As customers are often reluctant to eat in hotel restaurants because they assume that they are too expensive, Accor (Sofitel, Novotel, Mercure, Pullman, Ibis, Ibis styles and others) is looking at buying over the Secret Recipe chain (restaurants in Malaysia, Singapore, Indonesia, Thailand, China, Brunei, Cambodia and Myanmar) to place a Secret Recipe in each of its Ibis and Ibis Styles properties (4 in Malaysia, 2 in Singapore, 12 in Thailand and 83 in China) as well as maintain the current restaurants. Accor hotels are typically under management contracts with local owners. a. Analyse whether this strategy would be considered a related diversification strategy or an unrelated diversification strategy.
As customers are often reluctant to eat in hotel restaurants because they assume that they are too expensive, Accor (Sofitel, Novotel, Mercure, Pullman, Ibis, Ibis styles and others) is looking at buying over the Secret Recipe chain (restaurants in Malaysia, Singapore, Indonesia, Thailand, China, Brunei, Cambodia and Myanmar) to place a Secret Recipe in each of its Ibis and Ibis Styles properties (4 in Malaysia, 2 in Singapore, 12 in Thailand and 83 in China) as well as maintain the current restaurants. Accor hotels are typically under management contracts with local owners.
a. Analyse whether this strategy would be considered a related diversification strategy or an unrelated diversification strategy.
b. Analyse the synergies between the two companies in terms of strategic fit.
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