7.Competitive Strategies in Tourism & Hospitality

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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STRATEGY


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PROCESSUALAPPROACH


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PROCESSUALAPPROACH(2)


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PROCESSUALAPPROACH(3)


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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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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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INFLUENCEOFEXTERNALSTAKEHOLDERS


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INFLUENCEOFEXTERNALSTAKEHOLDERS(3)


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TACTICSFORWORKINGWITHEXTERNAL

STAKEHOLDERS


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STAKEHOLDERS(2)


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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

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7.Competitive Strategies in Tourism & Hospitality

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