Strategic Hospitality Management; PESTEL Porter Analysis of Accor Hotels

Strategic Hospitality Management; PESTEL Porter Analysis Accor Hotels

Executive Summary

The hospitality business incorporates all commercial entities associated with voluntary and recreational amenities marketed and offered to consumers for their business trips, diplomatic activities, and vacation. This means that not only does it consist of accommodation services, for instance, beds and breakfasts, motels, and hotels, but also it takes account of commercial activities, for example, events, cruise lines, entertainment, and transportation (Desai, 2019). If it is a desire rather than a necessity and is paid for along with non-refundable earnings for a holiday, it is a critical section of the hospitality industry. Since market competition is intense within the hospitality business, strategic management within the industry, or generating effective managerial strategies, in addition to procedures to have a prosperous hospitality company is vital to organization success. The purpose of the report is to develop a strategic hospitality management plan for Accor Hotel London.

Introduction

Accor has developed appreciations to Gerard Pelisson and Paul Dubrule in 1967. The company was initially the commercial venture and Operating Hoteliers, which formed Novotel Lille within its first year of operation (Group.accor.com. 2019). The inauguration of the Ibis trademark took place in 1974 along with the first connexion of Bordeaux SIEH that later on become the proprietor of trademark “Courtepaille.” Later on, the Hoteliers procured the Sofitel and Mercure brand in 1980.

SIEH managerial authority of Jacques Borel International Hotel Group and developed SIEH – Jacques Borel International. The group of hotels was rechristened in 1983, which gave rise to Accor, the brand label, which is currently identified in the global market. In 1990, Accor continued harmony along with its procurement plan with Motel6 and a year later, and the company acquired the Compagnie Internationale des Wagons-Lits and Tourism. In 1997, the Hoteliers hired Jean-Marc Espalioux CEO and in 2001, designed his authorised online platform; Accorhotels.com.

The group of hotels becomes a critical stockholder of Club Mediterranee, in 2005, rating at 30%. In 2007, Gerard Pelisson succeeded Jean-Marc Espalioux and marketed numerous group accomplishments. During the same year, the company acquired Kadeos and generated innovative marketing mediums consisting of All Seasons, MGallery, and Pullman (Group.accor.com. 2019).

The range of the hospitality and tourism sector is classified into five different categories namely; conference and events administration, travel, eateries, recreational, and managerial services in hospitality services; the Accor Hotel London fulfils this criterion.

Strategic Hospitality Management; PESTEL Porter Analysis Accor Hotels
Strategic Hospitality Management; PESTEL Porter Analysis Accor Hotels

Demonstrate an understanding of the theory and process of strategy and its application

The commercial strategy is concerned with all the choices in which a business makes about how to attain their organisational goals and objectives. According to Johnson and Scholes (Hiriyappa, 2018), strategy process is the possibility and course of a corporation over the long-term, which accomplishes the benefit for the company via its alignment of capitals in a dynamic market framework, to attain the requirements of the consumer base and to satisfy stakeholders anticipations (Aaltonen, 2017).

Generally, strategy is probable to arise from the variability of sources and a combination of strategic planning or strategic analysis. Johnson and Scholes point out “strategic lenses” that are four essential approaches to observing what can be meant by the word “strategy.” Strategic lenses are a conception of strategic management, which can be observed and executed on a commercial level, the four approaches consist of;

Strategy as Design

Design is a systematic improvement where policies and procedures are considered via effective scrutiny and appraisal. This aids the company to determine which strategy to employ and which course to undertake, once specialists within the sector have methodically studied. It is a top-down methodology that considers the contribution of commercial directors who are included in managing day-to-day activities of the company (Ansoff, et, al.2018). The method is typically appropriate when a main traditional shift is needed within the company and the personnel’s contribution is not appreciated, the design lens might similarly create postulations regarding the nature and tempest of the corporation.

Strategy as Experience

It is the view that future or expected approaches depend on the experiences attained from past plans. There is a resilient impact from the obtained intelligence and philosophy in the company regarding how things ought to be done. Changes within the company ought to be made repeatedly, and formerly employed strategies might be enhanced upon, nevertheless, according to Johnson and Scholes (Hiriyappa, 2018) strategy might be significantly impacted and accepted, for instance, making postulations. This thus means that strategy should engage consultations and negotiations to reach an amicable accord. Nonetheless, there are hazards associated that might take place as a result of failure to reach to changes within the environment by being excessively reliant on preceding events.

Strategy as Ideas

It concentrates on the necessity for multiplicity and novelty of dissimilar concepts united in the company. The strategy might then unify them via strong relations, collaborations, and reactions between people within the company and how they effectively manage and cope with changes within the company and the commercial structure.

Strategy as Discourse

Tactical discourse includes decisions and selections between different opportunities and generating assurance within the selected aftermath. This opinion is typically high in validity and stumpy in prudence and novelty, for instance, the semantic might be established as a resource for the administration then it transferred and illuminated, which might be sustained via authority and impact attained by executives where they can institute their legality as “strategy” (Ansoff, et, al.2018). It is essential to anticipate substantial impacts, for example, experience, and design lenses because of the scope of the company. The scope of the company defines if they can implement or embrace an approach that was formerly employed as it can cease to be useful if the company is being successful.

Strategic Management Process

Strategic management is the procedure of supervision, scheduling, and scrutinising to attain organisational goals and objectives. It aids a business to realise its market position and the anticipated market position in future; additionally, it takes advantage of corporate resources to generate an effective strategy, which will assist the business to get closer to its organisational objectives (Gürel, and Tat, 2017). Strategic management procedure has the following stages; environmental scanning, strategic formulation, strategy implementation, and strategy evaluation and control.

5 P’s of Strategy by Henry Mintzberg

The 5 P’s of Strategy method was established by the Canadian management expert Henry Mintzberg, along to create five illustrious tactical ideas for companies and institutions. The Five tactical ideas consist of plan, pattern, position, perspective, and ploy; the constituents permit organisations to execute the preferred strategy within a more practical approach. As pointed out by Mintzberg (Johnson, 2016), creating an effective strategy is a challenging task, thus, with the assistance of the Five P’s of strategy, the company can, at any rate, take account of multiple facets as probable and approach the policy from different standpoints. 

Plan

A strategy is a plan for coping up with organisational or market conditions. A plan has to be designed or created before probable activities or events are engaged, and it is also imperative that the plan is consciously and efficiently followed. Objectives can merely be attained along with an effective plan, and they allow executives to provide their teams with intelligibility and operates towards provisional appraisals and outcomes. Nonetheless, a clear and precise managerial strategy necessitates more than just a plan.

Ploy

At this point, the strategy is premeditated and implemented along with a precise purpose to surpass and beat the competition within the marketplace attaining the competitive advantage and edge.

Pattern

Here, the general strategy is materialised as a pattern bearing in mind the different interior and exterior conditions instead of being pre-intended in nature.

Position

At this point, the company created the strategy to shape a unique position or a distinctiveness within the marketplace via high-class products or amenities, attaining a competitive edge within the marketplace and customers’ mind. 

Perspective

Here, the strategy is created based on the structural philosophy and the approach at which the company views itself.

The 5 P’s of Strategy and The Process of Planning

The 5 P’s of Strategy approach ought to be a significant section of the company’s culture; however, it is also essential to analyse all these Ps on a particular capacity to create a fruitful and resilient strategy (Jogunola and Varis, 2018). These Five Ps of Strategy offer all the appropriate information and assists with the facets of examining, assessment, analyse internal business information, and marketing message. They might be employed as a concluding verification at the end of the planning procedure of an established strategy to confirm if there are any possible loopholes or discrepancies. It can assist in saving the company’s resources, such as money and personnel.

Critically analyse the internal and external business environments in which an organisation operates

SWOT Analysis of Accor Hotel London (Please see Appendix 1)      

Pest Analysis for Accor Hotel London- Political, Economic, Social-cultural, and Technological factors

Political aspects– The administrative division has a significant impact on the control of industries and companies, the buying influence of purchasers, in addition to associated corporations for this motive, the company ought to analyse the many criteria strategies so that the market can be profitable and standpoint is instead an energetic atmosphere.

Economical aspects – Salespersons ought to consider the condition of dealing in frugality in limited and continuing terms. This is particularly factual when scheduling for global advertising and selling.

Social and cultural facets– The social and cultural impacts on companies differ from one state to another. Significantly, such aspects ought to be reflected. For instance, what is the principal religion or the governing political party, what are the cultural disparities between men and women in the community? In the hotel business, the sociological features of the United Kingdom have not impacted the hospitality and tourism business; the United Kingdom is a relatively open-minded nation, and as a result, it is easier for hospitality and tourism businesses to thrive in a competitive market.

Technological aspects– Expertise and technological advancements is essential for the company’s competitive advantages and is a crucial carter of globalization, expertise, and innovation provides businesses with an innovative approach to interconnect with their customers. With the growth of internet connectivity, a majority of the reservations are completed through the internet. Moreover, technology permits for products and amenities to be produced by using cost-effective means and strive towards the attainment and maintenance of an improved standard of quality.

Porter’s 5 Forces of Competition (Please see Appendix 2)

Stakeholder Analysis of Accor Hotel London

Stakeholders are people with interest within a business or market. Companies need to acknowledge the influence of these individuals to effectively manage their operations, comprehend their significance in the market and mitigate their outcomes in the market.  A stakeholder study is a procedure of classifying these people before the project commences; ranking them based on their levels of involvement, importance, and impact in the venture; and defining how greatest to include and associate with each of these stakeholder clusters all through.

Critically evaluate alternative strategic options and plan for their implementation

In a profit-making company such as Accor Hotel London, for which profitability and market competition are essential, the company’s organisational goals and objectives vary from those of governmental or non-profit making organisations (Noe, et al., 2017) Similarly, aims for a team or department will impose a unique scope from goals for the firm in general. For instance, and based on the scope and market conditions, the management might desire to create effective strategies to increase productivity, realise an increase in the market share, enhancement of consumer fulfilment, and complete a project as directed by the budget.

To determine the company’s strategy, the company ought to comprehend the internal and external conditions or facets that influence the progress and stability of the firm. With that in mind, the executives might realise its definite advantages and utilise these to be prosperous. As a result, the firm and management can generate knowledgeable choices and execute its strategy efficiently. According to Gürel, and Tat, (2017) the creation of an effective strategy follows a three-stage procedure: examining the framework where the company is operating, ascertaining strategic possibilities, and appraising and choosing excellent opportunities.

A TOWS analysis model might assist the company’s interior and exterior scrutiny. It is a framework that unifies everything that the firm has learned from its SWOT analysis, and applies it to create an effective strategy, which either capitalizes on opportunities and strengths or reduces threats and weaknesses. The TOWS Matrix might be described as the tool to study, create, relate, and choose the business strategies to accomplish the general organisational goals and objectives of the firm, for instance, increased profits, improved brand value, and higher sales amongst other fundamental ones.

Ansoff Growth Matrix

Accor London Hotel has an established market segment that offers hospitality and tourism services at affordable rates. The group of hoteliers is currently marketing and selling more popular products and facilities within the market, which is advantageous for the company since it operates in a low-risk atmosphere due to its exceptional market reputation. Accor London Hotel is rebranding its facilities and products, for instance, modifying its trademark logo that is clear and easy to understand.

The company will increase their marketing campaigns within the market share and creating affordable rates, which is a strategy to promote their brand by using digital platforms to attract new consumers, thus allowing the company to stand out in the global hospitality industry. The firm makes use of loyalty packages as an approach to attracting potential customers and retaining the existing consumers.   

Value Chain Analysis of Accor London Hotel

Conclusion

Competitive advantages are essential for every business and industry. With the changes within the commercial models and growth of globalisation, companies in the hospitality industry need to create effective strategies that will enable them to attain competitive advantages and increase their market share. Competitive advantages not only aid a company to stand out compared to its competitors but also enjoy more revenues by offering high-quality products at cost-effective rates.   

 

Appendix 1

SWOT Analysis of Accor Hotel London

Strengths -One of the leading Hoteliers in the global market and hotel proprietor internationally -Years of experience and proficiency within the hospitality business -Cumulative bottom-line -Change to asset-light functioning structures along with turn on franchisees and administration bonds has improved their effectiveness margins -Accor Hotels has acknowledged the digitalisation around and is currently concentrating on online transactions -Their estimate structure is facilitating them to enhance sales Weaknesses -Other players in the marketplace are making use of their projections as well. -Since Accor hotels accommodate all market divisions, consumers find it challenging to associate with Accor Hotels as a trademark  
Opportunities -Since Hotel administration instruction is attaining approval internationally, Accor can create colleges in more states and provide their learners with extensive experience. This will convey in high-class service delivery within every country -With a market diffusion such as Accor’s, they can strategize unique packages for the consumers -Maintainable and wide-ranging development Threats -Highly competitive marketplace positions a persistent hazard and upsurges necessity for novelty in service delivery -The international financial situation can hinder sales within the extravagance and fashionable market divisions.

Appendix 2     

Porter’s 5 Forces of Competition   

Porter’s Five Forces is a context for examining a business’s competitive atmosphere. The quantity and influence of a corporation’s competitive competitors, prospective new marketplace participants, dealers, consumers, and alternative products and amenities impact a firm’s viability. Scrutinising these fundamentals can be employed as an essential guide to direct business strategy to realise an increase in competitive advantage and expand the market share. The model is broadly utilised to examine the commercial structure of a corporation in addition to its organisational approach. Porter branded five incontrovertible forces, which play a vital role in shaping every marketplace and business in the global market, along with a few cautions. The facets are regularly employed to quantify competition strength, desirability, and productivity of a company or marketplace. These forces are;

  • Rivalry within the market
  • Potential of new players into the business
  • Influence of dealers
  • Influence of consumers
  • Threat of alternative services or products

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