Business model of Sodexo

Customer Segments

Sodexo has a large client base, primarily comprising medium and large commercial enterprises and various other organisations. 

The company primarily serves customers across the following five business segments:

• Business and Administration, comprising private commercial enterprises, across a range of sectors, including the financial services, banking, and administration sectors;
• Health Care and Seniors, comprising hospitals, clinics, assisted living facilities, and other medical practice organisations;
• Education, comprising schools from grades K through to 12, universities and colleges, seminaries, and trade schools;
• Government, comprising public institutions, government agencies, prisons, military organisations, and other government run bodies; and
• Benefits and Rewards Services, comprising business operating in the retail and travel sectors.

Sodexo serves a global customer base, with operations across 80 countries spanning the Americas, Asia Pacific, Europe, the Middle East, and Africa.

Value Propositions

Sodexo provides value to its clients in the following ways:

• Size and Standing – Sodexo is one of the largest providers of on-site services and personal home services in the world and is a well-known and well-regarded company within the industry, enabling it to attract a large customer base;
• International Reach – Sodexo has an extensive operational reach that span markets across the Americas, Asia Pacific, Europe, the Middle East, and Africa, allowing the company to reach a wide range of clients from local or regional centres;
• Broad Portfolio of Services – Sodexo offers a wide range of services to its customers – including reception, sterilisation of medical equipment, cleaning, foodservices, and prisoner rehabilitation services – attractive a diverse client base;
• Tailored Services – Sodexo provides personalised solutions to its customers, working closely with its clients to ensure that their individual needs are met effectively;
• Commitment to Innovation – Sodexo devotes a portion of its resources to the development of new and innovative solutions that help to ensure that the company remains a leader in its field; and
• Sustainability and Environment – Sodexo is committed to sustainability and the protection of the environment, ensuring that its operations are within expected environmental guidelines and participating in sustainability projects.

Channels

Sodexo sells its services to customers directly through its sales and service teams.  These teams are organised across the company’s customer segments and operational regions. 

The company’s sales personnel operates out of the company’s extensive network of offices and service centres spanning the Americas, Asia Pacific, Europe, the Middle East, and Africa. 

Customers are able to make enquiries with the company through its website and over the phone.

Customer Relationships

Sodexo seeks to establish longstanding relationships with its customers, providing its services to customers directly through its extensive workforce. 

The company does not offer services on a self-service basis.  Sodexo works closely with its clients over an extended period of time, seeking to develop solutions that are tailored specifically to the needs of each individual client.

  The company’s sales and service personnel maintain close contact with relevant employees of its customer companies while under contract to ensure that services are provided to their satisfaction.

Sodexo operates a website at www.sodexo.com, through which it provides information on its services, operating locations, corporate responsibility activities, stock performance, and leadership on a self-service basis. 

The company also publishes media on its website – including press releases, video content, and corporate disclosures through which the company is able to provide updates and news on its operations.  Sodexo is additionally able to communicate directly with customers through its various social media accounts, including with LinkedIn and Twitter.

Key Activities

Sodexo functions as a holding company. 

Through its subsidiaries, the company provides a range of services, including as on-site services, benefits and reward services, and personal and home services.

It serves customers in around 80 countries worldwide, including operations in Continental Europe, North America, the United Kingdom and Ireland, and Rest of the World. 

The company’s solutions cover a range of services from construction management to reception, from medical equipment sterilisation to housekeeping, from technical maintenance to the organisation of events, and from foodservices to prisoner rehabilitation. 

The company additionally provides benefit and reward services designed to help manage employee benefits, incentive and recognition programs, expense management, public benefits, and gift cards and boxes. 

Key Partners

Sodexo works closely with a broad network of partner companies and organisations in support of its operations. 

These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, including suppliers of equipment and materials used in the provision of the  company’s various services, as well as companies that provide services to the company in support of its corporate activities;
• Retail and Distribution Partners, comprising a range of retail and merchant partners with which the company partners as part of its rewards and benefits programs, including convenience and supermarket stores, restaurants, movies and entertainment companies, and travel and leisure providers;
• Start-up and Investment Partners, comprising various start-up companies in which the company invests, with a view to using these resources to improve the quality and breadth of its services; 
• Innovation Partners, comprising a range of companies and organisations with which the company collaborates on developing and implementing new and innovative solutions for its clients; and
• Community and Charitable Partners, comprising a range of non-profit and charitable organisations with which the company collaborates on various community, social, and environmental projects.

Sodexo has launched a number of partnerships in recent years.  The company’s merchant partners include Burger King, 7-Eleven, Krispy Kreme, Under Armour, and Toys ‘R’ Us. 

The company has also invested in three start-ups Wynd, LifeDojo, and Neo-Nomade.

Key Resources

Sodexo’s business model depends on its ability to provide services effectively and efficiently.

As such, the company’s key resources are its supplies and inventory, its supply chain, its network of partners, its international network of office and operations locations, its IT and communications infrastructure, and its personnel. 

Sodexo notably has office locations across 80 countries worldwide, which are key to its ongoing operations.

Cost Structure

Sodexo incurs costs in relation to the operation of its development and innovation business, the procurement of supplies and equipment, the procurement of third-party services, the management of its partnerships, the operation of its offices locations – including occupancy and utility costs, the development and maintenance of its IT and communications infrastructure, and the payment of salaries and benefits to its personnel. 

In 2017, Sodexo recorded total cost of sales for the year in the amount of EUR 17.51 billion, and administrative and sales department costs for the year in the amount of EUR 1.98 billion

Revenue Streams

Sodexo generates revenue through the provision of on-site services and personal home services to a broad range of commercial and institutional clients. 

The company derives its revenue from the provision of its services under sales and service contract agreed directly with clients. 

In 2017, the company generated annual revenue totaling EUR 20.70 billion, up slightly on the EUR 20.25 billion recorded by the company the previous year. 

Sodexo generated the vast majority of its services through the provision of on-site services. 

The company generated EUR 9.17 billion from sales in North America and EUR 7.79 billion from sales in Europe.