Final thesis of strategic management of IMBA

20200903041
IMANE ATWANI

Competition Strategy of hotels operation of Accor-Risma

Company.

1 Brief introduction of Accor-Risma company.

Accor-Risma is a Moroccan tourist operator created in 1993 as a private company, and
headquartered in Casablanca, is the first Moroccan touristic company to make its initial
public offering at the Casablanca Stock Exchange in 2006 (ISIN code: MA0000011462) The
main Activity is the operation of all activities relating to the hotel, catering and tourism
industry (including activities related to accommodation, conferences and seminars,
thalassotherapy, hydrotherapy, leisure activities) in Morocco. established in 13 cities, Accor-
Risma offers an approximate number of 5179 rooms with more than 35 hotels all over the
kingdom’s territory. Amine Echcherki is the current chairman of the management board. The
vision statement is the following: “Risma is a hotel investor serving the Moroccan Tourism
sector”. The mission statement “Risma is the first tour operator in Morocco. Resolutely
involved in the dynamic of a continuous evolution, Risma aims to consolidate its role as
leader in the tourism industry and to support the national strategy of the touristic
development in order to make of Morocco one of the top 20 destinations in the world”.
Accor has implemented a strategy of diversification and balance: balance in range coverage
with a multi-product offering, balance in geographic coverage and balance in operating
methods. Present in all market segments, from zero to five stars, Accor has established itself
as a major player in both budget hotels, with the Ibis, Etap Hotel, Red Roof Inns, the Sofitel
brand the Novotel, Mercure and Coralia brands. This multi-segment positioning responds to
the Moroccan government's strategy to develop a wide range of products in Morocco. The
company website http://www.risma.com/

2 Internal environment analysis and IFE matrix of hotels operations

for Accor-Risma company
The internal analysis of the company environment consists of capitalizing on internal
strengths and overcoming weaknesses, therefore the company have to gain and sustain a
competitive advantage. The internal audit requires gathering, assimilating, and prioritizing
information about the firm’s management, marketing, finance, where we can see that
Risma’s sales increased by an average of 10% between 2015 and 2018, the company
generates $52.15 million in sales, the increase can be explained by the high net working
capital that was needed for Risma to develop and operate new hotels.
In order to analyses the internal environment of the company the internal factor evaluation
matrix can be used.
The IFE matrix is a strategic management tool for auditing or evaluating major strengths and
weaknesses in functional areas of a business, stands at the input stage of strategy
formulation framework, Weight attribute in IFE Matrix indicates the relative importance of
factor to being successful in the firm's industry. rates of internal factors indicate how
 effective the company’s strategies, where 4 the response is superior, 3 the response is above
average, 2 the response is average, and 1 the response is poor. The sum of all weighted score
is equal to the total weighted score; the final value of the total weighted score should be
between 1(low) and 4 (high). To obtain the weighed score we have to multiply the rating of
each factor by its weight.
The average weighted score for IFE matrix is2.5, any company that has a total weighted score
below 2.5., is considered as weak. the company that has a total weighted score higher than
2.5, is considered as strong imposition. Figure 1 shows the IFE matrix for Accor-risma
company, the company is geographically present, and is taking advantage from this strength.
This is why it is given a rate of 3. Regarding using, its strengths to capitalize on internal
weakness, the company has various brands that are well known, such as Sofitel and Pullman.
The company is taking advantage of these brand names, and therefore a rate of 4 was
assigned. Using its wide range of services provided, the company satisfies a large number of
customers, therefore a rate of 4 was assigned to this component. The premium services
offered by the company using a partnership with Samsung are giving a high customer
experience, and Accor-Risma is taking advantage of this component. Accor is targeting more
and more sensitive places of growth in Morocco and are taking advantage from this
economic growth, therefore the rate of 2 was given to this component. In addition, Accor is
known by its high quality services, and therefore a crore of 4 was given to this component as
the company is taking advantage of it.
Regarding the weaknesses, the company still depends on the European market, and
therefore a rate of 4 was assigned to this component. In addition, the dependence in these
markets results in a high volatility of income, therefore a rate of 2 was given to this
component. Further, the company incurs a high employee turnover, and is not taking
advantage of this; therefore, this component was assigned a weight of 2. Furthermore, the
low marketing in Morocco results in low brand recognition within the Moroccan perspective,
and the company is not taking advantage of this. Consequently, a weight of 3 was assigned to
this component. The high investment requirement results in a low liquidity of the company
and a low maximization of shareholder’s value. Therefore, these components were assigned
a rate of 2 and 1 respectively.
Based on the weight assigned it can be concluded that the company is was able to use its
strengths to overcome the weaknesses, weighted score is 2. 87 (which is greater than 2.5)
shows a strong internal position but there are still issues to be sorted out.

Figure 2 : IFE, The internal Factor Evaluation Matrix of Accor-Risma company

Weighted
Key external factors weight Rating score
STRENGHTS      
Variety of hotels with various geographical presence 0.07 3 0,21
Well-known brands internationally 0,1 4 0,4
Satisfies large segments of customers (From Sofitel to Ibis) 0,17 1 0,17
Partnership with Samsung to provide more premium services 0,08 4 0,32
Effective booking system to optimize sales (Travel Accor Reservation System TARS) 0,12 3 0,36
Targeting sensitive high growth locations (Casa nearshore, Tangier free zone) 0,11 2 0,22
High quality of service 0,09 4 0,36
WEAKNESSES      
Depends on the European tourists market in Morocco 0,06 4 0,24
High volatility of net income 0,05 2 0,1
High employee turnover 0,05 2 0,1
Low marketing investment in Morocco 0,08 3 0,24
Low liquidity 0,06 2 0,12
Low maximization of shareholders value 0,03 1 0,03
TOTAL 1   2,87

3 External environment analysis and EFE matrix

In order to analyze the external environment, the company need to analyze the tourism
industry as a whole by using Porter’s 5 forces analysis, where we can found that the
bargaining power of suppliers and consumers for Accor-risma is considered to be medium for
both, Threat of substitute products is high, Threat of substitute products is high due to high
potential alternatives, for the potential entry of new competitors is low. Also the external
factors can be gathered from the micro environment by conducting a PESTEL analysis to
evaluate the political, economic, social, technological, legal, and cultural forces.
The External Factors Evaluation EFE matrix is a strategic-management tool often used for
assessment of current business condition, it indicates whether the firm is able to effectively
take advantage of existing opportunities along with minimizing the external threats. Similarly,
it will help the strategists to formulate new strategies and policies on the basis of existing
position of the company. After following the steps for assigning the matrix according to the
process introduced by Fred R. David in his book ‘Strategic Management’, we can introduce
the EFE matrix provided in the figure 2, that shows the external factors and results obtain.
1-For the Morocco vision 2030, the Moroccan government is boosting its tourism sector by
opening new accommodation establishment forming institutions in order to create a
qualified local workforce for foreign investors, the subsidies offered by the government for
the hospitality industry are effective in attracting new foreign investors and training
programs for the workforce offered by the government. We choose a rating of 4 for the first
opportunity thanks to the help and assistance provided by the government to investors.
The urbanization rate has been increasing in the last years, to record a 4% positive growth.
The growing urbanization implies that more workforce available in the marketplace, as well
as a decreasing rate of unemployment. We choose to put a rating of 2 because we believe
that the growing urbanization has not a big impact on the external position of the company.
The number of tourists’ arrival has recorded a 7% increase compared to last year; nearly an
additional million tourists. Referring to the table of the occupancy rates of the different
regions in Morocco, we can see that the regions of the kingdom with the most visits are
Marrakech, Agadir & Casablanca respectively. Moreover, the majority of the hotels belonging
to the Accor chain are located in those regions and are well spread over the regions with
different formulas offered to customers from different purchasing buying power.
Last-The decrease in the illiteracy rate is associated with the government effort made to
improve both the health care and educational system. By doing so, the public has access to
these resources, and the social middle class is most likely expected to grow which will create
more potential customers to the Accor group and the hospitality industry. We chose to
allocate a rating of 1 to the opportunity because the opportunity may exploitable in the long
run and its impact also is for coming years, not in the short run.
For the threats, the foreign currency exchange rate fluctuation is a factor to be considered by
 investors in the selection of the country to invest in. The Moroccan MAD does not have a
significant variation, since the currency variation has reached a maximum of +- 0.06%. In
addition, the Moroccan MAD is an attractive currency to foreign investors, and the
availability

of opportunities in the hospitality sector since the industry is growing, we give it a rate of 1.
Airbnb is a website that aims to find and list lodging items. The website constitutes a real
threat to the hospitality industry since it can be considered as a substitute product for
potential customers. The website offers new services such as the exchange of houses
between the website members that is becoming a new trend and a more spread way to
spend cheap holidays. This new service constitutes a real threat to the hotel chains present
in the territory and abroad. The website is offering its services worldwide, and the service
just started to operate in Morocco. Moreover, accommodation establishments are promoting
their services through the website in order to compete with individual listings present in the
Moroccan kingdom. We decided to put a rating of 3 to this threat because the service offered
by the website is not well spread. The concept offered by Airbnb is still fresh and only people
accessing the internet may know it or already experience the service.
The political instability of the south region of the territory is constituting a threat for the
hospitality industry due to the Opportunities present to exploit in the south, as well as the
low number of hospitality institutions present in that region. A rating of 2 has been allocated
to this threat because the regions with the most visited rate in the south record their high
number of arrivals in summer.
The competition among hospitality establishments in Morocco is harsh, the company is
already using differentiation strategies even for the midscale and economical hotels such as
free WI-FI and breakfast. However, the entrance of new competitors such as Four seasons
hotels is dangerous for Accor, since the upscale & luxury segment of Accor hotels is
generating a high percentage of their revenues.
To summarize the EFE matrix of Accor-risma group, the total weighted score was 3.0 which is
above the average (midpoint) of 2.5, it shows that the case company has been able to
manipulate the opportunities and have been able to counter threats.

Figure 1: EFE, The external Factor Evaluation Matrix of Accor-Risma company

Weighted
Key external factors weight Score rating
OPPORTUNITES      
Demand for more lodging supply of 200K beds of the objectives of Maroc 2030 0.1 4 0,4
Morocco’s strategic geographic location 0,1 3 0,3
Growing urbanization in Morocco by 4% 0,03 2 0,06
Increase of tourists arrivals by 7% 0,09 3 0,27
Demand for more lodging supply in France 0,15 3 0,45
Decrease of illiteracy rate by 20% 0,1 1 0,1
THREATS      
Foreign currency exchange rate fluctuation 0,12 1 0,12
Rise of Airbnb 0,2 3 0,6
Political instability in the south region of Morocco 0,07 2 0,14
Rough competition in Morocco (Atlas & Kenzi) 0,14 4 0,56
TOTAL 1   3.0
4 Analysis and selection of competition strategy of hotels operation
for Accor-Risma Company (SWOT and QSPM)
In order to generate alternative strategies and analyze the competition strategy, we will
follow the framework of strategy formulation starting with the input stage where we analyze
the external and internal environment of the company and develop the EFE, IFE matrix which
is discussed in the second part of this thesis.
 The SWOT Matrix is a matching tool that is included in the second stage; matching stage
Of strategy formulation framework, it analyzes the internal strengths and weaknesses and
external opportunity and threats by matching them together to consider different strategies
that can be implemented into operations. for the company case, we are matching internal
and external critical success factors in order to generate feasible alternative strategies, which
is presented in figure 3. We aim to select best strategies based on multiple alignments. Yet
not all of these strategies are going to be implemented. This matrix is composed of four
quadrants:
1. SO Strategies: These strategies are considered as the most appropriate one to exploit for
our strategy implementation, by using the firm’s internal strengths to take advantages of
external opportunities.
 Investing in artificial Intelligence Domotiqua. (Fibaro System) which is the leading home
intelligence Automation. This product is using the Z-wave Technology that mainly allows you
to connect and control all the domicile electric devices through a smart interface without any
interference. The tools used aren’t cumbersome and can be monitored externally with
extreme ease to emphasis the safety of customers and enhance customer experience
 Product development through the opening of an Adagio Access in “Plage des Nations”,
this little city is located in the center of Morocco, half an hour from Rabat, it is known for its
incredible Surf Spot. All over the year, surfers and tourists come to this Eldorado looking for
thrills. At the coming years there is a Business School that is going to open a new Business
College in the area which can be seen as a niche target market.
 Market penetration through opening an IBIS Budget next to the International Airport of
Rabat/Salé. This new airport has been inaugurated. In 2018, the ONDA registered over
650000 passengers passing which can be considered as a potential target market.
2. WO Strategies: In order to implement these strategies, the group must search for more
information in a way to take advantage of opportunities and overcome the weaknesses.
Market development: Opening Novotel in seaside resorts in Tanzania.
 Enhancing the service and product provided through sustainability program. These
programs
will be held to emphasis the sustainability of the brand and social responsibilities
engagement. In order to achieve this strategy, Accor Hotels will increase the percentage of
Eco labeled products used in the hotels, use more recycle products, decrease the energy
consumption and use renewable ones.
 Product Development: travel Agencies and Booking sites. In order to increase the number
of sales, Accor might need to develop possible packages for the customers. Concerning
Morocco, Honeymoon packs couples, clubbing packages for young adults. Yet, in order to do
so, Accor must allocate more money to the advertising media part to emphasis their online
presence. This deals and packages will help increase the occupancy rate of Moroccan Ibis
Hotels. The infrastructures are there but the envy must come with.

3. ST Strategies: (confront): a suggestion of potential strategies taking advantage of strengths

and avoiding any threats. For the strategy implementation, there are considered as strategies
to confront before considering any outcome.
 Partnership with RAM through promoting in Social Media to target potential customers
Morocco and Elsewhere. This strategy will aim to increase brand awareness and customer
engagement through heavy marketing campaign.
 Innovation: changing the food suppliers of food for IBIS division. The restaurant ‘La Table’
offers International and varied menu to the clients but the quality is meet the standards.
Food is an important factor for the hotel industry.
 Real time Marketing Strategy (RTM): emphasis the user engagement through e-marketing
campaign.
4. WT Strategies (avoid): this last quadrant is mainly composed of strategies to avoid. The
return is not worth the risk. Where we have the vertical Integration by emphasis the ‘Projet
Femmes du Rif’
 The QSPM matrix it stands for Quantitative Strategic Planning Matrix, is a strategic tool
which is used to evaluate alternative set of strategies,
The matrix incorporates earlier stage details in an organize way to calculate the score of
multiple strategies in order to find the best match strategy for the organization. The QSPM
comes under the third stage of strategy formulation which is called “The Decision Stage” and
also the final stage of this process, first there is the weighting of each of the previously
identified internal and external factor, then the strategic alternatives determined by the
attractiveness score (AS) of each external and internal factor. The attractiveness score of each
factor will be multiplied by the weight of each factor to get the total attractiveness score
(TAS),
The highest sum total attractiveness score indicates the alternative strategy which is the
main choice.
In our case, from the figure 4 we can conclude that there are two strategies to be compared
based on Strengths, Weaknesses, Opportunities and Threats. The purpose of this matrix is to
rate each strategy to finally choose which one to implement and which one to avoid.
The strategy that came up with the highest Total Attractiveness Score is the Market
Penetration with a sum TAS of 4,64, through the installation of an Artificial Intelligence
Fibaro Domotiqua. Fibaro System (Domotiqua) is a set of artificial intelligence devices that
will make possible the automation of all the domicile devises. Thanks to the Z-wave
technology used by the products, it allows you to connect and control all the domicile
electric devices through a smart interface without any interference. The tools used aren’t
cumbersome and can be monitored externally with extreme ease to emphasis the safety of
customers and enhance customer experience.
FIGHUR 3: SWOT matrix for Accor-Risma
STRENGHTS WEAKNESSES
1-Variety of hotels with various 1-Depends on the European
geographical presence tourists market in Morocco
2-Well-known brands internationally 2-High volatility of net income
3- Satisfies large segments of customers 3-High employee turnover
(From Sofitel to Ibis)
4-Partnership with Samsung to provide 4-Low marketing investment in
more premium services Morocco
5-Effective booking system to optimize sales 5-Low liquidity
(Travel Accor Reservation System TARS)
6-Targeting sensitive high growth locations 6-Low maximization of
(Casa nearshore, Tangier free zone) shareholders value
  7- High quality of service  
WO Strategies WO Strategies
OPPORTUNITES
Market penetration Product development
1-Demand for more lodging supply of 1: introducing the artificial intelligence 1. Promoting social media to target
200K beds potential customers in Morocco
Domonique in the Sofitel luxurious resorts
2-Morocco’s strategic geographic and elsewhere (W1, W2, W5, O1,
location (S3, S7, O4, O5)
2: Opening Adagio Access hotel in “Plage O5). 2. changing the
3-Growing urbanization in Morocco by
des Nations”. (S1, S3, S7, O1, O2, O3, 04) food supplier of IBIS (W2, W5, O4).
4%
4-Increase of tourists arrivals by 7% 3. Market penetration through opening an 3. Real-Time Marketing RTM (W4,
5- Demand for more lodging supply in IBIS near the international airport or Rabat O1, O3, O4)
France (S01, S02, S07, O1, O2, O4)
6-Decrease of illiteracy rate by 20%
ST Strategies WT Strategies
THREATS Product Development Vertical Integration
1-Foreign currency exchange rate 1. Opening Novotel in seaside resorts in 1 Emphases the “Projet Femmes du
fluctuation Tanzania (S1, S2, S5, T2). Rif”’ (W1, W4, T4)
2-Rise of Airbnb 2.Enhancing the service and product
3-Political instability in the south provided through sustainability program
region of Morocco (S1, S2, S5, T2, T3).
4-Rough competition in Morocco 3. through the opening of an Adagio Access
(Atlas & Kenzi)
in “Plage des Nations”. (S1, S2, S5, T2, T4)
Figure 4: QSPM matrix for Accor-Risma COMPANY
strategy alternatives
product market
developmen penetratio
  t n
OPPORTUNITES Weight AS TAS AS TAS
1-Demand for more lodging supply of 200K beds 0.1 4 0,4 4 0,4
2-Morocco’s strategic geographic location 0,1 3 0,3 3 0,3
3-Growing urbanization in Morocco by 4% 0,03 2 0,06 2 0,06
4-Increase of tourists arrivals by 7% 0,09 3 0,27 3 0,27
5- Demand for more lodging supply in France 0,15 3 0,45 3 0,45
6-Decrease of illiteracy rate by 20% 0,1        
THREATS          
1-Foreign currency exchange rate fluctuation 0,12        
2-Rise of Airbnb 0,2 1 0,2    
3-Political instability in the south region of Morocco 0,07 3 0,21 3 0,21
4-Rough competition in Morocco (Atlas & Kenzi) 0,14 2 0,28 1 0,14
TOTAL 1        
STRENGHTS          
1-Variety of hotels with various geographical presence 0.07 4 0,28 4 0,28
2-Well-known brands internationally 0,1 3 0,3 1 0,1
3- Satisfies large segments of customers (From Sofitel to Ibis) 0,17 3 0,51 3 0,51
4-Partnership with Samsung to provide more premium services 0,08     2 0,16
5-Effective booking system to optimize sales (Travel Accor
Reservation System TARS) 0,12 3 0,36 2 0,24
6-Targeting sensitive high growth locations (Casa nearshore,
Tangier free zone) 0,11 3 0,33    
7- High quality of service 0,09 4 0,36 3 0,27
WEAKNESSES          
1-Depends on the European tourists market in Morocco 0,06 1 0,06 3 0,18
2-High volatility of net income 0,05 1 0,05    
3-High employee turnover 0,05 2 0,1 2 0,1
4-Low marketing investment in Morocco 0,08     1 0,08
5-Low liquidity 0,06 2 0,12 3 0,18
6-Low maximization of shareholders value 0,03 2 0,06 2 0,06
TOTAL 1   4,64   3,99
5 Conclusion
Accor-Risma is one of the main players in the tourism industry in Morocco. In fact, its
geographical presence in the country with its spread investments makes from it one of the
leaders in this domain, and the only one traded in Casablanca Stock Exchange. In addition, one of
the most attracting characteristic of this company is that it operates a variety of hotels that
include the luxurious ones such as Sofitel as well as the low cost ones such as Ibis budget.in this
paper we present first a brief introduction about the company, in addition to the vision and the
mission statement, as a second part we analyzed the internal environment of the company by
using the internal factor evaluation matric IFE which is a strategic tool used to capitalize the
strengths and overcome the weakness, in the case of the company studies we found that the
sum of the weighted score was above the average 2.5 which shows that the company is in a good
position using the current strategies but need some improvement .Next we analyzed the external
environment of the company by analyzing the industry as a whole where we used porter 5
forces analysis and we showed that the PESTEL analysis can also be used but we focused on the
external factor evaluation matrix EFE that is considered as strategic tool, it indicates whether
the firm is able to effectively take advantage of existing opportunities along with minimizing
the external threats as a results we found the sum weighted score is also above the
average2.5 .as for the last step to evaluate the alternative strategies we used the SWOT
matrix and gendered some strategies that can be used in QSPM matrix as a decision stage to
choose the best alternative strategy , for Accor Risma it was the penetration strategy hat
have the highest total attractiveness score.
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