• Changes in the current management structure will be necessary. Accor’s decision-making organs will need improvements.
• Marketing will focus on retention, maintenance, and acquisition of new market share.
• Individual business units will require investments with moderate and low levels of autonomy.

Implementation

Implementation of AS2 will require the current marketing strategy to be modified to adapt to the analyser. Accor will need to be innovative to protect its existing market share. The organisation should also exploit the opportunities presented by prospectors. Analysers take few risks. As a result, they make few mistakes compared to prospectors. However, their commitment to stability is less than that of defenders (Sollosy, 2013). Actualisation of AS2 will require Accor to assume some attributes of a prospector and a defender, although in moderation. Table 4 below summarises recommendations for the implementation of AS2:

Sources: Amadeus (2011), Belch and Belch (2004), and Duncan (2005)

Discussion

AS2 will alter the operations of Accor, changing it from an aggressive risk taker and competitor to a mild but opportunistic market player. As an analyser, the organisation will expand into areas closely related to its core competencies as opposed to the development of new products (Petzer et al., 2008). In addition, instead of expanding into the new markets, Accor will gradually increase its presence in the existing segments. Consequently, the firm will maintain a balanced products’ portfolio. Products regarded as potential winners and stable income generators will be maintained (Duncan, 2005).

Recommended Solution (RS): Positioning

Accor can address the problems of intense competition and loss of existing markets by adopting Porter’s differentiation strategy of positioning. The approach will enable the organisation to stand out in the market. It will also be hard for rivals to imitate the company (Porter, 1980). Positioning entails identifying target markets and aligning them with service offering (Porter, 1980). Identification of the basis for competition precedes service positioning (Petzer et al., 2008).

Gap Analysis

Figure 3 highlights Accor’s gap analysis in relation to the recommended strategy of positioning:

Changes to Current Marketing Strategy

Currently, Accor positions its services on the basis of location (Accor, 2013). Implementation of the positioning strategy will lead to changes in the marketing strategy as shown on table 5 below:

Expected Results

Adopting RS will have major effects on the organisation. The criteria for service positioning will determine the outcomes. However, some changes are general.

• Extensive marketing campaigns in target markets and hotel locations will raise financial expenditure. The HR department will require extensive investments, especially in relation to personnel and marketing campaigns.
• Management of research and design, innovativeness, and knowledge will determine the success of the positioning strategy. Costs will increase as a result.

Implementation and Contingency Plan

Implementation of RS calls for the adoption of prospector, defender, and analyser attributes. Survival requires the organisation to create and sustain competitiveness by excelling in target markets (Aaker, Kumar & Day, 2004). Organisational restructuring will facilitate the implementation of RS. Table 6 below indicates recommendations for a successful adoption of the positioning strategy:

Positioning focuses on strategic business units. Consequently, high levels of autonomy for Accor hotel divisions are needed. In addition, varying the organisational structure on the basis of location will benefit the entity by taking into consideration national cultures. RS will be implemented in two phases over a period of three years as shown in figure 4 below:

Phase one will focus on activities related to planning initiatives. Such activities as mobilisation of resources should be carried out before the actual implementation. Phase two of the implementation process will deal with the actual groundwork. Strategy review and control take place throughout the actualisation process. Monitoring and evaluation ensures that corrective or improvement measures are put in place.

Discussion and Conclusion

RS will address the issues faced by Accor by enhancing the attainment of a competitive edge, maintenance and strengthening of existing markets, and expansion into new segments. According to Porter (1980), positioning does not develop competitive advantage. However, it helps the organisation to sustain its competitiveness. Accor is a market leader with immense resources, abilities, and skills. The attributes support the company’s market positioning. However, a comprehensive marketing strategy is missing. The strategy is needed to overcome challenges faced by the entity. Positioning helps the company to address these issues.

References

Aaker, D., Kumar, V., & Day, G. (2004). Marketing research (8th ed.). New York: John Wiley & Sons.

Accor. (2013). A new voyage begins: 2013 business review. Web.

Amadeus. (2011). Transform your growth strategy now: Remove barriers between hotel technology marketing and operators. Web.

Anderson, C., & Vincze, J. (2000). Strategic marketing management: Meeting the global challenge. Boston: Houghton Mifflin Company.

Belch, G., & Belch, M. (2004). Advertising and promotion: An integrated marketing communications perspective (6th ed.). New York: McGraw-Hill Irwin.

Duncan, T. (2005). Current issues in the global hospitality industry. Tourism and Hospitality Research, 5(4), 359-366.

EYGM Limited. (2013). Global hospitality insights: Top thoughts for 2014. Web.

Hill, C. (2007). International business: Competing in the global marketplace (6th ed.). Boston: McGraw-Hill.

Petzer, D., Steyn, T., & Mostert, P. (2008). Competitive marketing strategies of selected hotels: An exploratory study. Southern African Business Review, 12(2), 1-22.

Porter, M. (1980). Industry structure and competitive strategy: Keys to profitability. Financial Analysts Journal, 36(4), 30-41.

Sollosy, M. (2013). A contemporary examination of the Miles and Snow strategic typology through the lenses of dynamic capabilities and ambidexterity. Dissertations, Theses and Capstone Projects, 552, 1-144.

Wood, R. (2004). Delivering customer value generates positive business results: A position Paper. Futurics, 28(1/2), 59-64.

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).

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.

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.

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

Table 2: 4Ps.

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.

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 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.

Accor uses an integrated marketing strategy that includes diverse platforms that maximize exposure. According to Damnjanović, Lončarić, and Dlačić (2020), Accor leverages the value of paid media, including “Facebook, Twitter, YouTube, Pinterest, and LinkedIn” to sell its brand (p. 240). Its other paid digital marketing tools are brand sponsorships, such as the Australian Open, sponsored search advertising (Google Adwords), and partnerships with review sites – Trip Advisor and Trivago. Its unpaid media options include customer mentions, recommendations, or social media posts on travel experiences. In this case, Accor has no control over the content or how the brand is represented. Its owned media include websites (all.accor.com and brand.com), the Accor application, web partnerships (OTAs and restaurants), free magazines, and newspapers availed through its app.

Omnichannel marketing gives a seamless shopping experience through brick-and-mortar retailing augmented by internet content. Some elements of this multichannel sales approach useful to Accor include integrated channels – website and Accor app for booking and in-app room services – and touch-and-feel aspects of offline shopping are merged with digital content by, for example, photos on Pinterest (Brynjolfsson, Hu, & Rahman, 2013). Another characteristic is social selling through recommendations and reviews. It is also data-driven (Accor’s guest online feedback platform) to understand customer interactions, including hotel visits, for targeted ads.

Accor can combine traditional marketing tools with digital sales approaches to maximize exposure. Channels such as TV, radio, and free travel magazines can help acquire customers and draw them to digital platforms. Incorporating its brands into TV ads featuring digital influencers or celebrities with a large following on Instagram is one way Accor can increase consumer social engagement and sales (Wharton University of Pennsylvania, 2017). Additionally, an omnichannel approach will entail a pull strategy for viewers seeing ads or sponsored events, such as the Australian Open, on traditional media and a push tactic once they connect to Accor’s social media and website.

References

Brynjolfsson, E., Hu, J., & Rahman, M. S. (2013). Competing in the age of omnichannel retailing. MIT Sloan Management Review, 54(4), 22-29.

Damnjanović, V., Lončarić, D., & Dlačić, J. (2020). Digital marketing strategy for Accor Hotels: Shaping the future of hospitality. Tourism and Hospitality Management, 26(1), 233-244.

The Wharton University of Pennsylvania. (2017). A new marketing royalty: Why digital influencers are on the rise.Web.