Report on Novotel Hotel
It provides Four-star services to its clients in the major cities of different countries around the world. Novotel hotel can typically be placed in between two brands of Accor hotels, that is, Grand Mercure and the Pullman depending on the number of countries serving, the number of hotels operating and the type of services rendered. Mercure hotel, however, provides three-star services while Pullman offers Five-star services to the customers. Altogether, Accor hotels group brand name represents a French multinational group of hotels operating in different countries around the world and headquartered in Paris, France. Current Performance Size: Novotel hotel now operates over 400 hotels and resorts in 60 countries around the world. The current CIO is called Gilles de Richemond who is a French aerospace engineer.
He took office after Laurent Idrac who served for a couple of years before he left the group (Arifianti, 2018, p. Finance: Novotel has grown financially by applying a simple and innovative method of raising funds. The firm also has been taking grants and loans. The best revenue growth was however witnessed in the first quarter of 2016. The policy also would rely on an established distribution chain. Particular operational expertise however of the firm is needed in every market segment to support the growth of Novotel. A development strategy aiming to consolidate Novotel's leadership would be required to uplift the midscale Novotel hotels located in different parts of the world. Analysis of Business Environment A. PESTLE Analysis Political Factor Political factors that usually affect a particular industry may include government policies including trade tariffs.
Socio-Cultural factor These are factors that scrutinize the social environment in a particular industry, and gauges factors affecting their productivity, for example, cultural modes, population systems and others. For instance the buying patterns for foreign nations like the United States where there exists a high demand of hospitality services during Holiday seasons. The present state of Novotel is perfect in customer service since they use different languages via the online platforms adding value to the booking experience (Chong, 2017, p. Novotel's strategy and belief provide for population changes, for instance, the aging population and the high number of female workers since the company believes in men and women. Novotel focuses on the employees and makes an effort to train them in place of social and cultural advancement.
Novotel, however, works in regions characterized by suitable climatic conditions. This made it easy for the company to attract many customers from the other areas where the climate was not favorable. It provided a friendly environment where they kept wild animals to entertain their clients. These attracted many of the customers which led to the growth of the hotel. Cultural Web Analysis This includes scrutiny of organizational culture impacting its growth and turnover. 0% Other businesses 977 863 -16. 0% Total 5,490 5,948 +8. 1% Based on PEST analysis, Novotel Hotel under the globalized environment is the chief cordiality group in Europe and across the world. It is therefore greatly influenced by political and the legislative factors in the countries. For instance, the Novotel Hotel brand in French does not experience any big threat due to their reduced level of terrorism in the country in addition to its significant relationship with the EEC country and others.
Financial Analysis For The Year Ended 2015 And 2016 Novotel Assets ASSETS in Million Euros Year Ended December 2015 Year Ended December 2016 Goodwill Intangible Assets Property, Plant and Equipment Long-term loan Investments Financial Investment Total Non-Current Financial Assets Deferred Taxes Non-current assets Total Non-Current Assets 697 307 3,024 118 346 191 654 73 - 4,756 1,496 2,401 562 77 596 171 844 233 9 5,545 Inventory Trade Receivables Accruals and other receivables Short-term loans Cash equivalents Receivables on disposable assets 37 432 471 43 2,963 44 8 374 252 19 1,184 24 Total Current Assets Assets held for sale TOTAL ASSETS 3,990 208 8,953 11,861 4,457 11,864 The total assets of Novotel Hotel increased tremendously from 8, 953 in 2015 to 11,864 in 2016 (AccorHotels, 2016, p. Values Novotel enumerated its core values which were centered on customer satisfaction. The mission was to provide the best services to all types of customers around the world. It aimed to offer diverse services in favor of every individual. For customers requiring pampering activities, the hotel would be committed to facilitating that (Arifianti, 2018, p.
Novotel's assumptions like any other are difficult to identify and explain since they represent a collective experience without which the organization would not invade the world. Often known as the Novotel paradigm, the assumption of no competitive pressures helped the Novotel hotel prevail the niche though this made it not much careful in dealing with the customers and later the environment became very competitive (Arifianti, 2018, p. The assumption of no distance costs though good in the motivation of the organization, it proved no confidence since Novotel incurred a lot of expenses in traveling, telecommunication costs the reliability on the international network. B. Porters Five Forces The threat of new entrants Entry of other hotels into the market affected the profitability of Novotel.
Novotel strategy of locating their hotels in the major cities countered the risk of customer's high bargaining power. The buyer concentration to firm ratio was very high in major cities hence reducing their bargaining power. Many of Novotel hotels and resorts were situated near airports where the buyer switching costs for a customer would be very high if intended. The strategy was aimed at minimizing the bargaining power of the customers. Industry rivalry For the hospitality industry, the level of competitive rivalry is the vital determinant of the competitiveness of the sector. Alternatives in hospitality industry may include different types of the hotel giving various services, or it may be a different industry, e. g. , touring game reserves instead of getting to relax in the hotels.
Novotel, however, enjoys a privilege of no close substitute since it is the only hotel offering some of the unique services. Its operations are either centralized hence no ease of alternatives getting in the market. For instance, according to Pénard et al. (2017, p. 166) the three assumptions that underlie the five forces make the analysis unreliable. The assumption that buyers, competitors, and suppliers are not related and that they do not interact nor collude leaves a dark spot where one cannot understand how therefore the demand of specific products affects the competition or the rivalry. An assumption that the source of value is a structural advantage contradicts the fact that the cause of value in the products depends on the strategies laid down by the organization.
In this case, Novotel will face a product development, marketing advancement, better accounting, and staff management. • Improve on teamwork and develop the staff in preparation for high performance. Novotel staffs should be organized into one group such that they work together to achieve the firm's standard goal. Training of personnel will also enhance better performance in which the organization will enjoy higher profits and turn-over. • Deliver an outstanding reputation and experience for all customers. Resistance to change within an organization often hinders the result that the organization intends to achieve. Strategic analysis of the external environment surrounding the Novotel Hotel greatly helps the Hotel in fostering success and gaining a competitive advantage over the other firms in the market. It is also often significant for an organization to establish how beneficial strategic analysis can be enacted is important to both the organization and the clients at large.
The Novotel Hotel management authority, therefore, ought to possess some specific attitudes and skills for the envisioning and anticipating the success of the company. I, therefore, recommend that the Novotel Hotel and any other business enterprise covering either a smaller or bigger geographical locations should always consider analyzing the external surrounding its operation and establishing the necessary precautions to take. 9% as described in the finance books of 2016 during the first quarter. Upon implementation of these strategies, Novotel will be one of the best global leaders in recent future. The turn-over rate shows how customers have great trust placed on the firm’s products satisfaction being the key determinant. The management of Novotel should develop a strategy to accommodate the growing customer needs and expectations.
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