COMPETITIVE STRATEGIES IN

TOURISM & HOSPITALITY

Course 7
February 2014

CONCEPTUAL OVERVIEW

STRATEGIC THINKING

STRATEGY FORMULATION
Formulation: process by which an intended
strategy is created
Formation: process by which realized strategy is
formed
Both are processes. Strategy making is a craft
(Mintzberg, 1999)

SOME HISTORY

ENVIRONMENT SCANNING
Environment affecting any hospitality company is
divided into two areas:
1. GENERAL : broad forces affecting industry and
society (i.e. technology, politics, economics, sociocultural issues)
2. TASK: forces affecting the supply of resources,
shifts in competitor behavior, impact of industry
specific legislation, changes in consumer markets
Environmental analysis should be based on reliable
information to provide a valid assessment.

CLASSICAL APPROACH OF STRATEGIC

FORMULATION

WHITTINGTONS GENERIC PERSPECTIVES ON

STRATEGY
Outcomes

EVOLUTIONARY SCHOOL

EVOLUTIONARY SCHOOL (2)

WHITTINGTONS GENERIC PERSPECTIVES ON

STRATEGY

PROCESSUAL APPROACH

PROCESSUAL APPROACH (2)

PROCESSUAL APPROACH (3)

WHITTINGTONS GENERIC PERSPECTIVES ON

STRATEGY

SYSTEMIC APPROACH

SO .
Role of rationality?
Role of culture?
Role of power/politics?
Role of markets?

How we view strategy influences how we do it and

thus we decide: context, process and content!

WHITTINGTONS GENERIC PERSPECTIVES ON

STRATEGY

STRATEGY PROCESS - HOTEL CORPORATION

1. Strategic planning System
communicate corporate vision
negotiate strategic intent
delineate the responsibilities for developing and
implementing strategies
2. Monitoring, Control and Learning
monitor and control output
monitor and control effort
monitor changer in underlying assumptions
facilitate organizational learning

STRATEGY PROCESS - HOTEL CORPORATION (2)

3. Incentive System
build congruence between the strategic intents of
business unit managers and their superiors
encourage the exchange of full and valid business
information
4. Staffing system
match managerial experience and personality with
business mission

STRATEGIC ORIENTATIONS AND GROWTH POLICIES

Strategic
orientations

Growth Policy

Defenders

Growth focus is deeper penetration

into current markets
Growth focus is through the location
of new markets, products or
services
Growth focus through both market
penetration of existing markets and
also through market development
Management fails to articulate a
viable strategy

Prospectors

Analyzers

Reactors

Source: Miles and Snow (1978)

OPERATIONAL EFFECTIVENESS VS. STRATEGY

Organizational effectiveness is not strategy

because it is simply performing similar activities
(better) than rivals.

Strategy (or strategic positioning) is performing

different activities from rivals, or performing similar
activities in different ways.

QUESTIONS FOR STRATEGY FORMULATION

Are you being nonlinear? Creative and analytical at the same

time or just one of two?
Are you framing the problem correctly? Pinpointing the critical
issue?
Are you aware of your personal biases?
Knowing what not to do, when not to do something, is as
important as knowing what to do and when to do it (Sun Tzu
Art of War).
If the essence of strategy is choosing what NOT to do, what will
your firm not do?
Did you distinguish between operational effectiveness and
strategy?
If strategy is about being different, what are your different set of
activities that deliver a unique value package?
Different activities? Different way of performing the same
activities?
Is your strategy (or your competitive advantage) sustainable? If
so, what makes it so? If not, why not? Could it be?

STRATEGY AND ENVIRONMENTAL ANALYSIS

How will be the future in 5 years?

How will customers travel?
How will they communicate?
What distribution channels will you use?

How did you think about the future (5-10 years)?

Did you base yourself on the past?
Are you benchmarking?
Did you guess?

Strategy and environment (firm, politics, etc.)

strategy is a mediator between the firm and the

environment (Mintzberg, 1986)

STRATEGY AND ENVIRONMENTAL ANALYSIS (2)

Why (Not) Strategy: Planning Direction

Strategic planning sets direction,
Assumes predictable environment and future.
Formulation/implementation
Strategic thinking, however, assumes future cannot
be predicted

Why (Not) strategy as Perspective?

Coordinates activity. Without it, just a bunch of
individuals going in own ways.
Groupthink
Risk of being unable to change strategy and actions
when need to do so

SCANNING THE ENVIRONMENT

identification of environment forces that potentially
affect the industry
continuous study of the evolution of some variables
in the firms environment
analysis of relationship between different external
variables
estimation of future evolution of these forces and
their impact

THE STRATEGIC MANAGEMENT PROCESS

Source: Harisson, 2003

COMPONENTS OF STRATEGIC ANALYSIS

QUESTIONS ON BROAD ENVIRONMENT

QUESTIONS ON BROAD ENVIRONMENT (2)

QUESTIONS ON BROAD ENVIRONMENT (3)

QUESTIONS ON BROAD ENVIRONMENT (4)

INFLUENCE OF EXTERNAL STAKEHOLDERS

INFLUENCE OF EXTERNAL STAKEHOLDERS (2)

INFLUENCE OF EXTERNAL STAKEHOLDERS (3)

TACTICS FOR WORKING WITH EXTERNAL

STAKEHOLDERS

TACTICS FOR WORKING WITH EXTERNAL

STAKEHOLDERS (2)

TACTICS FOR WORKING WITH EXTERNAL

STAKEHOLDERS (3)

DEFENSIVE STRATEGIES
Growth Strategies

Competitive methods

Joint ventures

Technology based systems

Franchising

Brand development

Strategic alliances

Product quality

Management contracts

Sophisticated pricing

Conversions

Global marketing and

advertising

Sale and leaseback

Acquisition of small
firms (M&A)

ORGANIZATIONAL RESOURCES AND CAPABILITIES