Risk Management and Strategic Planning  Unit 8  Strategic Directions and Methods

Reading BookCh Tribe, J, (2010) Strategy for Tourism, Goodfellow Publishers, Oxford. 8 Capon, C. (2008) Understanding Strategic Management, Prentice Hall: Hemel Hempstead. 7,8 Tribe, J. (2005) The Economics of Recreation, Leisure and Tourism, Butterworth Heinemann, Oxford. - Johnson, G., Scholes, K., and Whittington, R. (2008) Exploring Corporate Strategy, Prentice Hall: Hemel Hempstead. 7, 9, 10

Learning Outcomes  After studying this chapter and related materials you should be able to understand: Strategic directions such as consolidation, market penetration, market development, product development, diversification and withdrawal. Strategic methods of growth including internal growth, mergers and take-overs, and joint ventures and alliances. Strategic methods of development such as innovation and entrepreneurship.  and critically evaluate, explain and apply the above concepts.

Discussion Point  What examples exist of innovation in tourism?  How can organisations encourage innovation?  What risk factors are associated with innovation?

Directions  This section considers the strategic directions an organisation might take in pursuit of its overall strategy. The main directions are: withdrawal consolidation market penetration market development product development diversification

The Ansoff Matrix

Methods: Growth  This section examines the main methods by which a particular strategy may be developed which include: internal growth mergers and take-overs joint ventures and alliances

Internal Growth  Internal growth means that markets and products are developed without recourse to mergers with other organisations. This route may be chosen because: owners and managers wish to retain control of an organisation organic growth is less disruptive and can be more readily accommodated finance may be limited there may be no suitable targets for mergers problems of cultural fit between merging organisations can be avoided.

Joint Ventures and Alliances  This method of strategic development represents a desire for the benefits of collaboration without complete merging of ownership and resources. It can take the following forms: franchising and licensing joint ventures alliances

Methods: Innovation  Innovation is a key method to achieve costs reductions or differentiation.  Hall & Williams (2008) identify a number of key drivers of tourism innovation that include: competition and protection knowledge and creativity innovation policies firm-led strategies entrepreneurship

Risk Management and Strategic Planning  Unit 8  Strategic Directions and Methods  The End