ACCOR FRENCH HOUSING AND RESTAURANT COMPANY Harvard Case Solution & Analysis

ACCOR FRENCH HOUSING AND RESTAURANT COMPANY Case Solution

WHERE THE MOTEL 6 WOULD FIT IN THE ORGANIZATIONAL STRUCTURE OF ACCOR?

The acquisition of Motel 6 in the United States was a big achievement for Accor Company and it drove significant profits right after its acquisition at $2.3 billion. After this, the question arose that will it continue to generate significant profits for Accor and add value to the Accor Company? Individually, the best fit would be if Motel 6 integrates with the existing business of Accor, which is French housing and restaurants. The top management at Accor and the Company’s founders Mr. Paul Dubrule and Gerard Pelisson, should analyze the position of their new business Motel 6 and should look for ways in which Motel 6 can be integrated with the current business. Otherwise, if it seems that the integration of Motel 6 would deteriorate their overall revenues, then they should not integrate motel 6 with the Accor chain of business.  This is a great achievement and suggests that Motel 6 should be integrated with the existing business.

Furthermore, Accor can drive more benefits if top management find possible ways to extract synergies with the combination Motel 6 in America and with the inception of Accor chain in North America. This would create great opportunity for Accor to realize synergistic benefits that can be in form of cost based, revenue based or finance based synergies, which would in turn give Accor a competitive edge over its market competitors and that is how the Motel 6 will be a best fit in the whole organizational structure of Accor itself

ACCOR SHOULD CONTINUE OPERATIONS IN NORTH AMERICA WITH MOTEL 6 OR SHOULD BE TREATED AS AN INDEPENDENT COMPANY?

The answer to this question would be highly dependent on the fact that whether the introduction of Accor in the North American territory will be beneficial for the group as a whole or the introduction of Accor chain in the North American Territory will affect the market share and profitability of Motel 6. This is  because, sometimes, two business divisions with same overall business model can cannibalize the profits and shares of another division. If this will be a case, then this would ultimately affect the group profitability as a whole and none of the investment in terms of Accor in North America will be worth it. Furthermore, there are other hotels apart from Motel 6 as well; these are Marriot, Hilton Hotels, and many more covering almost same market area and are operating in the United States with the same popularity.

This further suggests that they will have a role in the success or failure of Accor and Motel 6 in North America. Accor 6 should be treated as an independent company if top management and founders find it difficult to extract out valuable synergies and combinations. Otherwise, if there is a possibility that Accor will manage its operations in such a way that it would help Motel 6 in establishing new customer base, then these two entities can be combined together to exploit new opportunities.

WHICH ORGANIZATIONAL STRUCTURE IS TO BE FOLLOWED IN NEW GROUP ESPECIALLY AFTER THE ACQUISITION OF MOTEL 6?

Over the past years and many acquisitions, the Accor founder find it hard to establish one single organizational structure for the whole group. However, in the case of different business divisions operating in different geographical locations, it is necessary to follow contingency approach because no approach is suitable apart from the structure, which is a best fit for the organization’s growth and contributes in the organization organic growth................

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