DRAFT INDIVIDUAL assignment M4 Essay


In the hospitality company, Accor becomes a genuine champion. Decommissioned out of its business, Accor aims to increase the execution of its approach and deliver its development. An extensive product profile tailored to the requirements, distinctive expertise as the world’s largest hotel operator, a leadership position on four continents and a sound business model that endured the economic catastrophe. To maintain the requirements of a bigger business portion, Accor should reinforce research and development with a focus on growth.

Following some visible advancements, according to studies

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During the strategic planning phase, companies should concentrate carefully on the five forces of porter and continue monitoring throughout execution. These five forces are rivals of the industry, fresh entrants, buyers, replacements and suppliers (Pearce & Robinson, 2004).

Accor is a large corporate French hospitality company which owns, operates and franchises hotels, resorts and holiday properties using the Accor Hotels brand. It is an essential part of the CAC 40 index in Paris Bourse and is the sixth largest hotel organization in the world is a French multinational hospitality company that owns, manages and franchises hotels, resorts and holiday properties, using the brand name Accor Hotels.

It is an integral component of the Paris Bourse CAC 40 index an is the world’s sixth largest hotel group

Accor Hotels has a broad portfolio of 26 brands covering various hotel market segments. It involves Raffles, Fairmont, Sofitel, Novotel and Pullman luxury brands. Ibis and Formule 1 are its main subsidiaries in the budget range, while Swiss?tel, Mercure and Adagio are part of its mid-range offer.

With the motto “Open new frontiers in hospitality,” Accor launched its fresh brand positioning and later the fresh motto “Feel Welcome” was introduced by Accor Hotel

The Hotel Formule 1 brand has started to rebrand Accor Hotels Ibis Styles and Ibis Budget brands since August 2012.

Accor’s organic growth strategy is to accelerate hotel development through value innovation. The growth of the Accor network continues at a rapid pace, with the opening of last year’s record 52,000 spaces. They operate to improve their opportunities in markets where they already lead, but they also concentrate on emerging countries, particularly in the Middle East, South East Asia and Sub-Saharan Africa.

An approach is an organization’s long-term vision and purpose, which supports the organization by calibrating resources in an evolving setting to the complete (Lynnette & Peet, 2013, P10)

A diagram below reflects a growth strategy and response collaboration main objectives

The schematic reflects different variables in a strategy to fulfill the choice. Accor’s strategy for FORMULE 1 aims to match resources, innovation and abilities with economic options by picking the best solution (Lynnette & Peet, 2013, P334, 335


What makes


Accor’s Motivation is to become or stay the champion in service, industry and medium-scale hotels on all continents and the top vote-getter in the upmarket segment. Accor 2009 corporate brochure


Value Innovation is a method in which a business presents fresh techniques or upgrades aimed at achieving both competition in the market and low cost. The modifications introduced through value innovation generate fresh or enhanced product or service mechanisms but also result in cost savings by eliminating or decreasing unnecessary aspects during the entire life cycle of the product.


Most businesses are focused on matching their competitors and beating them. Consequently, they tend to have comparable dimensions in their strategies. What follows is direct competition, relying primarily on gradual fees, value or sometimes both. Innovative businesses like Accor Group break the chains of the pack by staking out essentially fresh market space, by developing products or services for which direct rivals do not exist. Such a route to innovation needs a distinct winning attitude and a continuous search for possibilities. Rather of them looking inside standard sector rivalry limits, executives looked methodically across those limits to discover an unoccupied territory that constitutes real value innovation. Accor discarded standard ideas of what a budget hotel was supposed to be and provided what most valuable clients really wanted decent low-cost sleep.

By introducing FORMULE 1, Accor has developed essentially fresh and superior value curves. This was accomplished along with a mixture of eradicating characteristics, generating characteristics and decreasing and increasing characteristics in their sectors to obscene levels.

What usually occurs once a fresh value curve is developed by a business, the rivalry attempts to mimic it sooner or later. Over many years, value innovators have not faced a consistent threat, but competitors show up faster in others. However, eventually, a value innovator will be under attack to discover its development and revenues.

The organization may make the mistake of standard strategic logic, consumed with sticking on to market share. When the organization does not discover a way outside the pit, its value curve’s basic outline will look just like its competitors.

Unless the value curve of a company is essentially distinct from the value curve of most of the sector and most clients appreciate the alternative leaders must withstand innovation.

Alternatively, to attaining maximum efficiencies and market penetration, organizations must focus on demographic development and operational developments. The organizations researched that were most effective in recurring value innovation would be those who took control of all three areas where value innovation might take place, and these are service, product and supply.


A marketing plan needs to provide a regulate element comparative real output with the results scheduled. Formula 1 provides significant cost benefits for Accor. The business cut the average price of building and design of rooms, half and the price of its employees fell between 20% and 23% compared to the industry average. Accor’s value innovation has indeed been compensated by customers.


Running a Company for high growth, the logic of value innovation can be used by executives of diverse organizations to distinguish the most lucrative development potential across a range of companies. The business has a low growth path and needs to push for value innovation when both the present profile and the anticipated offers consist primarily of pioneers. Accor through the creation of Formale 1 has confirmed this element.


Accor offerings include concrete answers to altering the way of life while enhancing this comfort, well-being wand inspiration of workers. The objective would be the same every time, listen to the concerns of people and provide the optimal solution for every circumstance, in established and developing economies. Such a goal needs a continuously revived innovation ability as well as in-depth market understanding. Accor2009 Corporate brochure

Below are some benefits of value innovators strategy in comparison to the conventional strategy:

The following table demonstrates the five dimensions of the approach according to the logic of conventional and value innovation:

Kim and Mauborgne (2000)


Below are the features of the Value Innovation in comparison to conventional strategies

Value Innovation does not take the circumstances of their sectors as given and set strategies accordingly.

Value innovation is looking for value savings and breakthrough thoughts

Value innovation is not competing, they can differentiate factors that yield greater value from all the variables on which the sector is competing.

Value innovation is freeing up its resources to recognize and produce entirely fresh value sources

Value innovation employs a distinct philosophy, rather than concentrating on customer differences, value innovators build on the strong correlations in the characteristics that value clients.

Value innovation often cross limits defined by the traditional products and services offered by the sector

Instead of fighting rivals over specific market segments, the Accor group rendered it irrelevant to the rivalry.

Accor developed a new notion for a hotel that led to Formule 1 launch. First, the company excluded bells and whistles of hotels such as expensive restaurants and attractive lounges. Accor estimated that while it may lose some customers, most people will do without those elements

Below is a plan exemplifying how Kinepolis attains lucrative growth in the same way that Occor Group practices:


Four major kinds of conventional development strategies are commonly used:

Horizontal integration strategy

Vertical integration strategy

Diversification strategy

Market penetration strategy


When a firm’s long terms strategy is based on growth through the acquisition of one or more similar firms operations at the same stage of the production in marketing chains its grand strategy is called horizontal integration. Strategic Management, Ninth Edition, McGraw Hill

It may basically acquire, but it also may merge with or take over, another organization to reinforce it’s own. Growing in magnitude or capacity, attaining efficiencies or brand individuality, reducing competition and threats, expanding markets, or acquiring fresh markets.


Vertical integration is a competitive strategy through which an organisation takes full control of one or more phases of product manufacturing or distribution

A business chooses for vertical integration to guarantee absolute control of the commodity supply for the development of its products. It can also use vertical integration to take over the distribution reins of its goods.

The diagram below illustrates how horizontal and vertical strategies work.

McGraw Hill, Marketing strategy, Ninth Edition


By growing into markets or products linked to its current business, a company may decide to diversify or broaden its operations.

Diversification is a type of strategy for growth. Growth strategies generally require a substantial rise in sales or profitability performance goals beyond past performance scales.


Compared to the complete theoretical market for that product or service, market penetration is a measure of the number of sales or acceptance of a product or service.

Furthermore, market penetration may also include operations used to boost a specific product or service’s market share

These are their characteristics, as opposed to value innovation, having listed all standard approaches above.

A belief that it is necessary to build the ability to compete and combat

By extra optimization and personalization, existing customers must be maintained and expanded.

Conventional Strategy focus on the specified conditions of the industry

Existing facilities and competencies should be utilized as much as possible

The services and products offered are defined by the constraints of the standard industry. The objective is to maximize the benefits of these services and products

The following evaluations were produced to determine the approach that Accor could have used:



The primary distinction between a SWOT analysis and a PEST analysis is that while SWOT identifies at a stage in time the general sustainability of a business proposal or concept, a PEST analysis assesses the market that a company intends to join.


Accor Hotels SWOT assessment analyzes the brand with its strengths, weaknesses, possibilities and threats. Accor Hotels is one of the hospitality industry’s leading brands.

Based on the analysis carried out for this Accor swot analysis, it is also evident that Accor is the largest player in the hospitality industry and this is not likely to be challenged as quickly as possible.


Intrinsic reputation, culture and excellent customer service They lose their marks, not strategic business

Sustainable possibilities for movement of money Anticipate a challenge if hotel demand drops

Vaguely recall the strong brand Sustain all brands globally

The globe’s highly respected hotel brand Losing to online businesses

Financial means by allowing clients to obtain information and complete reservations via web channels Great concept of retention and loyalty Worldwide footprint Brand appearance Sustainable leadership Exceptional human resources OPPORTUNITIES THREATS

The opportunity to spread operations to other regions It is surrounded by companies rendering the same services – competition

Productivity that is viable and diverse Fiercely competitive economies present a steady danger and increase demand for innovation when it comes to offer

They can arrange customer packages In the luxury and upscale sections, the worldwide financial situation can hamper sales


Political factors:

A democratized climate Accor is the world’s biggest group of hospitals. They have been extremely affected globally by the political and legislative circumstances. Because of their decrease in terror rate and also an excellent relationship with the EEC nation (European Economic Community) and others, they faced no major threats. They still do their company with the whole globe through the company stream.

Economical factors

By acquiring the FRHI Group and its three iconic brands, Raffles, Fairmont and Swiss?tel, Accor Hotels took part in the industry consolidation phase in July 2016. Accor is anxious with economic factors for the reason that they are shaken by need, prices and returns. Acquisition, merger and demerger are one of the most influential variables in the economy.

Socio-Cultural factor

Present political environment suggests that Accor offers exceptional customer service by using 7 languages through digital and visuals and maps, offering value to reservation experience owing to a variety of social modifications. Demographic shifts like the increasing population and a boost in the female employee as the business think that both genders are at the heart of the strategy. The organization is concentrating on its employer and providing even more initiatives to develop and progress socially.

Technological factors

Technological advances are the main qualitative-environmental variables that have affected both consumer and business advantages. Customer satisfaction is increasing because the world goes so quickly, products are easily accessible and services are more personalized. Accor deploys the following technology (1) Online sites and Reservation, (2) Reserving Up-to-date software systems (3) Increasingly demanding are electronic media cards.


Value Innovation premise seems to be much smarter for organizations that want the greater industry share and bigger segments of customers. High development organizations have implemented the notion of Value Innovation and have embraced policies in line with business circumstances and climate. To effectively implement such a principle, executives must believe beyond the conventional limits of their industry to meet the requirements of customers.

The competition-based strategy generates an exchange-off between value and price where value innovation splits off this exchange and at a reduced price offers the highest value

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