University of Lincoln

Strategic Management of Tourism Assignment

CenterParks

by

Stephanie Schütte

Hand in date: 9. December 2002

Question 1: With reference to an organisation of your choice:

A) Identify the main features of its current strategy.

B) Assess the appropriateness of its current strategy in relation to the main strategic challenges, which it will have to face in order to improve or maintain its competitive position in the future.

Organisation Chosen: CenterParcs

Introduction

A key question in strategy research is why companies diverge in their conduct and profitability. Researchers have determined to view companies as autonomous entities, striving for competitive advantage from either external sources, or from internal resources and capabilities. (Gulati/Nohria/Zaheer (2000): 203)

Certainly, the objective of a company′s strategy is achieving competitive advantage, but additionally, the strategy itself is a source of competitive advantage. (Luffman/ Lea/ Sanderson/ Kenny (1996): 102)

The intensifying competition on the "world marketplace" (Wright/ Kroll/ Parnell (1998): 281) is a great challenge for strategic management. Understanding of how technology and globalization affect a company′s competitive positioning and creating global competitive advantage are the most important determinants of strategic management today.

European tourism is forced to respond to the pressure built by the globalisation of travel markets. Travel destinations become more and more remote while travel times become ever shorter. The developed tourism countries are consequently faced with cutthroat locational competition and forced to innovate and to lower prices. It is now widely understood in tourism locations that simply selling landscape, nature or comfortable hotel beds is no longer sufficient.

Adventure worlds, fun parks, visitor centres and theme parks are mushrooming. The objective is to create new attractions for visitors, and especially families with children will find that these facilities offer many advantages: entertainment, amusement and adventure.

Some of these artificial adventure and holiday worlds, such as Disneyland or CenterParcs, have meanwhile developed into so-called mega-tourism projects and are setting new standards in the fight for guests and visitors. Their size permits them to go in for global marketing and to substantially reduce the costs per visitor. The business formula is larger equal less expensive. This formula disregards the follow-up costs caused by growing traffic volumes, noise, accidents, landscape use, and environmental pollution. (Freyer (1998): 117)

Strategic management applies to managerial decisions that fuse the organization to its environment, guide internal activities, and concern organizational long-term performance. The strategy determines markets and products or services, it is about selecting where and how to compete, which organizational structure has to be established, how can employees be motivated, and how to allocate resources to create the greatest overall success. (Houlden (1996): 13; Stahl/Grigsby (1997): 21)

The point of implementing strategy is to fulfil stakeholder expectations in the long term that means to handle the uncertain future. To accomplish this purpose, the strategy has to give consistency and direction to the individual decisions of an organization and should continually be adapted according to environmental change. However, there are no concrete rules to perform this assignment, formulating and implementing strategies base on special techniques, frameworks, concepts and, more or less, on intuition and experience. (Grant (1996): 3; Johnson/Scholes (1999): 10-11)

PART A

"Strategy describes the way that the organisation will pursue its goals, given the threats and opportunities in the environment and the resources and capabilities of the organisation. As suggested by this definition, three factors that have a significant influence on strategy are the external environment, the internal resources, and the goals that are being pursued." "When fundamental changes in the environment, the internal situation, or the goals of the organisation occur, it may be necessary to change the strategy itself. The strategy management process must be in place to ensure continuous re-evaluation of the key elements to determine whether changes are needed." (Byars/Rue/Zahra (1996) : 4-5)

The organisation being studied in this essay, is the European market leader in the provision of short break holidays, operating in the Netherlands, Belgium, Britain, France and Germany, a brief look at the background of this market leader itself is essential.

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