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8/10/2019 7.Competitive Strategies in Tourism & Hospitality
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COMPETITIVESTRATEGIESIN
TOURISM& HOSPITALITY
Course 7
February 2014
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CONCEPTUALOVERVIEW
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STRATEGICTHINKING
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STRATEGYFORMULATION
Formulation:process by which an intended
strategy is created
Formation:process by which realized strategy is
formed
Both are processes. Strategy making is a craft
(Mintzberg, 1999)
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SOMEHISTORY
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ENVIRONMENTSCANNING
Environment affecting any hospitality company is
divided into two areas:
1. GENERAL : broad forces affecting industry andsociety (i.e. technology, politics, economics, socio-
cultural issues)
2. TASK: forces affecting the supply of resources,shifts in competitor behavior, impact of industry
specific legislation, changes in consumer markets
Environmental analysis should be based on reliable
information to provide a valid assessment.
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CLASSICALAPPROACHOFSTRATEGIC
FORMULATION
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WHITTINGTONSGENERICPERSPECTIVESON
STRATEGY
Outcomes
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EVOLUTIONARYSCHOOL
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EVOLUTIONARYSCHOOL(2)
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WHITTINGTONSGENERICPERSPECTIVESON
STRATEGY
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PROCESSUALAPPROACH
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PROCESSUALAPPROACH(2)
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PROCESSUALAPPROACH(3)
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WHITTINGTONSGENERICPERSPECTIVESON
STRATEGY
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SYSTEMICAPPROACH
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SO.
Role of rationality?
Role of culture?
Role of power/politics?
Role of markets?
How we view strategy influences how we do it and
thus we decide: context, process and content!
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WHITTINGTONSGENERICPERSPECTIVESON
STRATEGY
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STRATEGYPROCESS- HOTELCORPORATION
1. Strategic planning System
communicate corporate vision
negotiate strategic intent
delineate the responsibilities for developing and
implementing strategies
2. Monitoring, Control and Learning
monitor and control output
monitor and control effort
monitor changer in underlying assumptions facilitate organizational learning
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STRATEGYPROCESS- HOTELCORPORATION(2)
3. Incentive System
build congruence between the strategic intents of
business unit managers and their superiors
encourage the exchange of full and valid business
information
4. Staffing system
match managerial experience and personality with
business mission
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STRATEGICORIENTATIONSANDGROWTHPOLICIES
Strategicorientations
Growth Policy
Defenders Growth focus is deeper penetration
into current markets
Prospectors Growth focus is through the locationof new markets, products or
services
Analyzers Growth focus through both market
penetration of existing markets andalso through market development
Reactors Management fails to articulate a
viable strategy
Source: Miles and Snow (1978)
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OPERATIONALEFFECTIVENESSVS. STRATEGY
Organizational effectiveness is not strategy
because it is simply performing similar activities
(better) than rivals.
Strategy(or strategic positioning) is performing
different activities from rivals, or performing similar
activities in different ways.
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QUESTIONSFORSTRATEGYFORMULATION
Are you being nonlinear? Creative and analytical at the sametime or just one of two?
Are you framing the problem correctly? Pinpointing the criticalissue?
Are you aware of your personal biases?
Knowing w hat not to do, when not to do someth ing, is asimpo r tant as know ing what to do and when to do i t (Sun Tzu
Art o f War). If the essence of strategy is choosing what NOT to do, what will
your firm notdo?
Did you distinguish between operational effectiveness andstrategy?
If strategy is about being different, what are your different set of
activities that deliver a unique value package? Different activities? Different way of performing the same
activities?
Is your strategy (or your competitive advantage) sustainable? Ifso, what makes it so? If not, why not? Could it be?
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STRATEGYANDENVIRONMENTALANALYSIS
How will be the future in 5 years? How will customers travel?
How will they communicate?
What distribution channels will you use?
How did you think about the future (5-10 years)? Did you base yourself on the past?
Are you benchmarking?
Did you guess?
Strategy and environment (firm, politics, etc.) strategy is a mediator between the firm and the
environment (Mintzberg, 1986)
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STRATEGYANDENVIRONMENTALANALYSIS(2)
Why (Not) Strategy: Planning Direction Strategic planning sets direction,
Assumes predictable environment and future.
Formulation/implementation
Strategic thinking, however, assumes future cannotbe predicted
Why (Not) strategy as Perspective?
Coordinates activity. Without it, just a bunch of
individuals going in own ways.
Groupthink
Risk of being unable to change strategy and actions
when need to do so
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SCANNINGTHEENVIRONMENT
identification of environment forces that potentially
affect the industry
continuous study of the evolution of some variables
in the firms environment
analysis of relationship between different external
variables
estimation of future evolution of these forces and
their impact
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THESTRATEGICMANAGEMENTPROCESS
Source: Harisson, 2003
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COMPONENTSOFSTRATEGICANALYSIS
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QUESTIONSONBROADENVIRONMENT
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QUESTIONSONBROADENVIRONMENT(2)
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QUESTIONSONBROADENVIRONMENT(3)
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QUESTIONSONBROADENVIRONMENT(4)
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INFLUENCEOFEXTERNALSTAKEHOLDERS
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INFLUENCEOFEXTERNALSTAKEHOLDERS(3)
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TACTICSFORWORKINGWITHEXTERNAL
STAKEHOLDERS
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TACTICSFORWORKINGWITHEXTERNAL
STAKEHOLDERS(2)
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TACTICSFORWORKINGWITHEXTERNAL
STAKEHOLDERS(3)
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DEFENSIVESTRATEGIES
Growth Strategies Competitive methods
Joint ventures Technology based systems
Franchising Brand development
Strategic alliances Product quality
Management contracts Sophisticated pricing
Conversions Global marketing and
advertisingSale and leaseback
Acquisition of small
firms (M&A)
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ORGANIZATIONALRESOURCESANDCAPABILITIES