Introduction and Overview
The aim of the module is to provide an opportunity for students to understand, apply and critically evaluate strategic analysis for tourism organisations and destinations. The examination and analysis of particular tourist organisations and destinations will provide a basis for understanding and critically evaluating the factors that can contribute to successful strategy. Students will be able to evaluate strategies, their appropriateness and the issues that will determine whether or not they are successful.
Intended Learning Outcomes
On successful completion of this module the students will be able to:
understand the theory and practice of strategy in tourism
develop appropriate strategies based on critical situational analysis
provide an evaluation of the strategies pursued in different tourist contexts
identify and evaluate the critical success factors
Part 1 Strategic Purpose
Introduction to strategy
Mission and purpose
Culture and strategy
Part 2 Strategic Analysis
The external environment: PEST
The external environment: Competition
The internal environment: Capability
Part 3 Strategic Choice
Strategic direction and methods
Part 4 Strategic Implementation
Organising and resourcing
Managing and monitoring
Strategy in action
Unit 1 provides an introduction to the subject and introduces a framework for examining the whole strategy process based around four key component parts of the strategic process:
These four areas in turn provide the headings for the four parts of this book.
Unit 2 examines in detail the concept of strategic mission. It analyses the aims and purposes of tourism entities and introduces the idea of stakeholders.
The relationship between culture and strategy is investigated in Unit 3
After studying this unit and related materials you should be able to understand:
the meaning of strategy
the process of strategy
the importance of strategy
the contexts and uses of strategy in tourism
competing approaches to strategy
and critically evaluate, explain and apply the above concepts.
The New Zealand Tourism Strategy 2015 is guided by its vision statement:
“In 2015, tourism is valued as the leading contributor to a sustainable New Zealand economy”.
But a vision needs unpacking into more specific outcomes and for NZTS 2015 these are:
“New Zealand delivers a world-class visitor experience
New Zealand’s tourism sector is prosperous and attracts ongoing investment
The tourism sector takes a leading role in protecting and enhancing the environment
The tourism sector and communities work together for mutual benefit”
There are four key elements of corporate strategy:
Strategic choice, and,
This is often defined by an organisation’s mission which includes:
what the organisation is trying to achieve
what its purpose or aim is
where it is trying to head for in the medium to long term.
Mission is influenced by
nature of business
In the case of NZTS 2015 the mission (in this case called vision) is that:
“In 2015, tourism is valued as the leading contributor to a sustainable New Zealand economy” (p. 5)
Key contributors to NZTS 2015
The Tourism Industry Association
The Ministry of Tourism
Tourism New Zealand
This involves consideration of the major influences upon the organisation's success in terms of
Resources (capability), and
Strategic analysis is concerned with analysing
the strengths and weaknesses of an organisation’s internal resources and
the opportunities and threats posed by its external operating environment.
NZTS 2015 identifies four significant threats in its external environment.
The impact of travel on climate change.
The greater use of IT by consumers.
The trend towards higher fuel prices.
The the highly competitive nature of tourism destinations
This is concerned with
generation of strategic options
evaluation of strategic options, and,
selection of strategy
The strategic option favoured by NZTS has moved from mass tourism (where price is a major consideration) to quality / differentiated tourism (where visitor and host experience is a major consideration).
The “100% Pure New Zealand” brand (p. 10) remains a central part of the strategy
The following link shows the TV “100% Pure” for New Zealand
This is concerned with:
logistics and implementation timetable
timetable for implementation
monitoring and review
“Increasing visitor satisfaction
TARGET: Increase by four percentage points the number of international travellers who rate their overall experience of New Zealand as eight or more on a 10–point scale…
Increasing the amount visitors spend
TARGET: Increase the average amount that visitors spend per night from $130 to $160 by 2015.
TARGET: Increase the number of international visitors who arrive in the shoulder season … at a rate that is 25% faster than the overall annual forecast growth rate every year between now and 2015…
Delivering environmental best practice
We must develop ways of measuring the amount of carbon emitted by the tourism sector …
We must develop ways of measuring how satisfied visitors are with New Zealand’s environment performance.
Creating positive community outcomes
We must develop ways of measuring how local government accommodates and promotes tourism and how residents feel about the tourism activities taking place in their communities.”
"Strategy is the direction and scope of an organisation over the long term: ideally, which matches its resources to its changing environment, and in particular its markets, customers or clients so as to meet stakeholder expectations." (Johnson and Scholes, 2008)
" A strategy is the pattern or plan that integrates an organisation's major goals, policies and action sequences into a cohesive whole." (Quinn, 1998)
"Five definitions of strategy are presented... - as plan, ploy, pattern, position and perspective." (Mintzberg, 1998)
A strategy needs to address the following questions:
where are we trying to go?
how can we get there?
how do we know if we've got there?
Working definition of strategy:
"the planning of a desirable future and the design and testing of suitable ways of bringing it about".
are complex rather than simple
are integrated rather than isolated
are long term rather than short term
are proactive rather than reactive
have an impact on the whole rather than a part of the organisation
involve major rather than minor change
involve grand design rather than marginal tinkering
are made by those in positions of power in the organisation rather than subordinates
Tourism Profit-making organisations
Specific goals – e.g. climate change
Mega projects and Events
Avoid Strategic Drift
Survive Turbulent Environments
Avoid Organisational Fragmentation
A national, regional or local tourism strategy often works to co-ordinate al the disparate players in the tourism economy
Strategy as prescription
This grouping of approaches including the classical approach believes that a strategy can be formulated using knowledge about an entity’s situation and that the strategy can be effectively put into action.
The contested nature of strategies
Other approaches underline the messiness of the world that entities operate in, the difficulties of obtaining correct knowledge, the sometimes overwhelming power of the external environment on entities and the effects of humans on the whole process.
Strategy: The planning of a desirable future and the design and testing of suitable ways of bringing it about.
Four key elements of tourism strategy: strategic purpose, strategic analysis, strategic choice and strategic implementation.
Strategic drift: When an entity has failed to monitor and keep pace with its changing external environment.
Turbulent Environments: Dynamic, diverse, difficult and dangerous.
Fragmentation: When the constituent parts of an entity do not serve a common goal.
Competing Approaches to Strategy: Strategy as prescription vs the contested nature of strategies.
The following link is an interview is with BAA Chief Executive Officer Stephen Nelson (2007)
What aspects of strategy are illustrated in this interview?
Define the term strategy in your own words. Use examples, explain the essential features which distinguish a strategy from similar concepts and use counter-examples to clarify what strategy is not.
Explain the relevance of the terms strategic drift, turbulent environments and organisational fragmentation to a named tourism entity.
Map out the four key elements of strategy for a named tourism entity.
Explain, using examples, what Mintzberg (1998) meant when he described strategy as "plan, ploy, pattern, position and perspective". Do you think his definition is an appropriate one?
What factors can make strategy a contested concept?
Read the following strategy statement for Ryanair (or find alternative) http://www.ryanair.com/site/about/invest/docs/Strategy.pdf
and answer the following questions:
What is a strategy?
What are the key elements to a Ryanair’s strategy?
How is Ryanair’s strategy different to that of BA and which is the most successful?
Introduction and Overview