Accor SWOT & PESTLE Analysis

Table of Contents
INTRODUCTION.....................................................................................................................................2
RESEARCH FINDINGS..........................................................................................................................2
BACKGROUND....................................................................................................................................2
PESTLE ANALYSIS.................................................................................................................................4
POLITICAL...........................................................................................................................................4
ECONOMIC..........................................................................................................................................5
SOCIAL..................................................................................................................................................6
TECHNOLOGICAL.............................................................................................................................6
LEGAL...................................................................................................................................................7
ENVIRONMENTAL.............................................................................................................................8
SWOT ANALYSIS....................................................................................................................................9
STRENGTHS AND WEAKNESSES.................................................................................................10
OPPORTUNITIES AND THREATS.................................................................................................11
HOW THEY RELATE......................................................................................................................13
KEY FINDINGS FROM PESTLE AND SWOT ANALYSIS..........................................................13
HOW THEY INFLUENCE DECISION-MAKING PROCESS........................................................14
CONCLUSION........................................................................................................................................14
REFERENCES........................................................................................................................................15
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INTRODUCTION
Da Nang is a famous tourist city in the middle of Vietnam and in recent years the tourism
industry is on the rise. It is possible to see the number of hotels with different standards being
built every year from 3 stars to 5 stars. This report is for Accor Hotels and its purpose is to
analyze the internal and external factors that may affect the opening of a Novotel Da Nang Hotel.
More specifically, it shows the positive and negative effects of the macro environment. The
PESPLE analysis will show the positive and negative factors that affect the business. In addition,
the SWOT analysis will show strengths and weaknesses, as well as how they affect the decision-
making process.
RESEARCH FINDINGS
BACKGROUND
Accor Hotels comprises complementary brands that are recognized and appreciated around the
world for their quality of service: Raffles, Fairmont, Banyan Tree, Sofitel Legend, Rixos, So
Sofitel, Sofitel, Onefinestay, MGallery, Dhawa, Cassia, Pullman, Swissôtel, Angsana, 25hours,
Grand Mercure, The Sebel, Novotel, Mercure, Mama Shelter, Adagio, ibis, ibis Styles, ibis
budget, JO&JOE, hotelF1, Thalassa sea & spa. (Accor, 2018). Besides, The Accor Group is the
European leader and a global operator in its two core businesses, Hotels and Services. It also
operates in travel agencies, casinos, restaurants, and onboard train services. (History, 2018)
Novotel Da Nang was establishes on April 30 2013. (Thethaovanhoa.vn, 2013) This is the first 5-
star hotel of international standards of Da Nang, belonging to Sun Group and under the
management of Accor Hotels Group. Novotel Da Nang is located at 36 Bach Dang Street, Hai
Chau District, Da Nang City, Viet Nam. It is Da Nang’s first upscale internationally-managed
hotel with serviced-apartments, with the highest and hippest panoramic bar in the city alongside
world-class facilities and restaurants. (Novotel, 2018)
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It has 323 rooms, 37 floors, 3 luxury floors. There are 9 types of rooms: superior, deluxe,
executive, suite, studio apartment, one bedroom apartment, two bedroom apartment, three
bedroom apartment, and presidential suite. (Novotel, 2018)
Novotel Da Nang Premier Han River features a spa, gym and restaurant and the bar with
swimming pool in individually and extensively decorated. Novotel also offers conference and
meeting rooms, wedding hall, ball rooms and outside catering. (Novotel, 2018)
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PESTLE ANALYSIS
PESTLE Analysis is an analytical tool for strategic business planning, marketing planning,
organizational change, business and product development and research reports. PESTLE is a
strategic framework for understanding external influences on a business. (Processpolicy, 2018).
PESTLE Analysis is used to examine the current and future state of the industry an organization
belongs to. This helps in the strategic planning and gaining the competitive edge over the other
firms in that industry. (AbhaPandey, 2011).
PESTLE is an acronym stand for Political, Economic, Social-cultural, Technological, Legal and
Environmental.
POLITICAL
Positive Negative
Vietnam is considered a country with high political
stability, very important for economic
development.
The level of safety and friendliness in Da Nang is a
decisive factor in the number of tourists.
Da Nang also has policies and support for domestic
and foreign businesses, especially in the hotel
industry.
The lack of transparency in politics will affect
state-owned enterprises
Viet Nam is considered as a high political-stable country, ranked 30/153 countries in terms of
political stability in 2011 according to IEP. Political stability greatly influences the investment
decisions of CEOs and also affects the amount of tourists. No one wants to visit an unstable
country. Viet Nam government is always trying to provide supportive policies and creating an
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equal environment for both foreign and domestic businesses. In May 2010, the government
introduced 6 major measures to support small and medium businesses regarding to loan support
and administrative procedures. (maiphuongdc, 2013)
ECONOMIC
Positive Negative
Viet Nam is developing economic integration with the
world with high growth rate of GDP, which leads to
increased demand for tourism. Viet Nam's GDP in
2018 exceeded its target.
Da Nang is the city with the third highest tourism
revenue in the country, after Ha Noi and Ho Chi Minh
Development of Infrastructure in Da Nang include
airport and spacious streets, system luxurious hotels
and luxury resorts are investing continuously
High fraud and corruption in Viet Nam in
general and Da Nang in particular are very
high.
The public debt problem and many economic
fluctuations of the government negatively
affect the economy.
In 2010, GDP per capita of Viet Nam was about 1.200 USD and the increasing rate of GDP was
6.78%. Viet Nam economic has been stable and developing these years, creating good conditions
for the development of hospitality industry. Technical system and infrastructure in Da Nang have
been developing promptly. (maiphuongdc, 2013)
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SOCIAL
Positive Negative
Vietnam is a multicultural country, and there are
thousands of festivals every year. There are many
festivals, cultural events that promote the city of Da
Nang to the world such as International firework festival.
Da Nang is famous for many beautiful and famous tourist
destinations in Da Nang. Culture and cuisine attracts
many tourists in the country and internationally.
Local people are kind and open with visitors.
The preservation of cultural heritage has
not been fully and permanently
implemented
The cultural environment inevitably leads
to social evils and the loss of national
identity
Viet Nam has 2888 beauty spots had been considered as national heritages. Da Nang with many
breathtaking sites such as My Khe Beach, Sown Tra Peninsula, Ba Na Hill, etc. and good
environment attract a large amount of tourists come to visit. Especially, Da Nang also has many
big events such as International Firework Festival, Music festival every year. (maiphuongdc,
2013)
TECHNOLOGICAL
Positive Negative
Vietnam attaches great importance to start the
application of science and technology to reach new
achievements for application to the tourism industry.
Information technology and science is increasingly
developing enabling the hotel to reach customers.
Poor investment in information technology
to apply to the promotion of enterprises is
small and poor in management and
supervision.
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Many information stalls and signs for tourists had been
installed, many screens in many places in the city.
Develop modern database on tourism
Nowadays, the explosion of information technology, especially the internet, has helped
businesses easily access and promote their image to customers. New technology creates an
opportunity for hospitality industry, especially for luxury hotel such as Novotel. (maiphuongdc,
2013)
LEGAL
Positive Negative
Da Nang is developing tourism and has long been
involved in the Madrid agreement, allowing new and
undeveloped businesses to register international brands.
Simple business registration procedures save time.
Credit policies and contract policies are rapidly
supported by state agencies.
Laws are often backward and uncoordinated.
Too many types of documents and levels of
issuance make it difficult for businesses.
Viet Nam is considered as a country with
high level of fraud.
In 2010, Viet Nam is ranked 116/178 countries in terms of transparency and considered as a
country with high fraud. It is a big challenge for hospitality industry. However, the establishment
of Viet Nam Business Law in 2005 helped launce businesses becoming easier and simpler. It
helped the business save time and cost in the first step. (maiphuongdc, 2013)
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ENVIRONMENTAL
Positive Negative
Da Nang has a natural fresh environment due to
priority policy for tourism development.
Da Nang beach is one of the six most beautiful
beaches in the world by Forbes magazine.
There is a system of rivers in the middle of the city
with poetic landscapes such as Ba Na hills and Son
Tra peninsula.
Da Nang is considered as a model urban
environment. This is also the result of investment
in resources, and the initiative to integrate
environmental indicators into the city's socio-
economic development plan.
Da Nang has faced many challenges, especially
environmental pollution in industrial parks,
restaurants, hotels.
Beaches sometimes appear jellyfish that cause
itching for visitors and sometimes sea pollution
because of the waste system that spills over the
beach.
Da Nang authority has been greatly taking advantage of favorable natural condition of the city to
attract a huge amount of visitors. However, global warming and pollution are big issues that they
have to deal with. Da Nang beach is an important landscape in attracting tourists but now it has
been facing sea pollution due to the waste local people release to the beach. (maiphuongdc,
2013)
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SWOT ANALYSIS
SWOT analysis is a framework used to evaluate a company's competitive position by identifying
its strengths, weaknesses, opportunities and threats. Specifically, SWOT analysis is a
foundational assessment model that measures what an organization can and cannot do, and its
potential opportunities and threats. (Investopedia, 2018) When using SWOT analysis, an
organization needs to be realistic about its good and bad points. The organization needs to keep
the analysis specific by avoiding gray areas and analyzing in relation to real-life contexts. SWOT
analysis should be short and simple, and should avoid complexity and over-analysis because
much of the information is subjective. Thus, companies should use it as a guide and not a
prescription.
SWOT analysis is particularly important because it can help people uncover opportunities that
they are well-placed to exploit. And by understanding the weaknesses of the business, people can
manage and eliminate threats that would otherwise catch them unawares. (Mindtools, 2018).
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STRENGTHS AND WEAKNESSES
Strengths Weaknesses
Novotel Da Nang is a famous luxury brand with
well-established reputation.
It is the first 5-stars hotel of Da Nang city and it is
the hotel acquired international standard.
It is brand name that has great guest interaction. The
core business idea of Novotel Da Nang is that guests
are continuously made to feel welcome. Some of the
features offered include profitable loyalty programs,
exclusive guest managers.
Good-looking location in directorial center of Da
Nang so it attract a lot of view from people.
Serving high-clash services and technical
innovations improve customers’ feeling.
Novotel has excessive objectives and development
policy.
Online information and booking system is
developing.
The price is considered quite high for
domestic tourists and also the fixed costs is
much higher than other hotels.
In a competition with other competitor
brands with the same level which is Muong
Thanh Hotel, Minh Toan Hotel,
Interconental Hotel, etc.
Only interest seasonal tourists (in holidays,
big events, etc.).
(Mai, 2017)
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OPPORTUNITIES AND THREATS
Opportunities To develop tourism into a spearhead spear-head service of the country, the
Government of Vietnam particularly interested in the development of
infrastructure and technical base for tourism
Expanding flight network will connect Vietnam with the neighboring countries
and Northeast Asia, is open to welcome guests from many regions unexplored
before.
The policies and law in Viet Nam for expanding the business independence
including the permission of using the investment sources or diversifying the
forms of the investment have a significant import to the growth of international
brands like The Accor Group…
The increased income will positively lead to the improvement of living
standards and consumption capacity of the local population. When basic needs
are met, people will start to take care of the entertainment needs and their
entertainment.
Threats Therefore, they tend to trust more on word of mouth from the information travel
blog or recommendations of their acquaintances.
Although the domestic tourists accounted for the majority of market share, their
travel costs low.
Most young people Vietnam can speak English basic and tour guide speak
several languages fluently. However, stay away from it, foreign tourists can
have difficulty communicating with the local people from the middle-aged and
older. At the same time, many public sites do not include the necessary
information in English, for example, information on directions, negatively
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affect the travel experience of visitors.
Because the ads are often exaggerated to attract attention and to compete with
other brands, today consumer doubts about the reliability of the information
they receive.
The market has seen a wide range of hotels to be sold whole or in part by a
decision to withdraw capital from many investors in the real estate crisis
(Do, 2013)
HOW THEY RELATE
PESTLE analysis focuses on the external environment that affects the hotel while SWOT
analysis is about both internal factors and external factors. They complement each other and also,
by looking at the environmental factors affecting a company from two different frameworks.
It is easier to determine those factors that truly have a correlation with company performance,
rather than mere coincidence. (O'Farrell, 2017). "O" in the SWOT analysis - the opportunity to
be considered a quick overview of PESTLE analysis. Examine the political factors, economic,
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social and external technology can also help companies to explore potential business
opportunities they can pursue. "T" - threats in a SWOT bring the biggest connection between
these analyzes. SWOT have a more balanced approach and allows the company to consider the
elements within it have the right to control the side effects outside that it does not have control,
but needs to be prepared. PESTLE analysis helps the hotel deeply analyze about the threats in
SWOT. (Kokemuller, 2018) Both opportunities and threats in the SWOT section come from the
external environment has been analyzed in PESTLE. PESTLE analysis is like the foundation of
any analysis of the hotel include a SWOT.
KEY FINDINGS FROM PESTLE AND SWOT ANALYSIS
PESTLE: The economy of Viet Nam is developing quickly. Vietnam also has a good foundation
(social culture, destinations, attractions and people) to tourism. Information technology and
science in Da Nang rising hotel helps reach customers.
SWOT: Novotel is well alleged and international standards, they serve the best service and
practical developments to improve the client experience. The government create as much as
possible the best conditions for the international hotels established in Da Nang as supporting
policies and strategies to make the hotel become economic factors important cities to make
relations with neighboring countries.
HOW THEY INFLUENCE DECISION-MAKING PROCESS
To help make choices and to plan for future events, organizations need to know the wider macro
environment in which they function. A PESTLE analysis is a valuable tool for accepting the
big picture of the environment. (Jaimal, 2018). All the main findings can help managers control
the overall situation of the hotel. Besides, the general manager can see the big image of the
future of the hotel through two assessment analysis to make the development plan. PESTLE
analysis using the above issues to monitor strategic decision making.
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The managers deliberate all the factors inside and outside have been analyzed to make decisions
best suited in all parts such as policy development, policy management and selection
recruitment. They must see what has happened in the past and will happen in the next 3-5 years
inside the hotel and in the external environment to make strategic and suitable policies and
suitable to maintain reputation and develop the hotel.
The hurried development of the economy and the support from the government to give investors’
self-assurance in the growth of the hotel. Trust from investors makes managers have inspiration
and efficiency. It inspires managers to take risks because there is less risk in a positive growth
and it can be organized by a competent manager. Next, the rapid development of information
technology in Da Nang combined with well-established reputation of the hotel is a great
opportunity for Novotel. People now can find hotel information via the internet. Advertise on
popular internet and easy access to visitors. History and reputation of the Novotel is also a
striking impact that visitors trust the products and services of the hotel. But also has a negative
aspect about the lack of staff in comparison with the development of the property.
CONCLUSION
Based on the results reported above, the Accor Hotels group can see the PESTLE analysis to see
the advantages and disadvantages of each factor. Just as the SWOT analysis highlights strengths
and weaknesses for Accor to consider. There are also opportunities and threats that have been
assessed. In addition, the report assesses how they are linked to each other and key findings, and
then outlines how they affect the decision making process.
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