 Unit 6  The Internal Environment: Capability Risk Management and Strategic Planning

Reading BookCh Tribe, J, (2010) Strategy for Tourism, Goodfellow Publishers, Oxford. 6 Capon, C. (2008) Understanding Strategic Management, Prentice Hall: Hemel Hempstead. 3 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. 3

Learning Outcomes  After studying this chapter and related materials you should be able to understand: resources and competences resource audit performance monitoring and control evaluation of products SWOT analysis  and critically evaluate, explain and apply the above concepts.

Discussion Point  How do we know if our internal resources are being used well?  What risks arise from our internal resources  What makes a good product or service?

Resources and Competences  Resources are the inputs that are used for the activities of tourism entities. Competences are the skills and abilities used to deploy resources to achieve a given end. Core competences are defined as those which are central to the entity’s mission and those which enable it to develop its competitive advantage.  Resources may be classified under four headings: physical resources human resources financial resources, and intangibles

Balanced scorecard  The balanced scorecard collects performance data from a range of an organisation’s activities.  It arose from criticisms that other measures are too narrow  Four areas that are typically targeted for review are: Financial perspective (e.g. profit margins, revenue growth, costs, cash flow, net operating income) Customer perspective (e.g., market share, customer satisfaction) Internal process perspective (e.g. asset utilization, supply chain management, customer management, innovation and relations with the external stakeholders), Innovation and learning perspective (e.g. human capital, information capital and organization capital).

Comparative Analysis  Comparative analysis can be made by reference to Longitudinal Analysis which uses an organisation's historical record to compare data on performance over time. Best Practice which uses data from other organisations in an industry to provide information on the highest performance standards attainable.

Evaluation of Products  Part of an organisation's capability review will focus on an evaluation of current products.  There are several methods of analysis including: effectiveness value chain analysis portfolio analysis, and product life-cycle analysis.

SWOT Analysis  SWOT analysis is an executive summary of the different elements of strategic analysis. Under SWOT, the detailed analysis of an organisation's external environmental and internal resource position is distilled and summarised into key factors.  Once the key SWOT elements have been identified, it can be productive to prepare a grid with strengths and weaknesses and opportunities and threats.  Identification of an organisation's situational position by means of a SWOT analysis is an important phase in prior to consideration of strategic options which is the subject of the next chapter. Appropriate strategies are likely to: align opportunities and strengths transform weaknesses, and overcome threats

SWOT Analysis Internal (Capability) AnalysisStrengthsWeaknesses Resources Products External (Environment) AnalysisOpportunitiesThreats Competition Political Economic Socio-cultural Technological

Task 2  Task 2: Prepare a SWOT analysis for your organisation

 Unit 6  The Internal Environment: Capability  The End Strategy for Tourism Risk Management and Strategic Planning