Strategic Plan Analysis and Implementation for Accor Hotels

This report presents a comprehensive strategic plan analysis for Accor Hotels, a leading global hospitality company. It begins with an introduction to Accor Hotels, its acquisition of Mantra Group, and their respective vision, mission, and core values. The report then delves into a detailed situational analysis, examining general environmental trends, industry dynamics using Porter's Five Forces, and competitor analysis, including Intercontinental Hotels Group and Best Western. An internal analysis of Accor Hotels' resources, capabilities, strengths, and weaknesses, along with a comparative analysis with Best Western, is also provided. A SWOT analysis summarizes the company's internal and external factors. The report culminates in strategic formulation, implementation issues, and an action plan, offering insights into how Accor Hotels can gain a competitive advantage in the evolving tourism and hospitality industry. The report highlights the importance of understanding technological, demographic, economic, political/legal, sociocultural, global, and physical trends affecting the industry.

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STRATEGIC PLAN
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Table of Contents

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STRATEGIC PLAN....................................................................................................................................1
Name:..........................................................................................................................................................1
Table of Contents........................................................................................................................................2
1.0 Introduction...........................................................................................................................................3
1.1 About Accor Hotels...........................................................................................................................3
1.2 Mantra Group’s Vision, Mission and Core Values............................................................................4
1.2.1 Vision.........................................................................................................................................4
1.2.2 Mission.......................................................................................................................................4
1.2.3 Core Values................................................................................................................................4
2.0 Situational Analysis...............................................................................................................................4
2.1 General Environmental Analysis.......................................................................................................4
2.2 Industry Analysis...............................................................................................................................7
2.2.1 Ease of entry...............................................................................................................................7
2.2.2 Power of suppliers......................................................................................................................8
2.2.3 Power of Buyers.........................................................................................................................8
2.2.4 Availability of Substitutes...........................................................................................................8
2.2.5 Competitors................................................................................................................................8
2.3 Competitor Analysis..........................................................................................................................9
2.3.1 Intercontinental Hotels Group.....................................................................................................9
2.3.2 Best Western Hotel...................................................................................................................11
2.4 Accor Hotels Internal analysis.........................................................................................................12
2.4.1 Resources, capabilities and strengths........................................................................................12
2.4.2 Weaknesses...............................................................................................................................12
2.5 Comparison between Accor Hotels and Best Western Hotels..........................................................13
3.0 Company’s SWOT Analysis................................................................................................................14
4.0 Strategic Formulation..........................................................................................................................17
5.0 Implementation of the strategic Alternatives.......................................................................................18
5.1 Implementation Issues.....................................................................................................................18
5.2 Action Plan......................................................................................................................................19
6.0 Conclusion...........................................................................................................................................21
7.0 References...........................................................................................................................................22

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1.0 Introduction
The tourism and hospitality industry is growing tremendously due to global changes in
the business environment (Walker and Walker 2016, pp. 39). The sector is attracting more key
players who are joining the growing industry and serve the rising number of clients. As the
industry grows, the competition is also becoming stiffer due to the rise in number of businesses
offering the same services within the sector (Vanhove 2017, pp. 73). Hence, a company within
the sector needs to analyze the environment and come up with strategies that will help them gain
a competitive advantage (Stead and Stead 2014, pp. 107).
Therefore, the main objective of this report is to explore the strategic management plan
by Accor Hotels to help the company initiate and implement a strategic plan that will give them a
competitive edge in the market. Moreover, the report will analyze the whole global tourism and
hospitality industry and be able to see what Accor Hotels can do differently in order to counter
the competitive nature of the market flooded with companies offering same tourism and
hospitality services (Rothaermel 2015, pp. 95).
1.1 About Accor Hotels
Accor is arguably the world’s top leading tourism and hospitality company operating a
substantial number of hotels globally. It operates 470,000 rooms in more than 3,600 hotels in 92
countries across the globe. The company offers an all-inclusive collection of luxurious options
for its clients worldwide. Accor Group of Hotels employs more than 170,000 employees to work
for its member hotels located in various parts of the world. Thus, Accor Hotels builds its power
and influence on the experience, reputation and proficiency the company has been able to create
having been serving its customers and partners for the past 45 years (Accor Hotels 2018).

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Recently, the company acquired Mantra Group in the process of expanding their market share in
the hospitality industry.
1.2 Mantra Group’s Vision, Mission and Core Values
1.2.1 Vision
To be world’s most innovative, best performing and most valued Hotel Company.
1.2.2 Mission
To streamline and manage the existing asset portfolio through disposals and acquisitions
1.2.3 Core Values
Respect: We’re striving to pay attention on people in the outside world by allowing the blending
of cultures. We find pride in our differences and we view every human being a value addition to
us.
Trust: Our aim is to value and support everybody through trust.
Innovation: We encourage everybody to be innovative in order to offer consumers a different
experience in our services.
Inclusivity and diversity: While operating in many countries, we allow inclusivity and diversity
of our people.

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2.0 Situational Analysis
2.1 General Environmental Analysis
The global tourism and hospitality industry is evolving due to changes in the business
environment (Gustavo 2013, pp. 13). The changing trends in the hospitality sector can only be
understood through the analysis of some developments as discussed below:
Technological trends: As a result of global technological advancement and use of
technology in carrying out daily business operations, there has been increased demand in the use
of technology aided systems by most companies within the hospitality industry. For instance,
many companies are relying on technology to run their operations like online booking of rooms
and other services. Therefore, technology has highly impacted on the tourism and hospitality
industry in the world since most companies within the sector are relying on the technology aided
systems to run and maintain their daily activities.
Demographic trends: Demographics deals with people. With the rapid population growth
in the world, there is also overall changes in the people’s population size, density, age and
culture. Most of the population is aging and thus the companies within the hospitality industry
should strive to ensure that they understand the needs of the dynamic population. That is, the
company should understand how to handle the ageing tourists as well as young tourists because
their needs are differing.
Economic trends: The global economic conditions of a country determines the purchasing
power of consumers. Accor Hotels operates in countries more than 92 countries in the world.
Most of these countries are enjoying highly growing economies meaning that their people have
high spending patterns which makes the tourism and hospitality sector a lucrative industry to
invest in (Dixon, Scura, Carpenter and Sherman 2013, pp. 115).

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Political/legal trends: Some of the legal regulations put across by various governments to
help in regulation of the way companies operates within their jurisdictions. Thus, a company like
Accor Hotels has been highly affected by such regulations that regulate the business within the
countries that they have their hotels. For the example, in most countries, there are laws that
control the foreign investment policy that should be considered before investing in such
countries. Moreover, in some countries there is a fair policy that controls the nature of
competition for companies operating within those countries. That offers equal opportunities to
grow making the competition to become stiffer within the sector.
Sociocultural trends: The socio-cultural factors basically affect the values, preferences
and behavior of people. Thus, it is important for the company which is attracting tourists from
various cultural backgrounds to understand their values and beliefs. Thus, the cultural aspect of
the clients should be taken care of before developing a plan so as to cater for the diverse culture
of clients within the sector.
Global trends: Due to globalization, there are several trends affecting global changes and
thus impacting directly on the hospitality sector. Some of these global changes include human
resource management, use of technology in the company’s operations as well international
market. That offers a company an opportunity to operate in more than one country and use
technology to reach more clients across the globe. The global trends have also forced companies
to invest more on marketing so that they can make their services known.
Physical trends: Physical environment is important to any company within the hospitality
industry not only in Australia but also across the world. The physical trends include the
environmental factors that affect the operations of a company like Accor hotels since tourists will
be compelled to visit a country with a conducive and favorable physical environment. Thus, with

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a good and conducive weather conditions, tourists are moved to visit a country and spend their
time there.
Therefore, it is crucial to understand that the hospitality industry is evolving and there are
a number of environmental trends that makes the business environment complex (Boella and
Goss-Turner 2013, pp. 107). Hence, these trends come with opportunities and others come with
threats to an organization. However, some segments such as technological, economic and
physical trends tend to highly influence the industry (Cook, Hsu and Marqua 2014, pp. 60).
Therefore, it is important for a company to understand all these before planning in order to make
long term plans that cater for that.
2.2 Industry Analysis
The tourism and hospitality industry is becoming growing tremendously and it is
becoming a lucrative area of investment for new key players entering the sector as well as the old
companies trying to grow and diversify their activities (Mensah and Dei Mensah 2013, pp. 130).
In order to recognize the real and broader picture of the sector and the reason as to why it has
become very attractive, it is important to do the industry analysis using the Porter’s five forces
model. By understanding the nature of the market, a company can understand where to make
strategic changes that can make the biggest difference (Lasserre 2017, pp. 130). Through
industry analysis, a company can also be able to understand where there is opportunities and
threats for that they can utilize them well to maximize their profits. Porter’s five forces models
are analyzed below:
2.2.1 Ease of entry
The hospitality and tourism industry is growing at higher rate attracting new key players.
However, the industry seem to be hard for new key players due to a lot of major barriers to

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market entry. The industry has been dominated by big companies like Intercontinental Hotels
Group and Accor Hotels. These companies have a heavy customer base and economies of scale
thus making them dominate the market making it hard for new companies to enter the market
(Tanwar 2013, pp. 14).
2.2.2 Power of suppliers
Topping the list of major suppliers in the tourism sector is the airlines that tourists use to
fly in and out of the country. There are a number of airlines connecting the various countries and
tourist destinations in the world. That means that tourists find it easy to travel to and from
various attractive tourism destinations in the world. Thus, the industry is very attractive since
some of the suppliers (airlines) serving the industry are many.
2.2.3 Power of Buyers
When there are many dominant companies in the industry, the power of buyers goes up
since there are substitute companies offering the tourism and hospitality services globally..
Hence, any company willing to join the sector must offer their services at a lower price. Hence, a
company like Accor Hotels must strive to offer value by reducing the cost for their services thus
attracting more clients.
2.2.4 Availability of Substitutes
Tourists travelling in a new country must do some research on which company or hotel
they will spend their time while visiting a certain country. They value their security and other
services. Hence, a tourist will settle on big and well established companies like Accor hotel and
other bigger companies despite the existence of other small tourism firms.

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2.2.5 Competitors
There are a number of competing companies like Intercontinental Hotels Group and
Mantra Group that offer the same services as Accor Hotel. Hence, the company must strive to
offer differentiated services to tourists in order to attract them more and gain a competitive
advantage (Porter and Heppelmann 2014, pp. 75). However, there is fair competition policy law
in many countries that reduces the chances of unhealthy competition thus making the industry
very attractive for a company like Accor Hotels.
2.3 Competitor Analysis
2.3.1 Intercontinental Hotels Group
IHG has become one of the best companies offering distinct and efficient services within
the tourism and hospitality industry. The company employs more than 375, 000 people and
operating across 100 countries to offer true hospitality services to a wide range of clients.
2.3.1.1 Strategies
We are dedicated at opening new techniques to implement our unique, conventional and
effective strategic plan at a quicker rate with an aim of ensuring an accelerated growth ahead of
our competitors. We have a well-defined model that focuses on our core style of operations in all
our member hotels. This strategic model is core to our obligation of ensuring high quality and
long term service delivery to our clients for the purpose of attaining a sustainable growth in our
profits and income.
Based on the company’s strategic model, the main focus of all our employees and
associates is to create value for the company through building ideal and strong brands preferred

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by all the potential clients, developing the economy of scale and revenue generation through cost
reduction and use of direct channels. We pay much attention to a certain targeted group by
combining the element of responsible business practice and a disciplined implementation of our
strategy in order to achieve a reasonable shareholder returns.
2.3.1.2 Objectives
 Create & influence scale
 Improve our loyalty agenda
 Boost our revenue generation.
 Grow owner plan
 Enhance our favorite selection of brands for visitors and owners.
2.3.1.3 Capabilities and strengths
 In a progressively competitive business environment, IHG is strategically positioned to
hasten the company’s core growth of our core business, as well as maximizing the firm’s
returns by establishing new income generating avenues such as the rolling out of new
brands across the designated countries.
 They operate globally with a number of branches in more than 100 countries worldwide
to enabling them to increase their revenues.
 A diverse range of employees with various ideas and skills to help the company grow.
 With more than 13 languages integrated in their website, Intercontinental hotel group has
its site ranked as the no.1 website for investors and guests.

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2.3.1.4 Weaknesses
 Lack of services differentiation from other competing groups of hotels.
 Slowed growth due to its large and complicated structure.
2.3.2 Best Western Hotel
The hotel is one of the best hotels offering hospitality services in the world. The hotel has its
headquarters at Phoenix AZ and it operates more than 4000 hotels worldwide.
The main strategy of the company is to reach more clients using social media.
2.3.2.1 Objectives
The company’s objectives include:
 To continue growing around the world by establishing more hotels.
 To become a unique and distinctive brand.
 To engage in satisfying the needs of their guests
 Continuous innovation.
 To remain the best by winning more awards in the hospitality industry.
2.3.2.2 Strengths
 The company has more than 4100 member hotels in more than 80 countries worldwide.
 Best Western is among the biggest hotel chain worldwide.

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 Each of the company’s member hotel maintains its unique identity while striving to keep
up with the global service offering levels and their contribution to the whole structure of
the company.
 Member hotels are found within the most attractive areas in the world.
2.3.2.3 Weaknesses
 Lack of differentiation
 Best Western has failed to control the operations of its member hotels thus making
management and accountability a very difficult process.
 There is a lot of competition from international hotel chains thus limiting the company’s
chances of growing their market share.
2.4 Accor Hotels Internal analysis
The firm’s capability has been based on its resources, capabilities as well as weaknesses.
This is based on the value chain analysis.
2.4.1 Resources, capabilities and strengths.
 The company has more than 170,000 employees with various experience and expertise to
help the company carry out its activities effectively.
 The company also enough funds to run its activities due to its investment in a number of
countries across the world
 The company has a well-established brand and reputation having been in the industry for
more than 45 years.