Hospatility and Tourism Strategic Managment - Essay Example

?Task HOSPITALITY AND TOURISM STRATEGIC MANAGEMENT Introduction The art and science of formulating, implementing and evaluating multi-functional business approaches and decisions in order to make sure that the business firm achieves its goals and objectives effectively in the short and the long run is the Strategic management. With ever increasing competition in the chaotic and often unpredictable market scenario, the concept of strategic management has gained popularity across the various business sectors. It ensures a seamless integration of widespread business activities from different functional sectors, including marketing, sales, production, and administration to ensure that the organisational goals are achieved. Strategic Management planning and decisions are made by the top management of any organization and is often initiated and led by the board of directors and practically executed by the firm's Chief Executive Officer (CEO), Chief Operations Officer and other executives. The foresightedness and clear vision of a firm’s management and their awareness of the company’s external environment with the anticipated problems, prediction of market trends and ability to come with new and realistic ideas decides the future of the company (Okumus, Taylor and Chathoth 2010). This is even more so true in today’s global volatile economy. Management’s foresightedness enables them to identify opportunities and detect threats, and helps the ground level managers in developing strategies and formulate and implement them for sustainable growth of the company (Enz 2009). Strategic Management: Need of the Hour Strategic planning has seen a vast improvement and has evolved in recent times, more so with the volatile economy and intense market competition. However, there is still a tendency of the senior management to keep the formal strategic planning in their purview rather than making it transparent and developing a clear communication with the middle managers and other employees (Moutinho 2011). This approach will not only prove to be detrimental for the future of organizational objectives, but also will not allow a complete harmony between the various levels of employees. The middle management will not be equipped to handle and execute the strategic planning of the senior management until and unless they have a clear understanding of the future vision of the organization. The hospitality and tourism industry has evolved from late eighties and has seen tremendous growth, making the competition stringent with most of the developing countries focussing and formulating friendly policies due to the industry’s immense potential. With advanced tools being introduced to make the services as pleasing for the customer as possible, the focus has more or less now shifted on the unit and the departmental levels of industry players. Hence, the senior management needs to realize the importance involving all the employees in strategic decision making as they are the ones, who deal one on one with the existing and prospective customers, which eventually decides the company’s reputation and future market base (Scott and Laws 2006). Business Environment The external environment that any company in the hospitality industry needs to do a thorough analysis on can be divided into the operating environment and the organisational environment. Many developed and primarily developing countries have come up with hospitality industry friendly policies and procedures due to the immense potential of the hospitality and tourism industry to generate huge amounts of economic benefits for any country, benefits like, employment, foreign exchange, tax revenues etc. (Kotler 2008). Managers must give a detailed consideration to the macro-environment factors. Firstly, political factors - governments enforce rules and regulations within which the company must operate, such as subsidies or lenient tax laws for new businesses. Governments can shut companies for not complying with the enforced laws. Therefore, being compliant with the laws would ensure that they will keep away from illegal activities; which is a positive sign for its financial security and market reputation. Economic factors are the second major aspect that plays a great role in ensuring growth and profits for all the stakeholders, particularly the owners and customers. The most prominent economic factors that fall under the decision making of any company are economic growth, inflation rates, credit availability, foreign exchange rates and inflation rates. Thirdly, socio-cultural factors or the behavioural trends due to their lineage affect people and prove to be important. Positive reputation of a company amongst customers and local suppliers would increase its product demand and ensuring newer opportunities and avenues. The fourth aspect is the technological factors that play a crucial role in deciding on a company’s operating environment. The recent technology boom has given way to new gadgets, services and products in the global marketplace, where virtually anything and everything can be located on the Internet. Hospitality industry thus poses immense challenge for the companies to provide services keeping in mind the latest trends and standards (Pizam 2010). Role of Information Technology in Hospitality Industry Tours and Travel (T&T) companies are involved in using these technologies for the development of strong customer base and delivering quality services to them to increase their respective profits. The above mentioned technologies are helpful for the T&T companies in seeking benefits from the storing and sharing oriented processes to transfer information over client-server system. T&T companies implement the client-server system (shown in appendix 2) to focus on delivering quality services to customers and gaining indirect benefits from the planned arrangements. Electronic exchange of data and funds is used by the T&T firms to provide easily accessible services to the users and making the transactions easier (Lytras, Carroll and Damiani 2008). Internet and mail technologies are used by T&T companies to complete business functions at the global level in a timely manner. These technologies are helpful for customers in attaining solutions to their queries and seek appropriate set of services. T&T firms gain benefits from these technologies in terms of the enhancement of the business profits and coverage of large base of customers followed by the delivery of quality services. New business opportunities can also be acquired by the T&T companies for the expansion of their products and services portfolio at the global level (Gratzer, Werthner and Winiwarter 2004). Web services are the key source of technologies that provides enormous opportunities to businesses with respect to the sharing of information and provision of services to customers through the sustenance of a collaborative network at the global level to respond on time. These services are helpful in meeting the requirements of the technologically savvy customers and developing customized infrastructure of products and services. Mobile technologies are helpful in enabling the business applications based on effective interaction and communication patterns to coordinate the output with multiple organizations. These services provide standardized platform to the T&T firms to integrate their operations with business partners and ensure development followed by acquisition of higher level of productivity (Mansell and When 1998). Conclusion A common theme that seems to link most organisations in the new century is the uncertainty of the faster pace of environmental change which has subsequently led to increased pressures on managers. The external environmental factors that play a great role in predicting social trends are those political, socio cultural, technological and economical factors that determine the strategic direction in achieving the long-term objectives of the business. Strategies are thereby differentiated through the various levels or departments in the company and implemented in a process of managing change. The outcome is measured by the effectiveness of the strategy by way of customer feedback, improved market position and revenue management. REFERENCES Enz, C. (2009). Hospitality Strategic Management: Concepts and Cases. John Wiley and Sons. Okumus, F., Taylor, J, S. and Chathoth, P. (2010). Strategic Management for Hospitality and Tourism. Elsevier Science. Moutinho, L. (2011). Strategic Management in Tourism. CABI. Scott, N. and Laws, E. (2006). Knowledge Sharing and Quality Assurance in Hospitality and Tourism. Routledge. Kotler, P. et. al. (2008). Marketing for Hospitality and Tourism, 4E. Pearson Education India. Pizam, A. (2010). International Encyclopedia of Hospitality Management. Butterworth-Heinemann Lytras, M. D., Carroll, J. M. and Damiani, E. (2008). The Open Knowledge Society: A Computer Science and Information Systems Manifesto. Springer. Gratzer, M., Werthner, H. and Winiwarter, W. (2004). ‘Electronic Business in Tourism’, Int. J. Electronic Business. Mansell, R and When, U. (1998). Knowledge Societies: Information Technology for Sustainable Development. United Nations Publications Read More