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An exploratory study ofcompetitive strategies amonghotels in a small developing

Caribbean state

姓名 :丁柏豪

學號 :MA2M0106

Cristina Jonsson and Dwayne Devonish

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Introduction

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Introduction(1/3)

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).

The objective of a company’s strategy is to achieve competitive advantage, but additionally, the strategy itself is a source of competitive advantage (Luffman, Lea, Kenny, & Sanderson, 1996).

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Introduction(2/3)

Caribbean tourism is forced to respond to the pressure built by the globalisation of travel markets.

Tourism-dependent countries like the Caribbean Islands are consequently faced with aggressive locational competition and forced to innovate and to lower prices. Simply selling landscape, nature or comfortable hotel beds is no longer sufficient, and it is vital for the accommodation sector in the region to increase competitiveness through competitive strategies.

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Introduction(3/3)

Strategy is about ensuring the survival and prosperity of a firm (Grant, 2005) .

This study attempts to identify similarities and/or differences in competitive strategies pursued among hotels operating in Barbados, a small developing island state in the Caribbean.

It examines differences in the extent to which various competitive strategies are applied across a variety of organisational demographics.

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The research context

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The research contextBarbados’s tourism industry

1. Barbados is one of the Southern-most islands in the Eastern Caribbean.

2. The country has a small, open economy driven by external forces and has a long-established tourism industry dating as far back as the 1940s.

3. Barbados has very few natural resources, tourism continues to receive increased attention as an important sector of the Barbados economy and has provided a much-needed boost to the country’s economy.

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Literature review

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Literature review(1/7)MacMillan (1983) defines “strategic initiative” as the ability t

o capture control of strategic behaviour in the industries in which a firm competes.

Competitive strategy is one that specifically directs an organisation in gaining a competitive advantage above its rivals (Porter, 1986).

Competitive strategies have been classified into three types:

1. Cost reduction2. Innovation3. Quality-enhancement (Schuler & Jackson, 1987).

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Literature review(2/7)

It has been argued that all three strategy types can be used simultaneously to gain domestic and international competitive advantage, regardless of industry.

Others argue that there is only one essential factor in determining a competitive advantage - i.e. the ease with which competitors can enter or expand in a given market (Greenwald & Kahn, 2005).

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Literature review(3/7)

Regardless of what strategy is implemented and used, the strategy has to be understood by employees at all levels of the company.

The key question is whether the strategy, product features, add-ons, and value creation lead to ultimate customer satisfaction.

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Literature review(4/7)

Past studies have used different sets of criteria to investigate the various aspects of a firm’s competitive strategy.

One example is a study by Vandermerwe, Lovelock & Taishoff (1994), in which several different aspects of strategy were designed to investigate the strategic use of firms’ resources to meet changing customer expectations.

The criteria used in their study were:

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Literature review(5/7)

1. Differentiation of market offerings

2. Mobilisation of people and partners

3. Leveraging information technology to deliver value

4. Minimising costs

5. Building of efficient service delivery systems

6. Defining service standards and performance

7. Reliance on local versus expatriate staff

8. Delivering services across countries

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Literature review(6/7)

The present study will seek to address this concern by measuring competitive strategies across various organisational demographics among hotels, based on these criteria put forward by Vandermerwe et al. (1994).

Organisational demographics have been argued to be important determinants in competitive strategy research.

Hence, the main research questions of the study are as follows:

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Literature review(7/7)1. RQ1. Is there relationship between ownership type of a hotel (foreign

versus locally owned) and the use of various competitive strategies?

2. RQ2. Is there relationship between the size of hotel and the use of various competitive strategies?

3. RQ3. Is there relationship between business structure of a hotel (private limited, public limited and sole trader, etc.) and the use of various competitive strategies?

4. RQ4. Is there relationship between the ratings of a hotel (one-star, two-star, three-star, etc.) and the use of various competitive strategies?

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Method

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Method(1/6)

Survey instrument and measures

A structured questionnaire was developed to serve as the main data collection tool in the study.

This questionnaire comprised 72 closed-ended and two open-ended questions.

The first section of the questionnaire sought relevant demographic information from the respondent hotels such as type of business structure,ownership structure,organisational size and hotel (quality) ratings.

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Method(2/6)

In terms of the dependent variables, a popular measure was used to capture various aspects of an organisation’s competitive strategies.

This approach highlights nine different areas on which an organisation’s competitive strategy can be based.

These strategic areas included:

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Method(3/6)1. Cost competitiveness2. Mobilizing people and partners3. Building service delivery systems4. Differentiating market offerings5. Delivering services across cultures6. Defining service standards and performance7. Reliance on expatriate versus local staff8. Meeting customer expectations9. Leveraging information technology to deliver value

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Method(4/6)

These strategic areas were operationalised, in the second section of the instrument,using 43 Likert-scaled items, with response options ranging from 1 (strongly disagree) to 5 (strongly agree).

Based on these items, respondents rated the extent to which their hotel focused on each of these nine competitive strategies.

Higher scores on each scale indicated higher importance attached to a particular strategy adopted.

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Method(5/6)

Sample and data-collection procedures

Given the small size of the current hotel population in Barbados (n=69), all hotels were targeted to participate in the study.

Questionnaires were sent to persons who were human resource managers, general managers or managing directors within the sample of hotels.

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Method(6/6)

• Data were obtained from 35 of the 69 hotels surveyed, indicating a 51 per cent response rate.

• The majority of the respondents surveyed were private limited hotels (75 per cent), and locally owned (57 per cent).

• In terms of size, there were roughly equal proportions of small (35 per cent), medium (30 per cent) and large (35 per cent) hotels in the sample.

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Results

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Results(1/3)

Descriptive statistics and reliabilities

• Reliability analyses (Cronbach’s α) were computed on the nine measures of competitive strategies.

• The factor measuring “reliance on local versus expatriate staff” obtained a very low reliability estimate (α = 0.11) and was subsequently dropped from the analysis.

• Eight competitive strategy types were used in the final analysis.

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Results(2/3) “Leveraging information technology to deliver value” (M =3.85), “di

fferentiating market offerings” (M =3.82), and “building service delivery systems” (M =3.77) were ranked as the most important competitive strategies used in the total sample.

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Results(3/3)Hotel demographics and competitive strategies

Hotel ownership type, size, business structure, and hotel ratings (quality of hotel) were examined as the main independent variables.

The results revealed that there were no statistically significant differences on the eight competitive strategies measured in terms of ownership type, size, and business structure.

When the hotel ratings variable was examined, a statistically significant difference was revealed on one form of competitive strategy – defining service standards and performance (F= 2.68, p <0.05).

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Discussion

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Discussion

The study revealed, with the exception of hotel ratings, that hotel demographics were not significantly related to the type of competitive strategies adopted.

Hotels in the five-star and higher category placed substantial strategic focus in the area of defining service standards and performance, compared with hotels in the one-star category.

Given the view that hotels with higher ratings rely upon their reputation for service and customer satisfaction to be profitable (Mullins, 1996) and are likely to demonstrate a stronger preference for providing and improving their standards and level of performance.

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References

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References(1/2)Gulati, R., Nohria, N. and Zaheer, A. (2000), “Strategic networks”, Strateg

ic Management Journal, Vol. 21 No. 3, pp. 203-15

Grant, R.M. (2005), Contemporary Strategy Analysis, Blackwell, Oxford.

Greenwald, B. and Kahn, J. (2005), Competition Demystified – A Radically Simplified Approach to Business Strategy, Portfolio, New York, NY.

Luffman, G.A., Lea, E., Kenny, B. and Sanderson, S. (1996), Strategic Management: An Analytical Introduction, 3rd ed., Blackwell, Oxford.

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References(2/2)MacMillan, I.C. (1983), “Seizing competitive initiative”, Journal of Business S

trategy, Vol. 2 No. 4, pp. 43-57.

Mullins, L.J. (1996), Management and Organizational Behaviour, Pitman, London.

Porter, M. (1986), Competitive Strategy, Harvard Business School Press, Boston, MA.

Schuler, R.S. and Jackson, S.E. (1987), “Linking competitive strategies with human resource management practices”, The Academy of Management Executive, Vol. 1 No. 3, pp. 207-19.

Vandermerwe, S., Lovelock, C. and Taishoff, M. (1994), Competing Through Services: Strategy and Implementation, Prentice-Hall, Hemel Hempstead.

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Thank you for your attention