Internal and External Factors of Accor in Global Business Operation

The aim of this report is to discuss about the internal and external factors of Accor in their global business operation. PESTLE and SWOT analysis are being used in order to identify the major micro and macro factors for Accor. It is identified that there are number of positive and negative trends being faced by Accor in their business. It is also being concluded in this report that the decision making process of Accor is highly influenced by these micro and macro factors.

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Executive summary
The aim of this report is to discuss about the internal and external factors of Accor in their global
business operation. PESTLE and SWOT analysis are being used in order to identify the major
micro and macro factors for Accor. It is identified that there are number of positive and negative
trends being faced by Accor in their business. It is also being concluded in this report that the
decision making process of Accor is highly influenced by these micro and macro factors.

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Table of Contents
Introduction......................................................................................................................................3
Determination of the external environment.....................................................................................3
Determination of the internal factors...............................................................................................6
Conclusion.......................................................................................................................................8
Reference.........................................................................................................................................9

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Introduction
Accor group of hotels is one of the leading brands in the global hotel and hospitality
industry. Currently, they are having more than 4000 hotels around the world with having their
presence in more than 100 countries. They are having more than 250,000 employees to take care
of their guests (www.accorhotels.group 2018). Thus, Accor is having huge infrastructure in their
business operation. However, in the recent time, competition is increasing with the emergence of
more competing firms in the hospitality business.
This is creating the need for effective determination of the external and internal factors of
Accor groups in order to have the understanding about their effectiveness and competency in the
global market. This report will discuss about the external and internal factors for Accor and will
evaluate the factors that are having influence in their decision making process.
Determination of the external environment
Political factors  As discussed earlier, Accor is having their market
presence in more than 100 countries. Thus, they face the
diverse political scenario and factors in operating in the
global market (Mosco 2014).
 In addition, in the recent time emergence of diplomatic
issues between the countries is affecting the global
operation of Accor.
 Terrorism is one of the major political threats being faced
by Accor in the recent time. This is due to the reason that
countries majorly in the African and Asian regions are

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badly affected by terrorism (Ingram, Tabari and
Watthanakhomprathip 2013). Thus, Accor is facing the
threat of property loss and lack of guest.
 Difference in political environment between the countries
is further posing challenges in doing business in the global
market.
 However, the enhancement of trade and business
agreements between the countries in the recent time
including the free trade agreement is helping Accor group
to smoothly operate between different countries.
Economical factors  Average purchasing power of the global customers is
increasing and thus the demand for luxury stay is also
increasing.
 In the recent time, Accor has acquired number of domestic
hospitality brands in different countries. This is helping
them to fend off the competition in different markets
along with increasing the market share (Vahlne and
Johanson 2017).
 However, the increase in the competition in the global
hospitality sector along with emergence of local brands in
different regions is further affecting the profitability of
Accor.
Social factors  Due to the fact that Accor is having their market presence

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in different countries, they provide personalized service.
This helps them in having the positive and favorable
social environment (Gifford and Nilsson 2014).
 With the increase in the culture of touring and travel,
demand for Accor hotels is also increasing.
 However, with the rapid change in the social pattern and
trend, it is becoming increasingly difficult for Accor to
change their service offerings and service approach.
Technological factors  Technology plays an important role in determining the
effectiveness of the hospitality industry. In addition, rapid
change and development is witnessed in the recent time.
 Accor initiated different technological advancements such
as online hotel booking and prepaid cards. This helps them
to enhance the customer convenience (Sozinova and
Fokina 2014).
 However, it is also being identified that technology in the
hospitality industry is rapidly changing and it is becoming
more difficult for Accor to cope up with the change and
change their existing ones.
Legal factors  There are number of legal procedures to be followed by
Accor in relation to their customer safety and hygiene.
 Accor being the market leader in the global hospitality
sector is having different and diverse policies and

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practices to adhere to the legal standards.
 However, legal formalities are different in different
countries. Thus, it is difficult for Accor to follow the
different and diverse set of legal formalities.
Environmental factors  In the recent time, environment is one of the major factors
for the contemporary business organizations.
 With time, there are number of laws and regulations in
relation to the protection of the environment are being
initiated by different governments.
 Accor is having certification for following certain
environmental standards and they are also having
leadership in protecting environment.
 However, with the increase in stricter environmental laws,
it is becoming more difficult for Accor to adhere to.
Determination of the internal factors
Strengths  Accor is having the brand value of being the global market
leader. This helps them in the offering their services
effectively.
 Accor is having diverse service portfolio covering
premium and economical hotel accommodations (Parida et
al. 2014). Thus, this helps them in dealing with different

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social factor in different regions.
 Being the market leader in this sector, Accor is having the
access to huge expertise and financial resources. Thus it
helps them to initiate innovative technologies and
strategies for protection of the environment. It also
enables them to stay ahead in the competition.
Weaknesses  Accor is having higher fixed cost in the sector and thus the
ration of return of investments is low for them.
 This also restricts them to invest in different areas in order
to take on the domestic rivals. This is also increasing
competition for them.
Opportunities  Economy of the developing countries is rapidly enhancing
and thus the market opportunity is also increasing
(Gourinchas and Jeanne 2013).
 Increase in the diplomatic partnerships and agreements
between the countries will further create business
opportunities for Accor.
Threats  Emergence of political issues such as terrorism will
further pose threat for Accor in doing business.
 More global brands are entering in the hospitality industry
and thus threat of reduction in profitability is to be faced
by Accor.
Conclusion

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Thus, it can be concluded that the identified micro and macro factors will have major
impacts on the decision making process. This is due to the reason that upper level management
of Accor will take market entry decisions based on the political scenario on the particular host
country. On the other hand, they will leverage more on their strengths and opportunities in order
to overcome the potential external threats. Thus the decision making process will be heavily
influenced by the internal and external factors.

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Reference
Gifford, R. and Nilsson, A., 2014. Personal and social factors that influence pro‐environmental
concern and behaviour: A review. International Journal of Psychology, 49(3), pp.141-157.
Gourinchas, P.O. and Jeanne, O., 2013. Capital flows to developing countries: The allocation
puzzle. Review of Economic Studies, 80(4), pp.1484-1515.
Ingram, H., Tabari, S. and Watthanakhomprathip, W., 2013. The impact of political instability on
tourism: case of Thailand. Worldwide hospitality and tourism themes, 5(1), pp.92-103.
Mosco, V., 2014. Political Economy. In The Routledge Companion to Global Popular
Culture (pp. 35-44). Routledge.
Parida, V., Sjödin, D.R., Wincent, J. and Kohtamäki, M., 2014. Mastering the transition to
product-service provision: Insights into business models, learning activities, and
capabilities. Research-Technology Management, 57(3), pp.44-52.
Sozinova, A.A. and Fokina, O.V., 2014. Study of economic and technological factors influencing
development of services market. Life Science Journal, 11(7s), pp.318-321.
Vahlne, J.E. and Johanson, J., 2017. The internationalization process of the firm—a model of
knowledge development and increasing foreign market commitments. In International
Business (pp. 145-154). Routledge.
www.accorhotels.group (2018). AccorHotels Corporate Promise. [online] Accorhotels.group.
Available at: http://www.accorhotels.group/en/group/who-we-are/our-promise [Accessed 14 Jun.
2018].

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