Four Seasons Hotels and Resorts Goes to Paris

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Another threat is the huge disparity between the French national, organizational and business cultures and these of Four Seasons, which can lead to cultural misunderstandings and backlashes. For example, French have difficulties admitting weaknesses, empathizing, selling, they avoid confronting their superiors, they must see something to believe it, they have a strong logic of honor, they tend to be polychronic and they are policy oriented. All these aspects are in contrast with the North American culture and this big cultural gap can threaten Four Seasons’ operations.

Moreover, being considered as a US company by French (be they employee or partners) is also a threat, because French tend to demonize the US and reject what they consider as being cultural American imperialism.

The competition from the five other famous Parisian palaces is another threat for Four Seasons, because they compete for the same guests, in the same segment (luxury hotel). Moreover, when Four Seasons opened the Hotel George V in Paris, those 5 palaces were managed by European operator with prior experience in Europe and in France, so this made them more knowledgeable on French requirements and expectations than Four Seasons was.

3. Problem Statement

As the first hotel operated by Four Seasons in France, F.S. George V encountered several barriers entering this new market, which can be explained by the maladaptation of Four Seasons’ business culture to French culture, undifferentiated products compared to major competitors yet the highest price (“Palaces”), and high labor cost from extensive training and high employees-to-room ration.

4. Alternatives and Recommendations-Jae

- General global expansion strategies

A. Collaborating with local partners:

An entering firm can fill gaps in its understanding of a local market by collaborating with local partners, while at the same time the local partners use the firm’s know-how to develop a competitive advantage for themselves.

B. Understanding of the local market’s capacity:

If the local market cannot absorb transferred knowledge such as the firm’s characteristic design features and the firm’s culture, a firm will not enjoy a competitive advantage in that market. Therefore, choosing how to enter a foreign market depends on aligning the firm’s advantages and shortcomings with market’s resources and business conditions.

- To address cultural issues:

When hotel companies are considering entry into foreign markets, they need the most appropriate entry strategy. In the case of Four Season, they have suffered from cultural challenges. To address cultural issues, with preserving their own company’s structural and strategic characteristics, they should consider local market’s environment in order to make the hotel familiar to both local employees and local customers, and receive supports from local management team.

- Task Force

Task Force for foreign market entry strategy is needed to conduct research and anticipate difficulties in the new expansion area. Based on the results of the studies conducted by task force, Four Season can identify the factors that could affect decisions regarding international market entry strategies. For example, when an entering firm has little experience with or knowledge about a foreign market or potential partners there, the firm’s resources and capabilities will be put at risk.

- To address high labor cost from extensive training

Four Season can organize small low-cost team to lower high labor cost. That is, increasing communication effectiveness among employees and managers may surpass the effect of formal training.

Furthermore, Four Season can lower other cost to make up for the high cost of labor such as the cost spent at distribution channels and marketing. We can suggest e-marketing as an effective tool to promote them. Through new digital and social media, consumers can now share more informa­tion with their favorite brands so they in turn can respond in a more relevant and customized way. In this sense, Four Season can understand their customers better and have an ongoing dialogue with them more quickly by using e-marketing.

- To address the problem of undifferentiated products:

Four Seasons must continue to employ its key success strategy of providing experiences of exceptional quality, not only to their guests, but their employees. Guests come to Four Seasons because they can depend on the incredible quality, service, and comfort no matter what country they choose to visit. In that way, Four Seasons succeeds in fostering trust and truly building relationships with the people who encounter the brand. But this positive feeling is fostered by the talented staffing that Four Season exhibits and fosters from their quality company culture. By modeling their “Golden Rule” management at Four Seasons succeeds in gaining the “buy-in” of their employees who then embody and demonstrate this excellence to guests. Even the famous French chef Philippe Legendre agreed that it “Four Seasons’ real strength was around guest and employee relationship management”.

5. Evaluation of Alternatives and Recommendations-Camille

The AAA framework consisting of adaptation, aggregation, and arbitrage is often used to plan or evaluate a company’s global expansion efforts. Although it is possible to use all three methods, most companies focus on two of these aspects to build their competitive advantage. The AAA framework provides a basis for evaluating global strategies that cover three effective responses to large differences that are faced when crossing national borders. The framework is used to broaden perceived opportunities, sharpen strategic choices and enhance global performance. Evaluating Four Seasons’ expansion efforts considering the AAA framework will provide a better understanding of the strategies that were successful and the ones that can use improvement.

Adaptation seeks to boost revenues and market shares by adapting to the local context. Four Seasons Hotel made the proper adjustments when expanding into Paris. Prior to entering France, Four Seasons had an understanding that in order to be global the company could not operate in one concrete way. It knew that it had to remain true to the Four Seasons identity while establishing a local presence in