Essay About World’S Largest French Hotel Company And Asset-Light Approach

Accor – French Hotel Company
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Accor is the world’s largest French hotel company with its presence in 92 countries, over 3600 hotels and 470,000 rooms. Accor has been through different CEO’s and currently the position is served by Sebastien Bazin, who was the head of Accor’s largest shareholder in Europe. The hotel industry is encountering increased levels of consolidation that are not only leading to more competition but also the embracing of new business models because companies are working to find ways separating themselves from their competitors. While, many of the giants in the space such as Marriott and Hilton have made the asset-light approach as their cornerstone business strategy, Accor is among the ones which are trying to employ a different strategy. The company owns more hotels than most of its competition (around 38% of its entire portfolio). They have called their business strategy as “asset-right”, instead of “asset-light”. The advantage of this rather “bricks-and-mortar” approach is the absolute control that Accor has over thousands of its properties that can appreciate greatly over years. Nonetheless, the stock market and investors are not a big believer in the capital is being tied up this way. In order for us to evaluate the company’s future growth and its competitive advantage sustainability, I have conducted a SWOT analysis as below:Present in 92 countries, 3700 hotels, 470,000 roomsTop hotel operator and employer worldwideYears of expertise in the hospitality industryIncreasing bottom lineThe asset-light operating systems focusing on franchisees and management contracts has increased their profitability marginsFocusing on online salesOther players in the market are using their forecastsSince Accor hotels caters to all segments, customers find it hard to relate to Accor as a brandHospitality Management education is more popular globally, Accor can take advantage of its global presence and provide the students a unique experience that can turn out to be a positive experience for guests.Sustainable and inclusive growthHighly competitive market showing a constant threat; demand for innovation is always highThe global economic condition can hurt revenue in the luxury and upscale sectorsValue: The value created by Accor differs from its competition in the sense that they are contributing to the customer’s needs and providing them with not only basic/standardized services but also the personal and luxury touch. The organization can reach its potential in satisfying the customer needs by training their staff members with multiple skillsets that can allow them to be flexible at work. Moreover, staff members are exposed to the international and multicultural learning environment that allows them to be more competent in their daily jobs, hence knowing exactly how to satisfy each guest and their specific/cultural need. Accor not only creates value for its customers but also staff members; the capability of HR management helps contribute to the operation activities of each property. Consequently, the firm can differentiate themselves from others because they are taking the effort and the opportunity for their staff to learn more and be open minded. Moreover, the value of their physical assets, real estate and resources that Accor possess would make a difference if the real estate market is doing well; hence, there is a great potential for appreciation and capital gain for the company. – Rarity: Accor has created a strong customer image. The company provides excellent services regardless of where guests stay or what segment they are in. This is important when it comes to loyalty and customer’s trust in the brand of the company. The ability of staff members being flexible and competent at their jobs and their multicultural awareness has allowed the hotels to serve and achieve customer’s satisfaction. The company has established some learning tools such as Novotel’s 95 Bolts that monitors its SOP’s. Such system is solely owned by the company and not widely used; hence its rarity is justified. Furthermore, Accor’s unique business strategy of going “asset-right”, instead of “asset-light” and playing two roles simultaneously as the owner and the operator is also rare amongst its competition. This competitive advantage has been explained in the Value section above; the real estate is doing very well in general around the world, it will not be a surprise that Accor’s properties will be more valuable in the current market or the near future. – Imitation: Accor’s ambassadors are difficult to imitate and duplicate. Other hotel companies would perhaps be able to imitate and have similar operation system or physical assets and amenities but what would really differentiate Accor from the rest is its employees and their knowledge and skills that been gained through experiences. – Organization: The last question to consider is if Accor is fully organized to make the most out of their competitive advantages. Accor has been training its staff members, hence the main driving force on their daily operation activities. Other companies do not have the same human capital or layouts to their advantages. Overall, this VRIO shows some great capabilities as these advantages would not be likely to diminish in upcoming years. These competitive advantages are not short term and Accor would be able to have some sustainable growth.