Contents Page
1. Reflection on the Beefeater Simulation
1.1. Nature of resources
1.2. Management of resources
2. The strategy dynamics approach
2.1. Strategic Issues
2.2. Internationalization of strategy
2.3. Development of new strategy
2.4. The hospitality sector
References
Reflection on the Beefeater Simulation
Nature of resources
Often the transition phase is managed by two parallel structures one that keeps the operation going and one that oversees changes impacting the technical, financial, or people ends of the business. When more than one initiative is required, a change strategy called a multiple project integration process can be used to provide for coordination and integration to minimize the chaos and competition for attention and resources. A good communication and participation plan can hold the whole thing together and aid employee involvement and commitment. Transformation usually results from radical marketplace or environmental changes coupled with the organization’s inability to handle current and future requirements using its existing mindset, resources, skills, structures, and practices. The pain of the mismatch between the organization and the needs of its environment creates a wake-up call for the leaders of the organization ( 2000).
If the leaders don’t hear or heed the call and the organization doesn’t change to meet the new demands, the organization will struggle, decline, and ultimately die. To survive, the leaders in one way or another must act on the wake-up call and begin the process of transforming to a new way of being and operating. Over time, the organization begins to experience difficulties in any number of areas: stagnation, equipment failure, productivity drops, and loss of control of costs and information. Threats from competition, inadequate resources and skills, market loss, or new demands from the environment add to its difficulties. It moves into a period of struggle between internally and externally driven chaos, and attempts to maintain some semblance of order and control. Because of their attachment to the old success record, executives usually continue to deny, explain away, or overlook the series of wake-up calls for needed change, which get louder, more painful, and more costly as time goes by. The fact that specific resources are available is useless until they are utilized. In order for an enterprise to operate effectively in successfully discharging its tasks, it is necessary to know the value in action of its resources ( 2000).
Even if the measures are very fair or are perceived as fair, even if everyone can win, a performance-driven system still encourages people and teams to accumulate resources. In particular, such a system of competition encourages the accumulation of those resources that are important to success and most difficult to locate and acquire. To the extent that measures are linked to rewards or punishments, organizations will seek the resources they need to do well by these measures. If measures are to motivate improved performance, those managing the performance-driven system will have to make sure that key resources are available to all. They will have to ensure that no individuals or teams can gain an unfair advantage by monopolizing control of some essential but limited resources ( 2000). The Beefeater simulation helped in determining the importance of resources to organizations and it showed the effect of resources to organizational actions.
Resource management
Historically managers focused on the desires of traditional users or commercial interests in the various renewable resources, in part, because they showed the greatest concern about resource management. The focus on understanding consumptive users reflected popular philosophies of the time, emphasizing conservation and management for wise use or the production of commodities from the resource. The environmental movement and its emphasis on non consumptive and ecosystem-function benefits from the natural resource base has been a relatively recent phenomenon, preceded by decades of effort by hunters, anglers, other outdoor recreationists, commercial fishing and forest industry interests (1996). The combination of ecological, political, economic and socio cultural factors that influence the management process can be conceptualized as the particular context or environment in which natural resource management is conducted. The concept of a management environment draws together these four domains of influence on natural resource management, which must be considered in management decision making regardless of the specific contextual attributes involved. The ecological component of the management environment sets the limits or boundaries on potential resource productivity and use. The ecological component includes the ecosystem within which the flora and fauna of interest exist (1996).
The economic component of the management environment includes all the processes of the marketplace and non market forces that influence valuation of natural resources. Economics has long been an important consideration in natural resource policy. The political component includes three aspects: established laws and codes, policies of various government agencies, and the values of government employees who enforce or interpret laws and policies in their daily work as resource managers. The first aspect usually consists of concrete, legislative statutes and administrative codes that grant agencies the responsibility and authorization for management of the public’s natural resources. The second aspect includes the branches of government that interact with a natural resource agency and have important influences on management decisions. The third aspect is poorly defined because the biases of government officials are dynamic and often undocumented (1996).
The socio cultural component of the management environment includes traditions, values, norms, religions, and philosophies of various segments of the public, specific constituencies, and resource managers themselves. These represent the complex socio cultural milieu within which management is conducted. This component provides the primary motivation for natural resource management to occur. Management takes place because the end products are believed to have value to all or part of society (1996). The Beefeater simulation provided insight on how management of resources can be done. It provided information on what are the different weaknesses of the company’s resource management. It provided insights on how the management of resources can be a success.
The strategy dynamics approach
Strategic issues
External analysis pinpoints major opportunities and threats posed by the environment. It analyzes those external factors the community or public sector jurisdiction cannot control but which nevertheless affect its ability to achieve strategic objectives. Internal analysis provides an objective understanding of the controllable factors in the public sector jurisdiction’s internal environment, identifying those with the greatest long-term impact on a community’s or organization’s position ( 1991). The objective of this analysis is to identify the organizations or community’s major strengths and weaknesses with respect to its overall mission or relative to each of the strategic issues it faces. The usefulness of the internal analysis depends on objectivity and completeness and identifies strengths and weaknesses of the organization as it attempts to implement strategic plans, goals and objectives, and its overall mission. Organizations need to be aware of what is happening in their environment that might affect them. In other words, they should continually survey and monitor the outside as well as the inside of the organization. This is especially true during the strategic planning process ( 1991).
Five separate but overlapping environments should be monitored. These include the macro environment, the government environment, the competitive environment, the citizen environment, and the organization’s internal environment. These areas should be surveyed in depth. Environmental scanning will also identify a variety of factors, both internal and external to the organization. In fact, one of the benefits of strategic planning is that an organization will gain a better understanding of how environmental scanning should be done and be able to manage more effectively as a result. Factors to be considered as part of the macro environmental scanning process include social factors such as demographics, financial factors such as interest rates, and political factors such as increasing government deregulation, changing federalism and state government’s trends, and regulations ( 1991).
Among the factors to be considered as part of the government environment are the number and locations of other governments, the degree of federal and state government presence, the typical services being provided, and the marketing strategies of other competitive local governments. The competitive-environmental scan includes consideration of general competitor profiles, market segmentation patterns, research and development, and others ( 1991).The combination of environmental assessment and forecasting, and the strength and weakness evaluations is often referred to in the strategic planning process as the situation audit or the environmental scan. The basic purpose of the environmental scan is to assess the environment within which strategic planning will be conducted and to develop a set of strategic issues ( 1991). The strategies formulated by businesses will always be under certain issues. These issues helps a company determine which strategy is the best one for them to consider to use.
Internationalizing strategies
Four broad types of internationalization strategy that can be identified in the businesses include domestic, exporting, international, and global strategy dimensions. Understandably, the internationalization dimension played a very minor role in defining domestic strategies. Instead, overall strategic behavior was dominated by competitive positioning. Little emphasis was placed on international investment, political, or integration sub strategies. When compared with strictly domestic businesses, exporting businesses relied much more heavily on international sales in accounting for total business revenues ( 1990). Furthermore, businesses were commonly committed to increasing international sales levels through eventual foreign direct investment, typically in terms of overseas sales/distribution centers. Exporting businesses placed considerable attention on international external integration and international political activities. Integration with the international external environment was achieved largely through developing expansive international information networks and establishing licensing agreements based principally on manufacturing technology ( 1990).
With increased levels of international activity, businesses became more fully exposed to divergent international business environments. This exposure had a dramatic influence on strategic behavior, as businesses found themselves stretched to balance global competitive pressures with organizational capabilities that remain dominated by domestic concerns. International investments were contingent on market opportunities for introducing the particular technology ( 1990). Minimizing costs played a relatively minor role in determining the location of overseas operations. Also, rather than trying to influence their political environments proactively, international strategies seemed to be much more reactive. A high propensity existed either to enter independently only those foreign markets that provided attractive political environments or to avoid political entanglements entirely by seeking local partners to assist in product assembly and distribution. Of the four internationalization strategy types identified, the global strategy type demonstrated the highest commitment to international activities. This commitment was directed by tight head office control over all international activities ( 1990).
International investment location decisions were determined on the basis of potential comparative advantage. Value activities were frequently spread across national boundaries leading to huge scale economies. Production-sharing alliances were used frequently. Worldwide distribution networks were established to move the business’s internationally standardized products. Distribution often involved the sharing of outlets with sister businesses within the same corporate organization (1990). Strategies should not only be based on changes in the local environment. The strategy of any company is affected by the different changes in the international environment. Strategies need to be globally competitive and well adjusted to the demands of the environment for it to be a success and for it to help the company in achieving its goal.
Development of a new strategy
Because any new arrangement is likely to decrease some valued benefits of past associations, and outcomes of new activities are often uneven, the period of affirming a new strategy continues to be unstable. Interaction among those in the middle of the organization will also bring conflicting interests and concerns to the attention of top executives, which can be an important impetus for developing new strategy. The true second order change will be more likely if people across the organization gain ownership in the new strategy by putting together pieces of it for themselves (, , . & , . 2000). New assignments also divert attention to new issues. These factors, in conjunction with social norms about fair trial, help generate a honeymoon period following formal adoption of a new strategy. In the formal model, the affirmation of the new strategy is assumed to be accompanied by a reduction in stress, such situations out of the old strategy (, , & , 2000). In any industry changing a strategy is a must especially if the company has difficulty in surviving in the environment. Companies should have the appropriate tools and procedures that will help them determine whether their strategies are appropriate.
The hospitality industry
Cursory inspection of the accommodation sector might suggest that a few large chains dominate the market, giving the impression of an oligopolistic structure. However, the service hospitality sector within holiday tourism is mostly fragmented in many small units where location and the spatial distribution of accommodation are important factors determining the degree of competition. Furthermore, the wide range and quality of accommodation, its multi-product nature and seasonal variations in demand, introduce an additional dimension into the operation of the market. These aspects of the accommodation sector are considered at some length in tourism texts, of which those are good examples ( & 1997).Accordingly, different forms of structure perfect competition, monopolistic competition, oligopoly and even monopoly might, as argued below, reflect the conditions of different elements of the sector, ranging from the serviced to the un-serviced self-catering segments. Notwithstanding its complicated structure, some fundamental economic factors characterize the accommodation sector. It is subject to fixed capacity with all its attendant problems in the face of periodicity, perish ability and seasonality. Allied to this, particularly in larger units offering a wide range of services, high fixed costs drive operators to attain high occupancy rates through such devices as product differentiation and market segmentation ( & 1997).
These characteristics tend to involve elements of both natural monopoly and oligopoly. For example, some hotels concentrate on the luxury segment while others serve a budget clientele. Many seek flexibility by targeting the business market during the working week and the leisure sector at weekends. In holiday resorts, the needs of different groups can be met over the year, for instance catering for skiers in winter and walkers in the summer, as occurs in Austria, France and Switzerland ( & 1997). Despite these attempts to exploit market potential, in the early 1990s hoteliers who bought at the peak of the property boom in the UK were put under extreme pressure as they had made an over-priced purchase which could not be serviced by revenue. Large corporate-run hotels, mainly serving business travelers, tend to cluster in or around large urban areas, airports and on land transport routes. Holiday hotels are more likely to be independent and more widely dispersed, although clustering still occurs, such as in resorts or locations which are principal tourist attractions. In this sense the accommodation sector is akin to monopolistic competition in the retail market ( & 1997). The accommodation sector can be a source of a profitable business. This sector provides lodging to tourists and other kinds of clients in different countries.
Franchising in the hotel/motel industry has been used extensively. Hotels have used franchising to satisfy the retailing of services to meet the challenges of intangibility, perish ability, inseparability, and variability. Labor intensity and quality control are other challenges that franchising has successfully addressed. Fluctuating demand caused by seasonal variations is another facet of the market structure of the hotel industry. To meet this challenge, several ski resorts in appropriate locations have opened their facilities to tour groups during the summer months ( & 1995). Moreover, hotels have offered weekend rates and discounts to special groups during the off-season. In general, hotel and motel organizations tend to be small, with more than half accounting for no more than three units. Nonetheless, like the rest of the retail industry, large organizations are steadily increasing their market share. This concentration of large organizations has developed partly because of inter organizational communication systems, franchised networks, and corporate vertical systems ( & 1995).
A strong and clear hotel image can increase consumer confidence in its lodging and service accommodations. Because the way in which consumers perceive a hotel can influence their reaction to its offerings, management is very concerned with the development of hotel image. Perception of a hotel image is derived not only from functional attributes of price and convenience but also from the influence of architecture, interior design, colors, and advertising ( & 1995). The competition on the hotel industry is based on the desire of each hotel owners and managers to provide the best service to clients. Companies in the hospitality sector that face a tough competition has to make sure that its strategy can overcome the threats by the competitors. One approach that can assist in strategy change is the strategy dynamics approach. The strategy dynamics approach provides a deeper understanding of how strategy works for an organization. It shows what aspects of a strategy needs to be strengthened for it to be effective and for it to provide benefit to the hospitality company. The strategy dynamic approach provides assistance in how important is strategic planning. It determines the different steps taken in strategic planning and how it fits the situation in the hospitality industry. Through strategy dynamic approach proper means of undergoing strategy planning can be made.
References
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