Professional Documents
Culture Documents
Topic 1 Strategy
Topic 1 Strategy
Strategy
Grado en Turismo
Strategic Management
Prof.: Maria Razumova
Contents
Contents
1. Concepts and definitions
2. Components of a strategy
3. Levels of strategic decisions
4. Strategic management process: definition and phases
5. Specifics of strategic management in tourism firms
A plan
A ploy (tctica)
A pattern of behavior
A position in respect to others
A perspective
Example: a big tour operator may plan to expand its share in the UK
market by offering lower prices and by opening subsidiaries in the
main UK cities
Detailed actions
A maneuver to outfit the competitors
A threat (amenaza, amago)
- to decrease the prices to destabilize competitors, price wars)
Example: our tour operator may discount even more its prices for the
last minute deals to destabilize competitors and sell excess
capacity
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Contents
1. Concepts and definitions
2. Components of a strategy
3. Levels of strategic decisions
4. Strategic management process: definition and phases
5. Specifics of strategic management in tourism firms
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Components of strategy
Determination of the basic long-term goals
Where do we go?
Have to be coherent and attainable
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Components of strategy
Adoption of courses of actions
Actions to reach the objectives
Different actions can be undertaken to reach the same
objectives (ej. a trip from Majorca to Madrid)
The existing options have to be evaluated
Detailed decisions
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Components of strategy
Allocation of resources
Do we have resources to support the proposed action plan?
Availability, quality, cost
Resource inputs:
Financial resources
Human resources
Physical (tangible) resources
Intellectual (intangible) resources
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Contents
1. Concepts and definitions
2. Components of a strategy
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Contents
Strategy is not
only one decision
only decisions taken on the top level
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subordination
Decisions in an Organization
Strategic decisions on
each level of a firm differ
from each other in:
Strategic level
Tactical level
Operational level
Focus: (what?)
Organizational level: (who?)
Scope (alcance)
Time horizon
Degree of
certainty/uncertainty
Complexity
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Organizational level:
Scope:
Time horizon:
Certainty/uncertainty:
Complexity:
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Implementation of strategy
How the strategic objectives are to be met
Strategic objectives fine-tuning and adjustments
Dependent upon strategy
Organizational level:
Scope:
Time horizon:
Certainty/uncertainty:
Complexity:
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Short-term objectives
Day-to-day management
Dependent upon strategy and tactics
Organizational level:
Scope:
Time horizon:
Certainty/uncertainty:
Complexity:
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Contents
1. Concepts and definitions
2. Components of a strategy
3. Levels of strategic decisions
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Strategic analysis
Internal analysis
Internal strengths
and weaknesses
External opportunities
and threats
Evaluation of options
and selection of
strategy
Implementation and
control
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Strategic analysis
Internal analysis
Internal strengths
and weaknesses
External opportunities
and threats
Evaluation of options
and selection of
strategy
Implementation and
control
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Escuela de Turismo de Baleares www.etb-baleares.ess
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Strategic analysis
Internal analysis
Internal strengths
and weaknesses
External opportunities
and threats
Evaluation of options
and selection of
strategy
Implementation and
control
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Escuela de Turismo de Baleares www.etb-baleares.ess
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Goals
Objectives
Abstract
Somewhat abstract
Specific
Measurable
Communicable
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Objectives
Mission and vision
Corporate objectives
Economic
Financial nature:
Return
Return on assets
Return on sales
For non-profit:
Value for money
(marketing office:
tourists per euro spent)
Growth
Competitive
advantage
Economy of scale
Pricing power
Companies position
in respect to
competitors
- CRS in profit
organization
Reputation
Research
Human resources
Social
Support local
community
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Strategic analysis
Internal analysis
Evaluation of options
and selection of
strategy
Implementation and
control
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Strategic analysis
Socio-demographic
Internal analysis
Political
Industry
(Strengths / weaknesses)
External analysis
Economic
Firm
Microenvironment
Macroenvironment
Competitive
environment
Environmental
Technological
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Strategic analysis
Internal analysis
Internal strengths
and weaknesses
External opportunities
and threats
Evaluation of options
and selection of
strategy
Implementation and
control
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Escuela de Turismo de Baleares www.etb-baleares.ess
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Strategic choice
How we will compete?
What are our strategic directions?
Which methods we use?
Strategic
option 1
Strategic
analysis
Key
issues
Strategic
option 2
Strategic
option 3
Evaluation
criteria
Strategic
option
selected
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Strategic choice
Strategies:
Specific strategies:
Growth strategies:
Evaluation criteria:
Cost-benefit
Risks
Scenario analysis
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Strategic analysis
External opportunities
and threats
Evaluation of options
and selection of
strategy
Internal analysis
Internal strengths
and weaknesses
Implementation and
control
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Contents
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Services
We use them
Services are:
Intangible
Inseparable
Perishable
Heterogenic
Ownership
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Package
Transport
Accommodation
Other
services
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FLUCTUATING DEMAND
Seasonal fluctuations
Climatic conditions
Economic activity
Force major terrorism,
wars
VS
FIXED SUPPLY
Hotel beds
Flights obligations
Contractual
obligations of TO
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Contenidos
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Implication:
If someone is successful , it is not difficult for
a competitor to offer a similar product
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Accommodation
Attractions
Transport
Travel organizers
Destination organizers
Managerial response:
vertical integration
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On host destinations:
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Economic
Social
Environmental
Visitor
spending
Understanding
different cultures
Regeneration of
urban areas
Jobs creation
Conservation of
traditions (tourist
attractors)
Protection of natural
resources for visitors
Loss of authenticity
(McDonalds)
Investment in
infrastructure
Leakages of
income (tax
heavens, no
reinvestment in
local economy )
Disturbance to the
traditional ways of life Damage to
landscape and historic
buildings
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Review questions
Define the strategy using Mintzbergs 5 PS framework
Explain the difference between strategic, tactical and
operational decisions
Define the mission and its purpose
Define the strategy using Chandlers framework and its
components
Define the types of objectives
Define the stages of strategic management process
Explain the key feature of services and how they relate to
travel and tourism
Explain the role of the package in the growth of the tourism
sector
Describe the six factors that specifically apply to travel and
tourism
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Escuela de Turismo de Baleares www.etb-baleares.ess
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Basic reading
Evans, Campbell and Stonehouse (2006).
Strategic Management for Travel and
Tourism.
Chapter 1 and 2.
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Exercise 1
Great Eastern Hotel case read and
answer the questions (download from the
Aula Virtual)
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Exercise 2
Considering the characteristics of tourism
and travel products discussed in 5.1 and
5.2 explain, what are the similarities and
differences in managing a restaurant to
managing an ice-cream factory?
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