An exploratory study on the localization of French-based Accor Hotel Group : Focused on the case of hotel service market in Korea
Authors:   Asia-Europe Perspective Association, Kim Janghoon , Kim Byungsoon 
Published: June 2018

Recently hospitality service or hospitality industry has been emerging as a major business in global market. However, As for Korea, there is room for to define business model and to realize the potential of hospitality industry. In general, hospitality industry ―accommodation, food and beverage, leisure tourism and healing― is recognized to provide tangible and intangible service via customer contact point. Among other service sectors hospitality service is closely relevant to economic growth and development of a country. As for Korea, competitive advantage in hospitality industry will play a major role to advance developed country. Meanwhile, hotel business are faced to business opportunity, given that foreign tourists have been growing since 2010 owing to Hanryu fever, or Korean cultural boom in asia. In the end, global competitiveness depends on how to realize business opportunities in hospitality industry. Therefore, it is high time to build competitive advantage in the industry and nurture service multinationals viable in global and local markets.
‘Big question’ in international business is concerned in foreign direct investment, internationalization of a firm and MNE’s strategy. In this vein, extant research has been focused on manufacturing multinationals especially in emerging markets. As widely known, emerging country is a fast follower, which is to seek economic growth rapidly after advanced countries in the Western. For example, the country was recognized as BRICs(Brazil, Russian, India and China) and Post-BRICs like Eastern Europe, Turkey, Mexico, Vietnam and Indonesia, etc. However, there is little study on service multinationals in hospitality industry like hotel service. Against this backdrop, we are to try to explain the localization of service multinationals in emerging market with heterogeneity. That is, this study analyzed how to respond micro institutions in hotel service market, and how to tailor its strategy to the local market in Korea. According to the case analysis, Primarily, headquarter tried to take initiative with global standard ―brand power, global network, standardized service, global operation system― to respond global integration by industry globalization potential. Second, Accor-Ambassador Korea(hereafter, AAK) tailored multi-brands strategy to customer needs & wants in the local market. For example, AAK simultaneously introduces Accor hotels brands, e.g. Sofitel, Pullman, Novotel, Mercure, and Ibis, to the Korean market with the help of headquarter. Third, as for entry mode, AAK incrementally enhances localization in accordance with sequential entry like franchising, management contract, partnership, and joint venture. In other words, Accor tried to gain access to local service knowledge from the Korean counterpart Ambassador hotel while both have long-term relationship. Fourth, AAK proposed clear-cut brand positioning with the help of market research, considering heterogeneous customer needs and wants. Last and the least, under the guideline of Accor Foundation, AAK has carried on social responsibility to build local friendly brand image. Until now, AAK has conducted on successful localization to deal with both industry globalization potential and local market heterogeneity, combining headquarter initiative and local market knowledge.
In conclusion, multinationals in emerging market with high volatility are inclined to be heterogeneous situation of product/service market. In other words, this study suggests that MNEs pay attention to the change of micro institutions, e.g. consumption, customer, dominant local player, local competition, which give rise to heterogeneity of product/service market. That is, MNE has to enhance localization to the point of institutional isomorphism to respond micro institutions. From the results, implication and future research are elaborated as follows.