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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.
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