Tourism Case Study Examples Hospitality Management

Strategic Management for Hospitality and Tourism

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Strategic Management for Hospitality and Tourism Fevzi Okumus Levent Altinay Prakash Chathoth

AMSTERDAM • BOSTON • HEIDELBERG • LONDON •NEW YORK • OXFORD •PARIS SAN DIEGO •SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO

Butterworth-Heinemann is an imprint of Elsevier

Butterworth-Heinemann is an imprint of Elsevier The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB UK 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA First edition 2010 Copyright Ó 2010 Elsevier Ltd. All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone (+44) (0) 1865 843830; fax: (+44) (0) 1865 853333; email: [email protected] Alternatively visit the Science and Technology Books website at www.elsevierdirect.com/rights for further details Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of Congress ISBN: 978-0-7506-6522-3 For information on all Butterworth-Heinemann visit our website at elsevierdirect.com Printed and bound in Great Britain 10 11 12 13 10 9 8 7 6 5 4 3 2 1

Working together to grow libraries in developing countries www.elsevier.com | www.bookaid.org | www.sabre.org

Dedication My work on this book is dedicated to my family, my wife Bendegul, and our daughters, Ezgi and Eda for their patience and support necessary to complete this task. Without their endless and unconditional love, support, care and understanding, completing this project would not have been possible. Fevzi Okumus

I would like to thank my family for their support and encouragement in this endeavor. Levent Altinay

I would like to dedicate my work on this book to my family. Prakash Chathoth

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Contents PR EF AC E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x i i i

Part I Introduction to Strategy CHAPTER 1 Introduction to Strategic Management . . . . . . . . . . . . . . . . . . . . . . . . . 3 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Historical Origins of Strategy and Strategic Management . . . . . . . . . . . . 5 Schools of Thought on Strategic Management . . . . . . . . . . . . . . . . . . . . 7 Overall Aims of Strategic Management: Creating a Competitive Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Defining Key Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 The Book’s Approach and Structure . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 CHAPTER 2 Strategic Management in Hospitality and Tourism . . . . . . . . . . . . . . . . 19 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Defining the Hospitality and Tourism Context. . . . . . . . . . . . . . . . . . . . 20 Types of Hospitality and Tourism Organizations . . . . . . . . . . . . . . . . . . 22 Characteristics of Hospitality and Tourism Organizations. . . . . . . . . . . . 25 The Case for Strategic Management in H&T Organizations. . . . . . . . . . . 30 Applying Strategic Management in the H&T Context . . . . . . . . . . . . . . . 32 Strategy Research in the Hospitality and Tourism Field . . . . . . . . . . . . . 33 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Small Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

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Part II Strategy Context CHAPTER 3 The Hospitality and Tourism Industry Context . . . . . . . . . . . . . . . . . . . 41 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Characterising the External Environment. . . . . . . . . . . . . . . . . . . . . . . 43 Understanding the Macro Environment . . . . . . . . . . . . . . . . . . . . . . . . 47 The Task Environment and Influence of Industry Structure. . . . . . . . . . . 54 The Dynamics of Competition and Strategic Groups . . . . . . . . . . . . . . . 59 Environmental Scanning and the Hospitality/Tourism Firm. . . . . . . . . . . 60 The External Environment in the International Perspective . . . . . . . . . . . 62 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 CHAPTER 4 The Organisational Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Identifying Different Stakeholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Organisational Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 The Influence of Organisational Structure . . . . . . . . . . . . . . . . . . . . . . 74 Influence of Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Influence of Organisational Culture . . . . . . . . . . . . . . . . . . . . . . . . . . 80 The Organisational Context in the International Perspective . . . . . . . . . . 83 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Part III Strategy Content CHAPTER 5 Business-Level Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 The Parameters of Competitive Strategy . . . . . . . . . . . . . . . . . . . . . . . 92 What is the Basis of a Good Strategy? . . . . . . . . . . . . . . . . . . . . . . . . 94 Positioning and Generic Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 The Industry Life Cycle and Competitive Dynamics . . . . . . . . . . . . . . . . 99 Resources, Capabilities, and Competencies . . . . . . . . . . . . . . . . . . . . 102 Business-Level Strategy in the International Perspective . . . . . . . . . . . 105 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Contents

CHAPTER 6 Corporate-Level Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Corporate Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 The Portfolio Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Corporate Strategy and Adding Value . . . . . . . . . . . . . . . . . . . . . . . . 116 The Core Competence Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 Creating and Sustaining the Multibusiness Advantage . . . . . . . . . . . . 120 Corporate-Level Strategy in the International Perspective. . . . . . . . . . . 121 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . 125

CHAPTER 7 Network-Level Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Strategic Alliances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Franchising. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Management Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Wholly Owned Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Strategic Alliance Formation in the International Context. . . . . . . . . . . 140 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . 144

Part IV The Strategy Process CHAPTER 8 Strategy Formation—Strategy Formulation and Implementation . . . . . . 149 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Strategy Formation—Strategy Formulation and Implementation . . . . . . 153 Strategy Formation in the International Context . . . . . . . . . . . . . . . . . 163 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . 168

CHAPTER 9 Strategy Implementation and Change. . . . . . . . . . . . . . . . . . . . . . . . 171 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 Previous Implementation Frameworks . . . . . . . . . . . . . . . . . . . . . . . . 173

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Toward an Implementation Framework . . . . . . . . . . . . . . . . . . . . . . . 174 Barriers and Resistance to Strategy Implementation . . . . . . . . . . . . . . 182 Strategy Implementation and Change in the International Context . . . . 183 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Study Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . 186

Part V Synthesis CHAPTER 10 Conclusions: Relating Content, Context, and Process . . . . . . . . . . . . . 191 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 The Challenge of Strategic Management in the H&T Context . . . . . . . . 192 The Dynamics of Content, Context, Process, and Outcome . . . . . . . . . . 195 Sustaining Competitiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Managing Change and Creating Learning Organizations . . . . . . . . . . . 200 Strategic Management in an International Context . . . . . . . . . . . . . . . 202 References and Further Readings. . . . . . . . . . . . . . . . . . . . . . . . . . . 203

Part VI Case Studies CASE STUDY 1 Ocean Park: In the Face of Competition from Hong Kong Disneyland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 The Tourism Industry in Hong Kong . . . . . . Ocean Park . . . . . . . . . . . . . . . . . . . . . . . Competition . . . . . . . . . . . . . . . . . . . . . . Impact of Competition on Ocean Park. . . . . Ocean Park’s Positioning . . . . . . . . . . . . . Cash Strapped . . . . . . . . . . . . . . . . . . . . Master Plan Put to Test . . . . . . . . . . . . . .

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CASE STUDY 2 Six Flags: Is Recovery on the Horizon?. . . . . . . . . . . . . . . . . . . . . . 235 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 The Amusement Park Industry in the United States. . . . . . . . . . . . . 236 Six Flags, a Proud Past. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241 Recovery on the Horizon or a State of Flux? . . . . . . . . . . . . . . . . . . 244 Six Flags—a Thrilling Future? . . . . . . . . . . . . . . . . . . . . . . . . . . . 247 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251

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CASE STUDY 3 The Implementation Process of a Revenue Management Strategy in Britco Hotels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 Strategic Content. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 Environmental Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 Internal Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258 Implementation Process of the YMP Project . . . . . . . . . . . . . . . . . . 261 Outcomes of the YMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272 Appendix 1: Strategic Context in Britco Hotels and the Implementation Process of the Yield Management Project between 1990 and 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 CASE STUDY 4 Global Hotels and Resorts: Building Long-Term Customer Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 The Early Years of Global Hotels and Resorts. . . . . . . . . . . . . . . . . 277 Developing Relationships with Business Travelers. . . . . . . . . . . . . . 278 The Global Hotel Industry in the 1990s . . . . . . . . . . . . . . . . . . . . . 281 Organisational Structure from 1994 to 1998 . . . . . . . . . . . . . . . . . 283 Marketing and Sales Organisation . . . . . . . . . . . . . . . . . . . . . . . . 284 Managers in GHR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286 The Initial Implementation of the KCMP: 1994–1997 . . . . . . . . . . . 288 Project Rollout. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290 Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291 Implementation Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293 The Implementation Process between 1995 and 1997 . . . . . . . . . . . 294 Implementation under New Ownership . . . . . . . . . . . . . . . . . . . . . 296 Outcomes of the Key Client Management Project . . . . . . . . . . . . . . 297 Discussion Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298 CASE STUDY 5 Entrepreneurship and Leadership in Hospitality: Insights and Implications for Hospitality and Tourism Education . . . . . . . . . . . . 299 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299 Process and Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 Interview Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 Mr. Rosen on Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . 301

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Mr. Rosen on His Hotel Business . . . . . . . . . . . . . . . . . . . . . . . . . 304 Mr. Rosen on Management Philosophy and Style . . . . . . . . . . . . . . 311 Mr. Rosen on Leadership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 Mr. Rosen on Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 Mr. Rosen on Industry-Oriented Skills . . . . . . . . . . . . . . . . . . . . . . 315 Mr. Rosen on Philanthropy (‘‘Responsible Capitalism’’) . . . . . . . . . . 316 Conclusions and Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 Appendix A: Background of Mr. Harris Rosen, President and CEO of Rosen Hotels and Resorts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319 Appendix B: Rosen Hotels and Resorts Portfolio . . . . . . . . . . . . . . . 321 Appendix C: Rosen Hotels & Resorts Employee Programs: Work/Life Balance Week . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322 Appendix D: Mr. Rosen’s Philanthropic Activities . . . . . . . . . . . . . . 325 Appendix E: Mr. Rosen’s Awards and Recognition . . . . . . . . . . . . . . 327

I N DE X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 9

Preface This textbook equips students—the future leaders and managers of the hospitality and tourism industry—with an advanced and contemporary knowledge of strategic management. Specifically, it helps students to develop the analytical and practical managerial skills they will need to do their jobs professionally and efficiently. In this book, we take a holistic approach to strategic management, emphasising the importance of establishing synergies between the external and internal environments. The book is structured in a staged approach, to both help students understand the basics of strategic management and develop their own independent approaches to the complexities and uncertainities of the business environment. One of the distinctive characteristics of this book is its straightforward style in establishing the key dimensions of the external and internal contexts in which the strategy content and the strategy process are embedded in the hospitality and tourism industry. It also emphasises an appreciation of the major cultural differences and the various ways of doing business in different countries. The book has an innovative structure that consists of four main sections: the introduction, strategy content, strategy context, and strategy process. Each of the chapters in these sections has a thorough pedagogic structure consisting of an introduction, examples and vignettes, discussions points, exercises, case studies, and further reading and websites. Chapters 1 and 2 describe the characteristics of strategic decisions and strategic management and define the context and characteristics of hospitality and tourism organizations. They also establish the key dimensions of the external and internal contexts in which both the strategy content and the strategy process are shaped. Chapter 3 defines and explains the different layers of the hospitality and tourism organization’s external environment and examines their likely impacts on the organization’s operations. Chapter 4 identifies different elements of the hospitality and tourism organization’s internal environment and evaluates their influence on strategy formulation and implementation. Chapters 5 and 6 address business- and corporate-level strategies and show how an organization may attempt to respond to the external

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environment and gain competitive advantage. Chapter 7 identifies and evaluates different methods of collaboration for H&T firms in order to develop new products and to penetrate new markets. Chapters 8 and 9 define strategy formulation and implementation, respectively, and discuss the real-life complexities of both formulation and implementation. Finally, Chapter 10 brings the main threads of the book together and encourages readers to be ‘‘learning individuals’’ while remaining being learning oriented in their approach toward managing organizations. The book introduces ‘‘user-friendly’’ analytical techniques and applies them to international case studies. The case studies are specific and contemporary and carefully related to different aspects of strategic management. The global dimension of the hospitality and tourism business is a core focus, with a particular emphasis on the impacts of internationalisation and crosscultural issues on development of strategic decisions and their implementation. The first author is based in the US, the second author is based in the UK and the third author is Hong Kong, China. The authors have extensive experience in teaching strategic management to students from various countries and cultures. This text also provides online support material for tutors and students in the form of guidelines for instructors on how to best use the book, PowerPoint presentations, and case studies, plus additional exercises and Web links for students. We take this opportunity to thank all of our students who have greatly helped us to develop and refine this book. Our special thanks go to Stephen Taylor for his contribution to the first proposal of this book. We fully acknowledge his input in developing this book during the initial phase. Finally, we thank all of the scholars and researchers who contributed to the strategy literature in the hospitality and tourism field. Two of them deserve special acknowledgement: Professor Michael Olsen and Dr. Angela Roper. Dr. Roper was the main advisor of the first two authors’ Ph.D. work, and Professor Olsen was the main advisor of Dr. Chathoth’s Ph.D. work. We look forward to receiving your constructive comments to further enhance this book for future editions.

Dr. Fevzi Okumus

Dr. Levent Altinay

August 30, 2009 Orlando, Florida, United States

August 30, 2009 Oxford, United Kingdom

Dr. Prakash Chathoth August 30, 2009 Hong Kong, SAR China

PART 1

Introduction to Strategy Chapter 1 introduces the subject of this book and strategic management, and Chapter 2 introduces the subject’s application in the context of the international hospitality and tourism industry. The primary objectives of these two introductory chapters are to establish the importance and relevance of strategic management as an area of academic study and as a key executive practice for aspiring hospitality and tourism professionals.

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CHAPTER 1

Introduction to Strategic Management

Learning Objectives After reading this chapter, you should be able to: 1. Discuss the historical origins of strategic management. 2. Identify the schools of thought on strategic management. 3. Describe the strategic management framework and its objectives. 4. Define key terms pertaining to strategic management. 5. Assess various perspectives of strategic management and their significance.

CONTENTS Introduction Historical Origins of Strategy and Strategic Management Schools of Thought on Strategic Management Overall Aims of Strategic Management: Creating a Competitive Advantage Defining Key Terms The Book’s Approach and Structure Summary Study Questions References and Further Readings

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4 CHAPTER 1:

Introduction to Strategic Management

Opening Case The Great Eastern hotel, a privately owned, independent, five-star deluxe hotel located in Hong Kong’s commercial district, is faced with a turbulent external environment owing to the current financial crisis. Since its inception six years ago, the hotel has grown in prominence during the bustling economy from 2003 to 2007, and it has been one of the top performers in the upscale and luxury market segments over the four years preceding the economic crises. The hotel’s main target market segment is the business traveler (75 percent of room bookings) who has no problem with paying USD 350 per night for a room. During the past six months, however, the hotel has been a victim of the severe economic upheaval, which has led to a significant reduction in room bookings from the business travel segment. This has reduced profits significantly to the extent that the hotel is no longer able to cover fixed costs. The owner, Jerry Kong, has called an executive committee meeting to discuss the future direction the company should take in the immediate term and in the long term to sustain its competitive advantage. 1. What issues should Jerry and the executive committee address? Why? (Hint: Make assumptions where necessary, including mission and vision statements, as well as goals, strategies, and objectives.) 2. Given the preceding information, what are Jerry’s options? How should they be evaluated? Make assumptions where necessary. 3. What should the hotel do in the short term and in the long term? Make assumptions where necessary to arrive at your decisions. 4. Why is it difficult to answer the preceding questions? Do we have clear answers for issues and challenges in real life? 5. Do managers and executives in hospitality and tourism organizations always have sufficient and reliable information to make decisions?

INTRODUCTION This chapter introduces strategic management and provides an overview of the book’s structure and contents. In doing so, strategy is presented from a historical perspective from various lenses—including schools of thought— through which strategy has been conceptualized, researched, and developed over the past several decades. This chapter then discusses key definitions of the terms used in the strategic management literature, and various schools of thought in the field are described.

Historical Origins of Strategy and Strategic Management

HISTORICAL ORIGINS OF STRATEGY AND STRATEGIC MANAGEMENT Before we proceed any further, it is essential to define strategic management. Strategic management is a field of study that involves the process through which firms define their missions, visions, goals, and objectives, as well as craft and execute strategies at various levels of the firms’ hierarchies to create and sustain a competitive advantage. It helps organizations to prioritize what is important for them and provides a holistic view of an organization. It entails two distinct phases that deal with formation and implementation of strategy within an organizational setting. Figure 1.1 shows the strategic management framework/process, which is described in more detail later in this chapter and in Chapter 5. Historic origins of strategic management have been linked to the military. The word strategy comes from the Greek strategos, which means “general.” In literal terms, it means “leader of the army.” Military strategy deals with planning and execution in a war setting, while taking into consideration the strategy and tactics required to implement the plan. Outmaneuvering the enemy in a “chesslike” situation requires a wellthought-out plan with emphasis on the plan’s execution.

Mission, Vision, Goals and Objectives

Internal Analysis (Strengths & Weaknesses)

Strategic Analysis

Strategy Formation Corporate Level, Business Level, and Functional Level Strategies

Strategy Implementation

Strategy Control

FIGURE 1.1

The Strategic Management Framework.

External Analysis (Opportunities & Threats)

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Introduction to Strategic Management

The basis of strategic management can be linked to the works of Sun Tzu that date back to 400 B.C. and to Carl von Clausewitz in the eighteenth century. Sun Tzu’s reference to space, quantities, and other factors related is similar to the characteristics of the positioning school (Mintzberg, Ahlstrand, and Lampel, 1998). According to Sun Tzu, calculations underlie victorious situations in wars. Carl von Clausewitz’s considered strategy “a variation of themes” in war situations (Mintzberg et al., 1998). According to von Clausewitz, strategy was “open-ended and creative” in a situation of chaos and disorganization (Mintzberg et al., 1998). This makes a more systematic and organized approach essential, which is why planning became a part of the process. Strategy formation takes into consideration the various maneuvers and the scenarios and calculations pertaining to them. Being flexible while being proactive and deliberative, however, is essential. Literature during the twentieth century used these works to describe strategy in the corporate arena. Strategic management as a domain of study has evolved over the past 50 years. In the 1950s and 1960s, strategic management was viewed from a general management perspective, with emphasis on the role of the leader. As a result, the focus was on leadership, interpersonal relationships, and the systems, processes, and structures in an organization. Firms used the topdown approach, with the top management at the core of the decision-making process. The strategic management process was not formalized and explicit during this phase; instead, it was more implicit and informal. During the late 1960s, the 1970s, and the early 1980s, firms adopted the strategic planning approach with an emphasis on analysis and formalized planning, with special teams assigned to develop plans. The typologies and concepts related to business and corporate strategies, with strategy formulation at the core of such conceptualizations, led to the evolution of the domain during this period. In the 1980s, scholars emphasised more on strategy implementation as a process. There was a shift in emphasis from the leader to the development of organizational culture and its role in defining and implementing strategies. Also, as globalization began to capture the imagination of firms’ executives, researchers provided more insight into the underlying concepts of globalization, including systems, processes, and structure that enabled firms to grow into a multidivisional corporation. Some scholars focused on firms’ competencies to explain strategy, which led to the emergence of the resource-based view of the firm. In the hospitality and tourism domains, strategic management emerged as a field of study in the mid- to late 1980s that aimed at applying the works of scholars in the strategic management domain to

Schools of Thought on Strategic Management

hospitality organizations. Most of these efforts aimed at confirming theories related to the contingency, strategic planning, and competitive strategies. In the 1990s, globalization led to the emergence of network strategies, and strategic alliances became the focal point around which researchers developed the literature. More efforts from a resource-based perspective led to the conceptualization of characteristics related to the firm’s internal competencies that enabled them to sustain competitive advantage. The shift toward internal competencies also saw a shift in perspective toward the knowledge-based view and learning at the core of strategic competitive advantage in the late 1990s. Progress continues using the knowledge perspective from the 2000s, with increased emphasis on corporate social responsibility. In the hospitality and tourism domains, Olsen, West, and Tse (2006) conceptually developed the coalignment concept, which has been used as a theoretical framework in other studies in the field. Efforts by Harrington (2001), Okumus (2004), and Jogaratnam and Law (2006) in the 2000s focused on environmental scanning in the hospitality industry context, whereas Harrington and Kendall (2006), Okumus and Roper (1999), and Okumus (2002), as well as others, have made attempts to develop the strategy implementation framework for hospitality and tourism firms during this period. More recent efforts in the field have moved toward a knowledgebased view and corporate social responsibility. Chapter 2 discusses in more detail the state of strategic management literature in the hospitality field.

SCHOOLS OF THOUGHT ON STRATEGIC MANAGEMENT From a historical perspective, many schools of thought have emerged in the strategic management domain. Mintzberg and colleagues (1998) described the domain as consisting of ten schools/perspectives (Table 1.1) that pertain to design, planning, positioning, entrepreneurial, cognitive, learning, power, cultural, environmental, and configuration. As Mintzberg and his colleagues explain, the first three schools are more prescriptive, with an emphasis on strategy formulation that developed from the 1960s to the 1980s. The next six schools are less prescriptive, while emphasizing how strategies are developed. The tenth school conceptually combines and captures the other nine schools into an integrative whole. Each school is described briefly in this section. The design school purports a fit between an organization’s internal capabilities and external opportunities. This school emphasises the importance of a firm’s position within the context in which it operates. The environment is used as a reference while gauging the firm’s strategies, and

7

Table 1.1

Key Concept

Schools of Thought on Strategy

Design School

Planning School

Positioning School Entrepreneurial School

Cognitive School

Learning School

Power School

Cultural School

Environment School

Configuration School

Fit between

Structured step-by-

Strategy as a

Decision maker’s

Learning as the

Power and politics

Strategy formation

The decision

Strategy as

step, top-down

formal and

entrepreneur as

cognition and

foundation for

drive this school

as comprising

maker’s role is

capabilities and

approach

controlled

the focal point of

mind drive

strategy

of thought

social

one of a

process

organizational

strategy making

formation

interaction

boundary

external opportunities Focus on

Leader or

organizational

strategy making

Firm’s position in Mission, vision,

Strategy types and

The leader’s

transformational

spanner Managerial

Organizational

Firms vying for

Resources and

Environment

Transformational

the market

goals, and

positioning

“intuition,

capabilities in

capabilities are

position; engage

capabilities are

characteristics

leadership,

context

strategies

strategies

judgment,

strategy

at the core of

in power plays,

the sources of

impact strategy

which forms the

wisdom, and

formation and

competitive

ploys, and

competitive

formation

essence of

experience” with

implementation

advantage

tactics to

advantage

the overall aim

maneuver in

of creating a

various contexts

strategy

market niche Approach

The environment Planning hierarchies

Strategy formation

Deliberate in

Cognitive skills of

Learning

Strategy formation

Strategy is

is deliberate and

strategy making,

managers

influences

is more

strategy

evaluation,

definitive

yet adaptive to

influence

deliberative

emergent

formulation is

operationalization,

environment

perceptions of

strategy, giving

are part of the

more

execution, and

changes

environment

rise to a more

process

deliberative

control

process

Source: Developed from Mintzberg et al., 1998.

as reactive

Bottom-up change

along with

emergent

deliberate

Strategy formation

as a reference;

and top-bottom transformation

Schools of Thought on Strategic Management

the emphasis is on how it develops its structure in order to support the strategy. Strategy creation and implementation were considered two distinct stages in the strategic management process. The second school, planning, which developed in the 1970s, conceptualized strategy to include a structured, step-by-step approach. Mission and vision statements were set, and goals were clearly spelled out while detailing the objectives that would lead to the accomplishments of those goals. Note that goals and strategies were clearly differentiated under this approach. An environment assessment included forecasts and scenario analysis. The strengths, weaknesses, opportunities, and threats (SWOT) analysis was part of this process, and it gave the firm an overview of the various factors it had to deal with in a given context. The firm’s internal and external environment-related factors are important to consider in order to assess the firm’s position within a given market. The strategy process includes planning hierarchies along with evaluation, operationalization, execution, and control. The planning hierarchies per Mintzberg and his colleagues include budget hierarchies, objectives hierarchies, strategies hierarchies, and program hierarchies. These hierarchies are detailed within the corporate, business, functional, and operational levels. This school highlights planning as a formal process driven by the top management team of firms led by the CEO, and strategies appear as a result of this process. The third school is positioning, which developed in the 1980s. Although it is not very different from the planning and design schools, it views strategy formation as consisting of a few strategy types. This school emerged from the work of Porter (1980), with an emphasis on strategy typologies. Strategy was still conceptualized as a formal and controlled process, but the focus here was on competitive strategies and industry structure. As the term suggests, generic strategies were applicable to firms within and across industries. Mintzberg and his colleagues describe the emergence of the positioning school as part of “three waves”: “the military writings, the consulting imperatives of the 1970s, and the recent work on empirical propositions, especially of the 1980s.” Notably, the works of Sun Tzu and von Clausewitz have influenced the emergence of this school, along with the BCG matrix for portfolio analysis developed in the 1960s, followed by the writings of Porter (1979, 1980, 1985) pertaining to competitive analysis (five forces model); generic strategies (cost leadership, differentiation, and focus); and value chain. The fourth school is the entrepreneurial school, which pertains to decision making and the process of strategy formation. Here, the central role of strategy formation lies with the leader, whose “intuition, judgement, wisdom, experience and insight” are at the heart of decision making. Source: Mintzberg, H., Ahlstrand, B., Lampel, J. (1998; p. 124) The leader’s vision and his or her leadership style influence the organization’s strategic posture.

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Strategy is conceptualized by the leader based on his or her intuition and wisdom rather than based on a calculated plan. Mintzberg and his colleagues describe this school as both “deliberate” and “emergent,” thereby emphasizing the leader’s experience, while at the same time being adaptive to the changing environment of the business. Joseph Schumpeter was one of the early proponents of entrepreneurial orientation, and he described the entrepreneur as being at the crux of business innovation and idea formation. The entrepreneur provides the capital and impetus to start and grow the business into prominence. The entrepreneur’s ability to search for new opportunities while providing his or her personal insights into how to best move the business forward through intuitive thinking is at the heart of the firm’s ability to progress. The philosophy and approach in organizations that live and die by the entrepreneurial spirit are top-down, with the leader having the power to decide the course the organization takes while implementation the strategy. It should be noted that organizations that have an entrepreneurial orientation tend to occupy a niche position. The cognitive school is the fifth school, and it emphasizes strategy formation from the perspective that the decision maker’s cognition and mind drive strategy making. The cognitive skills of managers influence their perspectives of how they perceive the environment. These perspectives in turn influence the strategy formation process. According to Mintzberg and his colleagues, they include “concepts, maps, schemas, and frames.” This school is still emerging in terms of philosophy and contributions to the field. The sixth school is learning, which supports the notion that strategy making is based on a foundation of learning. The strategy maker is constantly learning about the process of strategy formation and its various elements in a complex environment. In fact, the firm is learning constantly as a whole, which is incremental and continuous in a complex business environment. The knowledge perspective is part of the learning school, and the focus here is on the system as a whole rather than only a few managers at the helm of decision making. Organizational capabilities and competencies become the core of sustainable competitive advantage. Given this perspective, it is not easy to distinguish between strategy formulation and implementation. It should be noted that learning is constantly taking place, and it influences the deliberative strategy formulation process, giving rise to a more emergent formulation process. While describing the learning school, Mintzberg and his colleagues state that “strategy appears first as patterns out of the past, only later, perhaps, as plans for the future, and ultimately, as perspectives to guide overall behavior.”

Schools of Thought on Strategic Management

The seventh school views strategy formation from a power perspective, with negotiation at the crux of the process. Power and politics drive this school of thought, with organizations vying for position in markets and transactions. Macro and micro power perspectives draw attention to transactional-level power and market-level power, respectively. Strategy formation is more emergent as firms engage in power plays, ploys, and tactics to maneuver in various contexts. The eighth school is the cultural school, where, again, the emphasis is on the organization as a collective whole and strategy formation as comprising social interaction. Strategy is deliberate in that the members are engaged in the process that involves collective action. Resources and capabilities are the sources of competitive advantage, as firms are able to create a culture that brings forth unique decision making with a resistance toward organizational change. The ninth school pertains to the environment while describing strategy formation as reactive. The firm’s external environment influences the strategy formulation and implementation processes, and firms are viewed as being part of an environment that is simple or complex, stable or dynamic. The decision maker’s role is one of a boundary spanner in being able to scan the environment while identifying the macro and micro level forces that impact the firm’s position within a given business domain. The population ecology perspective describes firms as belonging to a given cluster in terms of their characteristics (resources and capabilities) and how they are able to adapt within a given environmental context. The tenth school is the configuration school, which views strategy as transformational. Configuration refers to the structure that a firm adopts in a given environmental context, and transformation refers to a change in configuration based on a change in context. The life cycle of organization is essentially a pattern that emerges from the various configurations and transformations that occur over the various periods of change that organizations go through. The essence of strategy formation is to ensure that firms are able to recognize the need to change its configuration while transforming from one state to the other during its productive life. Structure follows strategy and strategy follows structure are two views of the strategy formation process that are related to this school. In fact, this school is actually a compendium of all other schools put together. Transformational leadership forms the essence of strategy, and bottom-up change and top-bottom transformation are part of the process. Mintzberg and his colleagues state that “resulting strategies take the form of plan or patterns, positions or perspectives, or else ploys, but again, each for its own time and matched to its own situation.”

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OVERALL AIMS OF STRATEGIC MANAGEMENT: CREATING A COMPETITIVE ADVANTAGE A firm is in business to create value for its stakeholders. Since value is created if firms have a competitive edge over their market rivals, it is imperative that a definitive and formalized approach that falls within the realm of strategic management is at the core of the process. Relying on luck and intuition may not be the best way to sustain an advantage in the firm’s market domain. Creating a competitive advantage, and subsequently sustaining it over a period of time, requires a formal approach in terms of strategy formation and implementation. The firm should engage in constant evaluation of its market position, including benchmarking, that enables it to develop a strategic perspective to the value creation process. Since factors in the firm’s external and internal environments are constantly changing, the complexity and variability associated with creating and sustaining competitive advantage are high. This is why firms such as IBM, Microsoft, Hilton Hotels Corp and McDonald’s have all been through ups and downs during the course of their organizational histories in terms of sustaining competitive advantage in their respective market domains. If companies plan to constantly scan the environment to detect any changes in their external environment and be able to formulate strategies at the corporate, business, and functional levels, they must engage in the strategic management process. Moreover, emphasis must be given to implementing strategies (which is even more complex), including creating strategic control systems that help to evaluate the gap between formulated and implemented strategies. 1. At the corporate level, strategy is about asking questions about what business the firm is in or would like to be in, the firm’s potential to create value by being in the business or expanding into a new line of business, and the resources and capabilities the firm already has or needs to get to sustain/create competitive advantage in its business or businesses. 2. At the business level, firms need to ask themselves the following questions: How can we create competitive advantage in our productmarket domains in each strategic business unit (SBU)? How can we continue to be an overall cost leader or a broad differentiator, or, for that matter, have a cost focus or be a focused differentiator in our market domain? Note that SBU is defined as a unit within a given corporate identity that is distinctly different from other units within the

Defining Key Terms

corporation in terms of products and services, as well as the markets it serves with a distinct profit-making capability of its own. 3. At the functional level, the firm’s objective is to sustain its advantage by focusing on efficiencies related to production, operations, administration, marketing, and other support functions. It also engages in constant innovation to ensure new product/service development rollout, while ensuring that the service and product qualities, as well as the customer satisfaction related to them, are at the highest level. Note that the linkage among the three levels of strategy leads to the creation of sustainable competitive advantage. The various concepts introduced in this chapter and many other related ones are presented and discussed in detail throughout this book.

DEFINING KEY TERMS Strategy entails futuristic thinking and developing a course of action to meet goals and objectives (more on this in Chapter 5). The strategic management framework (see Figure 1.1) captures the process sequentially and definitively. It should be noted that although we present different elements of the strategic management framework separately or in a linear step-by-step process, in fact they overlap and go hand in hand. The framework includes mission and vision statements, goals, and objectives that are linked to the mission and vision, as well as strategies and tactics to achieve the goals and objectives. Strategic analysis provides the firm with a clear picture of its situation, which includes internal and external analysis. Internal analysis pertains to strengths and weaknesses analysis, whereas external analysis pertains to opportunities and threats analysis, which is also referred to as SWOT analysis. The analysis enables a firm to engage in strategic decision making. Strategic decisions pertain to choosing an alternative among a set of alternatives that leads to strategy-related success. These decisions have an effect on the firm’s long-term orientation and direction. Strategic management includes two distinct phases: the strategy formation phase and the strategy implementation phase. Strategic formation is the process of defining the direction of the firm’s futuristic course of action, which would enable the firm to allocate resources in order to achieve the set goals and objectives. An internal and external environment analysis is part of the assessment before strategy is formulated at the corporate, business, and functional levels. On the other hand, strategy implementation is the process

13

14 CHAPTER 1:

Introduction to Strategic Management

of putting strategy into action, which includes designing the organizational structure and related systems. This process leads to effective resource allocation processes, including programs and activities such as setting budgets, developing support systems, recruiting, hiring, and training, as well as designing performance evaluation and rewards systems that lead to the attainment of set goals and objectives. The organization must first define its mission, goals, and objectives. The mission is a brief description of the very purpose of creating the organization. The mission statement includes a clear purpose and states why the organization is in existence. For example, the following is the corporate mission statement for Four Seasons Hotels and Resorts (fourseasons.com): Four Seasons is dedicated to perfecting the travel experience through continual innovation and the highest standards of hospitality. From elegant surroundings of the finest quality, to caring, highly personalised 24-hour service, Four Seasons embodies a true home away from home for those who know and appreciate the best. The deeply instilled Four Seasons culture is personified by its employees – people who share a single focus and are inspired to offer great service. The vision, however, describes where the organization wants to go from where it is at present. For instance, Hilton Hotels Corporation defines its vision as “Our vision is to be the first choice of the world’s travelers.” Goals are more specific in terms of what the organization aims to achieve in a definite period of time so it would be able to accomplish its mission and vision. Goals are planned over the short and long terms. Short-term goals are set for a period not exceeding one year, whereas long-term goals are set for a period of time exceeding three to five years. This very much depends on the characteristics of the business. Goals need to be linked to objectives. Note that goals are more abstract than objectives. Objectives need to be definite and quantifiable, strategies clearly identify how the objectives will be met in terms of the plan, and tactics are the actions that operationalize the strategy—those that lead to the attainment of goals and objectives. For instance, in a game of chess, a tactic may be employed to corner the opponent’s rook by making a series of moves. Another set of tactics could be geared toward weakening the queen. These tactics in combination may be part of the strategy to gain an advantage, which ultimately would lead to winning the game. Note that tactical decisions, which can be immediate or very short term in terms of scope, impact the implementation process at the functional/operating level. To differentiate missions, goals, objectives, strategies, and tactics, let’s consider this case: The King Hotel is in business with a mission to create value for its stockholders. To accomplish the mission, the firm has set goals

The Book’s Approach and Structure 15

for the current year of increasing the business segment productivity. The objectives that are linked to the goals include increasing the business segment revenues by 10 percent and increasing repeat clientele for this segment by 15 percent. The strategies include marketing and operations-related plans and tactics, including increasing sales calls in the business district of the city, increasing promotional campaigns for the international and domestic business markets, and creating an amenities package for business travelers that includes free airport transfers, a free welcome drink on arrival, free Internet access in the room, and free use of business centre secretarial services for three hours a day. Note that the goals are linked to the mission, the objectives are linked to the goals, the strategies are linked to the objectives, and the tactics are linked to the strategies.

EXERCISE Choose an H&T organization and research this company’s vision, mission, goals, and objectives. Critically evaluate and compare them with those of other H&T companies. What are the similarities and differences? Which aspects do you like in these statements and why?

THE BOOK’S APPROACH AND STRUCTURE This book consists of four parts. The first part consists of Chapter 1, which introduces the topic of this book and strategic management, and Chapter 2, which discusses the application of strategic management in the context of the international hospitality and tourism industry. In particular, Chapter 1 opens the scene by providing a brief discussion on the historical origins of strategy, the writings of classic authors, the industrial organization model, and the resource-based view. It further discusses assumptions of dominant strategic management approaches. Based on these discussions, key terms such as strategy and strategic management are introduced. Chapter 2 is devoted to examining and applying strategic management in the hospitality and tourism contexts. It provides a brief review of the current level of strategy literature in the hospitality and tourism field and illustrate its limitations. This chapter also discusses why tourism and hospitality organizations need strategy and strategic management and whether and how generic strategy models and theories can be applied in tourism and hospitality organizations. The primary objectives of the two introductory chapters are to establish the importance and relevance of strategic

16 CHAPTER 1:

Introduction to Strategic Management

management as an area of academic study and as a key executive practice for aspiring hospitality and tourism professionals. The second part of the book establishes the key dimensions of the external and internal contexts in which both the strategy content and the?strategy process are embedded. The specific dynamics and nature of the hospitality and tourism industry and organizations are emphasised throughout. In particular, Chapter 3 concentrates on exploring approaches to the analysis of the external environment that is confronting hospitality and tourism organizations. The relevant theories, models, and frameworks pertaining to the process?of external analysis are introduced and explored in the specific context of hospitality and tourism. Chapter 4 discusses the importance of the organization’s internal environment as an influence on strategy formation and implementation. The importance of organization structure, culture, and leadership as key considerations is highlighted and discussed in the context of the international hospitality and tourism industry. The third part of the book is devoted to exploring the varying levels of strategy content—the so-called “what” of strategy. Three levels of strategy content are explored that, although ultimately linked, can be viewed as separate areas of strategic management decision making. The importance of context as an influence on strategy content is highlighted throughout the three chapters in this section. Chapter 5 is concerned with exploring the issue of competitive strategy at the level of the strategic business unit (SBU). Particular emphasis is given to exploring the concept of generic strategies as the basis for creating superior value and ultimately a sustainable competitive advantage. Chapter 6 explores the potential roles of the corporate centre and its relationship with SBUs. The core tension between coordination and responsiveness is highlighted and discussed. Chapter 7 is concerned with the issue of the interbusiness or network level of strategy content. The central question explored here is the extent to which organizations should seek to develop cooperative arrangements when developing strategies. The fourth part provides discussions about the strategy process and contains two chapters that cover entitled strategy formation and strategy implementation. Chapters 8 and 9 do not constitute entirely separate subjects. In other words, they are not phases or stages that can be looked at and understood in isolation. They are strongly linked and greatly overlapping. They have been selected because debates on these issues have been raging for years. Chapter 8 discusses how strategy development and implementation is viewed in different schools of thought. It critically evaluates each view’s assumptions and suggestions and provides some recommendations for tourism and hospitality organizations as they engage in their strategy formation process. Chapter 9 is devoted to explaining how strategies (or strategic decisions)

Study Questions

can be implemented and how changes can be managed. A number of implementation factors are identified, and the role and importance of each are discussed. Chapter 9 also evaluates the magnitude and pace of strategic change. Discussions are also provided on potential barriers and resistance to strategy implementation and how they can be overcome. Part 5 contains only one chapter. This final chapter seeks to integrate the key themes explored in earlier chapters in an effort to provide readers with the holistic perspective that is inherent in effective strategic management practice. The final part of the text consists of case studies. Two cases deal with the strategy content, and two cases deal specifically with the strategy process. The fifth case study is integrative in nature and is relevant to the book as a whole. Strategy context issues are reflected in all five cases.

SUMMARY This chapter introduces strategic management, while providing an overview of how the field has evolved from a historical perspective. Given the complexity associated with managing firms, schools of thought on strategic management have comprehensively covered the various approaches to managing the firm from a strategic perspective while highlighting their relevance and significance. Definitions of key terms used in the field, such as mission, vision, strategy, goals and objectives, were discussed to explain how the strategic management framework can be used effectively. The chapter also provides a description of how this book could be used to develop a good understanding and appreciation of strategic management in hospitality and tourism.

STUDY QUESTIONS 1. Explain the origins of strategy and strategic management. 2. List the main schools of thought, and explain their premises on strategic management. 3. Why are there different schools of thought on strategic management? Do you think it is confusing to have several different views on strategic management? 4. Define strategic management, vision, mission, goals, objectives, and tactics. 5. Do you think it is important for H&T companies to have such statements? If yes, why? If no, why not?

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Introduction to Strategic Management

REFERENCES AND FURTHER READINGS Harrington, R. (2001). Environmental uncertainty within the hospitality industry: Exploring the measure of dynamism and complexity between restaurant segments. Journal of Hospitality and Tourism Research, 25(4), 386–398. Harrington, R. and Kendall, K. (2006). Strategy implementation success: The moderating effects of size and environmental complexity and the mediating effects of involvement. Journal of Hospitality and Tourism Research, 30(2), 207–230. Jogaratnam, G. and Law, R. (2006). Environmental scanning and information source utilization: Exploring the behaviour of Hong Kong hotel and tourism executives. Journal of Hospitality and Tourism Research, 30(2), 170–190. Mintzberg, Henry, Ahlstrand, B. W., and Lampel, J. (1998). Strategy safari: A guided tour through the wilds of strategic management, New York: The Free Press. Okumus, F. (2002). Can hospitality researchers contribute to the strategic management literature? International Journal of Hospitality Management, 21, 105–110. Okumus, F. (2004). Potential challenges of employing a formal environmental scanning approach in hospitality organizations. International Journal of Hospitality Management, 23, 123–143. Okumus, F. and Roper, A. (1999). A review of disparate approaches to strategy implementation in hospitality firms. Journal of Hospitality and Tourism Research, 23(1), 21–39. Olsen, M.D. (2004). Literature in strategic management in the hospitality industry. International Journal of Hospitality Management, 23, 411–424. Olsen, M.D., West, J., and Tse, E (2006). Strategic Management in the Hospitality Industry, 3rd edition. Prentice Hall, New York. Porter, M.E. (1979). How competitive forces shape strategy. Harvard Business Review, March/April 1979. Porter, M.E. (1980). Competitive Strategy. New York: The Free Press. Porter, M.E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: The Free Press. Roper, A. and Olsen, M.D. (1999). Research in strategic management in the hospitality industry. International Journal of Hospitality Management, 17, 111–124.

CHAPTER 2

Strategic Management in Hospitality and Tourism

Learning objectives

CONTENTS

After reading this chapter, you should be able to:

Introduction

1. Define the hospitality and tourism (H&T) context.

Defining the Hospitality and Tourism Context

2. Evaluate characteristics and types of H&T organizations. 3. Discuss how characteristics of H&T organizations may influence the application of strategic management practices in H&T organizations. 4. Evaluate the current level of strategy research in the H&T field.

Types of Hospitality and Tourism Organizations Characteristics of Hospitality and Tourism Organizations The Case for Strategic Management in H&T Organizations Applying Strategic Management in the H&T Context Strategy Research in the Hospitality and Tourism Field Summary Study Questions Small Case Study References and Further Readings

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20 CHAPTER 2: Strategic Management in Hospitality and Tourism

Opening Case Mark Bright has been working as an assistant manager in an ice cream factory. During his last annual review, he was told that he would be promoted to the general manager position at another factory within two years. Although he has been happy with his salary, benefits, and the working environment, recently he has started to think about a career change. He finds his current job very routine and not stimulating enough. He does not like routine paperwork and long meetings. He considers himself a people person, since he likes to help people and he enjoys interacting with others. Thanks to a close friend’s recommendation, a restaurant chain has offered Mark a managerial position in Orlando, Florida. He will make 30 percent more and receive a better benefits package. Before starting this position, Mark must work as an assistant manager in the Miami branch of the restaurant for six months. During this time, he will also attend some training workshops at a college in Miami. The regional human resources management director will also work with him closely to better prepare him for the position. After he starts his new job in Orlando, the company will subsidize his tuition for a master’s degree at a very prestigious hospitality college in Orlando. 1. Do you think Mark should accept this offer? Explain why or why not. 2. If he accepts this position, what type of skills will Mark need in managing a restaurant compared to being a manager in an ice cream factory? 3. In your view, what are the differences in managing a restaurant compared to managing an ice cream factory?

INTRODUCTION In Chapter 1, we introduced the topic of strategic management, with discussions on the historical origins of strategy and the writings of classic authors. We also discussed the dominant strategic management schools of thought. We believe that the first chapter is particularly important for the reader in terms of providing a foundation for discussions and debates in the following chapters. In this chapter, we define the H&T context and evaluate characteristics and types of H&T organizations. We then question how these characteristics may impact on strategic management practices in H&T organizations. Next, we discuss how generic strategic management models and theories can best be applied in the H&T context. Finally, we provide a brief review of the current status of strategic management literature in the H&T field.

DEFINING THE HOSPITALITY AND TOURISM CONTEXT Services are becoming increasingly an important part of the global economy. It is estimated that on average 70 percent of the gross domestic product

Defining the Hospitality and Tourism Context

(GDP) of the Organization for Economic Co-Operation and Development (OECD) (2007) countries come from service industries. Moreover, it is predicted that the importance of services will continue to increase worldwide not only in the developed parts of the world but also in developing countries. Certainly H&T is an important sector in services particularly in the developed countries. Under the services sector, the H&T industry is often named as the number one industry worldwide in terms of generation of income and employment. Over the last three decades, the H&T industry has grown rapidly, and now it has become one of the most prominent sectors of the service industry. It produces over 11 percent of the world’s gross domestic product and employs over 10 percent of the global workforce (UNWTO, 2003). In 2006, international tourism arrivals worldwide achieved an all-time record of 842 million tourists. In the same year, tourism receipts, including international passenger transport, were estimated about $883 billion, which means that international tourism generated over $2.4 billion a day in 2006 (UNWTO, 2007). As an export category, the tourism industry ranks fourth after fuels, chemicals, and automotive products (UNWTO, 2007). Despite the presence of terrorism, natural disasters, health scares, fluctuations in exchange rates, and uncertainties in economic and political arenas, the H&T industry has experienced positive growth for the last two decades. This growth has not only been observed in developed parts of the world but also in developing parts of the world such as Africa, Asia, and the Middle East. It is predicted that the H&T industry will continue growing rapidly worldwide. Following economic, sociocultural trends and developments, more people will be participating both in domestic and international tourism. In meeting this growing demand, many new H&T businesses will be opened, new tourism destinations will emerge, and new tourism services and products will be introduced. Although it is one of the largest industries worldwide, providing a concise definition for the H&T industry has been a major challenge for professionals and academics. As often acknowledged, there continues to be a lack of agreement as to exactly what hospitality and tourism encompasses and the relationship between them. According to Nykiel (2005), definitions of the H&T industry are often limited by the unique viewpoints of sectors within the industry. For example, a hotel operator may see the industry as accommodations with food and beverages. A food and beverage operator may view the industry as a dining experience with the focus on menu offerings and food service. A travel agency manager might believe that providing travelrelated services to people for business and leisure defines the industry best. An executive of a theme park may see hospitality as providing a unique

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22 CHAPTER 2: Strategic Management in Hospitality and Tourism

entertainment and educational experience. In order to overcome this confusion, Nykiel (2005) placed all of these viewpoints under a wider perspective called “hospitality” and further stated that the hospitality industry encompasses travel, accommodations, food service, clubs, gaming, attractions, entertainment, and recreation. Kandampully (2007) notes that hospitality organizations operate within a network of service organizations. To a large extent, they are interrelated and interdependent, and include the following: &

Tour operators, travel agents, and tourism organizations

&

Travel and transport operators

&

Leisure, recreation, and entertainment venue

&

Restaurants, bars, clubs, and cafes

&

Hotels, resorts, motels, camping grounds, bed & breakfast (B&B) establishments, and hostels

Butler and Jones (2001) use tourism as an all-encompassing term that covers all aspects of people being away from their home and hospitality as a specific part of providing accommodations and meals for tourists. They note that the one difficulty in their definitions is that the hospitality industry also serves many people who are not tourists, such as local residents. They state that tourism is often interpreted as the flow of visitors from one country to another for more than 24 hours of time and less than one year. In this book, to get a broader view and include all of the different types and sizes of organizations in the field, we use the terms hospitality and tourism interchangeably. Thus, these terms encompass travel, accommodations, food services, clubs, gaming, theme parks, attractions, entertainment, recreation, conventions, and nonprofit tourism organizations such as national tourism offices, destination management, and marketing offices. It is clear that the H&T industry is a composite of a number of distinct industries that are closely interrelated and interdependent. These industries operate within a global network. The following section will provide more explanation and discussions about different types of H&T organizations.

TYPES OF HOSPITALITY AND TOURISM ORGANIZATIONS Organizations that operate in the H&T industry can be grouped under different categories depending on their primary activities, size, profit

Types of Hospitality and Tourism Organizations

motives, and geographical coverage. In terms of their primary services, organizations can be categorized as follows: 1. Travel and transport 2. Accommodations (lodging) 3. Food and beverages 4. Entertainment and recreation 5. Tourism offices or destination management organizations 6. Nongovernmental tourism organizations Each of these is often identified as a subsector under the H&T industry. In addition, each can be further broken into several subgroupings. For example, under accommodations, there are hotels, motels, guest houses, hostels, villas, and time-shares. Some of these organizations can be further grouped depending on their service level, such as luxury hotels, boutique hotels, midmarket hotels, and budget hotels, or according to their star ratings, such as five-star (diamond), four-star, and three-star hotels. A further grouping of the H&T organizations can be made based on their size such as small, medium, and large. Independent and flexible small and medium-sized enterprises (SMEs) dominate the tourism market worldwide. An SME is defined in employment terms as a company with a workforce of fewer than 250 employees (European Commission, 2002; Wanhill, 2000). For example, it is reported that around more than 90 percent of tourism and hospitality organizations in Europe are SMEs (Bastakis, Buhalis, and Butler, 2004; European Commission, 2002, Wanhill, 2000) which are usually ownermanaged, being run either by an individual or by small groups of people. Managing SMEs is different from managing larger enterprises. For example, Quinn, Larmour, and McQuillan (1992) state that smaller hotels are not simply smaller versions of large hotel groups. They have distinct organizational structures and cultures that are often influenced by their owners. The business objectives of smaller hotels may have a different emphases compared to large hotel groups. According to Quinn and colleagues (1992), profitability, market share, and productivity are less important to small businesses. In addition, they may have less desire to expand and achieve high profitability and productivity ratios. Their views on the external environment, long-term strategies, generic positions, competitive advantages, and allocations of financial and human resources may not be similar to those of large organizations. We know that many SMEs face financial and managerial

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24 CHAPTER 2: Strategic Management in Hospitality and Tourism

challenges (Hwang and Lockwood, 2006), and their ratio of business failures is higher compared to larger organizations (Wanhill, 2000). Another classification of H&T organizations can be made according to profit motive. A high majority of H&T organizations aim to make a profit and achieve some financial objectives in order to satisfy their owners and shareholders. On the other hand, nongovernmental tourism organizations, associations, tourism destination management, and marketing organizations can be placed under nonprofit tourism organizations. Their primary aim is often not to make profit but to achieve other nonfinancial objectives, such as serving society, protecting the environment, and achieving sustainable tourism development in their regions over the long term. The United Nations World Tourism Organization (WTO) and Visitor and Convention Bureaus (CVBs) are examples of nonprofit tourism organizations. Finally, H&T organizations can be further grouped based on their geographical coverage. These include local, regional, and global firms. Local organizations operate in only one city or country, whereas regional organizations operate in only a geographical region such as Europe, the Middle East, or North America. For example, the Hong Kong–based Shangri La Hotel chain is a good example of a regional hospitality firm that is found only in the Pacific-Asia rim. Finally, global hospitality and tourism firms such as Intercontinental Hotels, Marriott Hotels, Hilton, McDonald’s, and KFC are examples of those that operate in many countries and almost all continents worldwide. Compared to national organizations, regional and global H&T organizations face more complex, dynamic, and challenging external and internal environments. Consequently, they must accommodate the impact of an international context when tackling strategic analysis, strategic choice, implementation, strategic control, and global competitive advantage. The preceding categories of H&T organizations show the diverse nature of the industry. Certainly, some of the firms can be placed under multiple groupings. What is important, however, is that, depending on their functional area, size, profit, and nonprofit motives and geographical coverage, the internal and operational environments, level of competition, barriers to entry and exit, and substitutes and resource requirements may vary. This will be discussed in more depth in Chapter 3. In addition, depending on the functional area, size, profit, and nonprofit motives and geographical coverage, organizational culture, structure, cost structure, competitive strategies, resource levels, and entry and exit barriers can be different for each company. Certainly, these differences require their managers to better understand the unique features of these organizations.

Characteristics of Hospitality and Tourism Organizations 25

Chapter 4 will examine in more depth the internal characteristics of various H&T organizations. As just stated, there can be major differences among hospitality and tourism organizations in terms of their primary activities, size, profit motives, and geographical coverage. These differences can have important implications on the application of strategic management theories and models that are in practice. In addition, one may further claim that because of these differences, we should be cautious about making generalizations about hospitality and tourism organizations. On the other hand, it is often claimed that although different services are offered in H&T organizations, each organization has its own unique characteristics that demand closer inspection when managing H&T organizations. The following section explains and evaluates the unique characteristics of each segment in the H&T industry.

DISCUSSION QUESTION Based on what we have discussed so far, can we make generalizations about the hospitality and tourism industry?

CHARACTERISTICS OF HOSPITALITY AND TOURISM ORGANIZATIONS Essentially, service sector organizations, including the H&T organizations, possess certain unique features. Ignoring the differences between service organizations and manufacturing organizations can lead to unexpected outcomes. The following are some closely related, unique characteristics of H&T organizations (Fitzsimmons and Fitzsimmons, 2004; Gronoos, 2007; Kandampully, 2007): 1. Inseparability—customer participation in the service process 2. Simultaneity 3. Perishability 4. Intangibility (the tangible–intangible continuum) 5. Heterogeneity 6. Cost structure 7. Labor intensive

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Inseparability In H&T organizations, customers need to be present and participate in the service delivery process. This is certainly not common in manufacturing industries. This means that the separation of the production and marketing functions, which are important characteristics of the traditional manufacturing industry, is not possible in the service delivery process that is found in H&T organizations. Therefore, H&T organizations must communicate with and motivate their customers to actively participate in the service delivery process. Attracting and bringing customers to H&T organizations require careful attention to their location, brand image, and ongoing marketing and promotional activities. In addition, the presence of customers and the requirement for them to play an active role in the service delivery process necessitate ongoing careful attention to behavior, the physical appearance of employees, the interior design and decoration of facilities, furnishings, layout, and noise. This means that like Fitzsimmons and Fitzsimmons’s (2004) comments on managing service organizations, operations, marketing and HRM functions in H&T, organizations need to be very closely integrated. Compared to manufacturing firms, this certainly requires that a different managerial approach, organizational structure, and culture must be developed and maintained in H&T organizations.

Simultaneity A typical manufactured good, such as a refrigerator or a television, can be inspected before it is delivered to retail outlets, where they are then sold to customers. However, services in H&T organizations are created and consumed simultaneously, which can prevent employing active quality control mechanisms. In addition, as just noted, customers and employees need to participate and coordinate in the service delivery process. It is almost impossible to have one manager for every employee to monitor the service delivery process and make sure that frontline employees are doing their jobs well, in addition to guiding the customers’ participation in the process. Therefore, in order to make sure that services are produced and offered to customers at an expected quality that meets consistent standards, H&T organizations should rely on other measures such as investing in human resources, use of technology, building desired physical facilities, and decoration to ensure the quality of services delivered. This has implications on decision-making practices, resource allocations, operations, marketing, and human resource management practices.

Characteristics of Hospitality and Tourism Organizations 27

Perishability As production and consumption in H&T organizations are simultaneous, services become perishable if they are not sold. Subsequently, their value is lost forever. For example, an airline seat or a hotel room will perish if a customer does not purchase it at the time of production. Therefore, the full utilization of service capacity is a strategic task for many H&T organizations. It is particularly important to emphasize that demand for an H&T organization’s services often fluctuates considerably, depending on the external developments and changes, such as seasonality and crises. For instance, terrorist attacks (such as September 11, 2001 in New York), disease outbreaks (such as SARS in the Far East), and natural weather phenomena (such as tornadoes or hurricanes) all had a negative impact on the demand for services offered by the H&T industry worldwide. Because H&T organizations cannot sell their services when such circumstances arise, they lose a considerable amount of nonrecoverable income. When the demand is low or there are sudden fluctuations in demand, it is neither easy nor recommended for H&T organizations to lower their rates greatly, since it may influence their image, change their customer segment, and upset their regular customers. A further issue in terms of perishability is that consumer demand for H&T services exhibits very cyclic behavior over a short period of time. For example, restaurants are busy during lunchtime, evenings, and weekends, but they may not be very busy at other times. Demand for many H&T organizations, such as restaurants and theme parks, increases during public holidays such as Christmas, New Year’s Day, and spring break. Depending on the location, many hotels and restaurants experience great variances in summers and winters. This puts much responsibility on the management of these firms in planning for the future and allocating their resources timely and adequately to the right purposes. In short, expected and unexpected fluctuations in demand have implications on cost structure, pricing, staffing, and resource allocation decisions.

Tangibility Hospitality and tourism organizations offer a combination of tangible and intangible products (Kandampully, 2007). For example, a hotel room or a meal in a restaurant has both tangible and intangible qualities. Again, there may be major differences between a budget hotel and a luxury hotel or between a fast-food restaurant and an upscale restaurant in terms of tangible and intangible qualities offered. However, services are often ideas, concepts, interactions, relationships, and experiences that are not often patentable.

28 CHAPTER 2: Strategic Management in Hospitality and Tourism

It is essential to note that the intangible aspects of services offered by H&T organizations are critical in customer satisfaction. This is because the main difficulty related to the intangibility of services is that customers cannot often see, feel, and test these services when they order or buy them (Gronroos, 2007; Kandampully, 2007). Prior to their purchase, they may try to evaluate services as much as they can by looking at the interior of a hotel or a restaurant and the appearance and behavior of the employees. In most cases, customers tend to rely on the image or the goodwill of H&T organizations. In order to overcome potential problems and dissatisfaction in these areas, some H&T companies publicize their service promises and offer a 100 percent satisfaction guarantee. Legal requirements have also been proposed for H&T organizations to provide acceptable service performance for customers. However, these legal requirements vary among different countries. The expectations of customers may also vary, depending on the country or geographical location of the H&T enterprise. We know that customers’ demands and expectations are constantly increasing, which puts more pressure on H&T organizations to improve their services and management practices.

Heterogeneity Services provided by H&T organizations may also vary considerably. One hotel unit in a chain hotel, one unit in a restaurant chain, or one holiday experience of a traveler to the same destination is unlikely to be identical to another. Many factors, particularly the human element, result in variations of the service delivery process. In other words, services will be heterogeneous, and variations in service delivery from customer to customer and from time to time will always occur. It is often difficult to standardize every employee– customer interaction in the H&T business. In addition, in many H&T organizations, customers interact not only with employees but with other customers. This customer-to-customer interaction in certain service organizations, such as pubs, discos, nightclubs, and cruises, can be an important aspect of the total service delivery process. H&T organizations are also highly susceptible to external changes. One example of an external factor is the weather. Visiting an outdoor theme park can be very pleasant and entertaining on a nice day, but it can be a miserable experience if it is raining and cold. In recent years, through the intensive use of information technology and active training of employees and design of physical facilities, attempts to improve and standardize the service delivery process have greatly increased. On the other hand, some customers expect a high level of service delivery, but this does not mean that they prefer standardized services. Therefore, H&T organizations need to achieve some degree of balance between

Characteristics of Hospitality and Tourism Organizations 29

standardization and differentiation in meeting the demands and expectations of their customers.

Cost Structure The cost structure of H&T firms influences their managerial and resource allocation decisions. For example, luxury H&T organizations are capital, labor, and energy intensive. Typically, they have high property costs and also employ large numbers of full-time employees. It can be difficult for them to reduce such cost items even if the demand is low. In addition, they may need to renovate their facilities every five to ten years to stay competitive in their field. Another issue is that given the vast amount of investment made in these organizations, investors and owners often look at very carefully at their return on investment. Therefore, these companies need to maintain a steady flow of customers to maintain the profitability of their businesses. This often leads to creative marketing and product development strategies as well as pricing strategies.

Labor Intensive Installing machines and computers on a car factory’s assembly line or in an ice cream factory can reduce the number of employees. However, compared to many organizations in other industries, H&T organizations require a great many employees. To put it simply, H&T organizations are labor intensive. This is because personal interactions and experiences are important parts of services, and employees play a key role in this process. Despite using many machines, computers, and technological developments, H&T organizations still rely primarily on their employees to deliver a memorable and positive experience. Being served and treated nicely by employees is a major factor in getting repeat customers.

The Impact of these Unique Characteristics on Managing H&T Organizations Previously, we examined several unique characteristics of H&T organizations. It should be noted that given the differences among organizations in this industry in terms of their size, service type, profit motive, and customer segment, the level and importance of these unique characteristics may be different. For example, the tangible aspect of service in a fast-food restaurant may be more apparent compared to eating in an expensive restaurant. The cost structure of a small-budget hotel is certainly different from the cost structure of a five-star luxury hotel.

30 CHAPTER 2: Strategic Management in Hospitality and Tourism

Table 2.1

Areas Where the Industry Characteristics Impact on Managing H&T Firms

1. Analyzing the internal and external environment as an ongoing process 2. Making decisions in the areas of service delivery, pricing, and marketing 3. Strategic planning practices 4. Developing a sustainable competitive advantage 5. Achieving and evaluating intended outcomes 6. Managing capacity to maximize revenue 7. Managing the cost structure of the company 8. Allocating available financial and human resources for future strategies 9. Evaluating and improving the service delivery process 10. Interacting and satisfying customers 11. Training, developing, and motivating employees and managers (our internal guests) 12. Designing and decorating facilities

The time a customer spends in a fast-food restaurant is much shorter than when he or she enjoys a four-course meal in an upscale restaurant. Interactions between customers and employees and among customers on a cruise ship, in a five-star hotel, or in a nightclub will be very different from the interactions in a budget hotel or McDonald’s. What is important here is that managers and owners of H&T organizations should be aware of the unique characteristics of their business. They also must go beyond the simple adaptation of the management techniques developed by the manufacturing industries. Table 2.1 provides some key areas where the preceding unique characteristics can have implications on the management of H&T organizations.

THE CASE FOR STRATEGIC MANAGEMENT IN H&T ORGANIZATIONS Despite its size and growing importance, the H&T industry faces major challenges and problems worldwide. Businesses in the H&T industry operate in a dynamic and complex environment. Macro trends such as changes in legislations, regional and global economic and political crises, sociocultural trends, sophistication of customers, stiff competition, terrorism, security, global warming, multiculturalism, globalization, mergers and acquisitions, labor shortage, and advanced technological developments all pose important challenges to the management strategies of H&T organizations. According to Nykiel (2005), product design, market segmentation, franchising, real estate investment trusts, and new product concepts are

The Case for Strategic Management in H&T Organizations 31

Tourism Management Dissertation Topics

Tourism management is the discipline that deals with the generalised management along with entrepreneurial, specialised and practical skills and competencies required for effective and efficient outcomes for recreation and leisure travel. Tourism is the fastest growing industry globally that has direct and indirect implications on economic, social and political indicators. In order to maximise the advantages and minimise the disadvantages from tourism development, the discipline has also included the perspectives of social sustainability and policy makers. Traditionally, the countries that have natural comparative advantage were seen as the focal point of the tourism industry, however the economic relationship of the industry has led the countries lacking such comparative advantage to use their history, heritage, culture, festivals and mega-events to promote and develop tourism. Topic suggestions below could help you narrow your research for your tourism dissertation.

• What are the key antecedents shaping domestic and overseas tourism preferences of British tourists?
• Development of decision making framework of British tourists in selecting tourist destinations during the summer holidays.
• Perception and attitude of millennials toward cruise holidays.
• Explicit or implicit factors affecting European city break package tours among British customers.
• Critical analysis of “I Amsterdam” city branding campaign to improve the negative image of Amsterdam.
• Perception and attitude towards Bangkok as a winter holiday destination among British tourists.
• Role of global terrorism in shaping the image of tourism destinations – Case study of Egypt and Tunisia.
• The implications of the Tsunami on the tourism industry in Phuket, Thailand.
• Role of strategic human resource management in developing sustainable competitive advantage in contemporary budget hotel chains.
• What makes South East Asia an attractive tourist destination during winter for British customers?
• The Role of London Olympics in enhancing the scope of tourism to the city.
• Perception and attitude toward Beijing’s world heritage tour among British tourists.
• Use of sporting events to develop tourism branding – Analysis of Qatar with regards to the FIFA World Cup.
• What are the disadvantages of tourism development and how can policy makers minimise them?
Critical evaluation of summer festivals in the UK as a source of domestic tourism development.

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