Introduction
Strategic management can be defined as the kind of management that involves managerial decisions and actions that establish the performance of the company in the long term. This kind of management involves evaluating current and future business environment, formulating a strategy with regard to that knowledge of the environment, implementing that strategy and performing evaluation and controls in the keeping with the specific strategy . Therefore, this kind of management involves a thorough evaluation of the external opportunities presented to the company as well as threats to its operation. Once this kind of business operational environment has been highlighted, the management makes decisions in order to maximize shareholder interest. This paper evaluates the concepts of strategic management and its implementation in contemporary business environment in the field of tourism.
`
The new chairman of Marks and Spencer is said to be ‘a safe pair’ of hands as he takes over the running of the company from Sir Stuart Rose. The new chairman has been appointed on the basis of his competitiveness in a very harsh business environment. He brings along 33 years of experience from the investment banking sector with new spirit to take the company to a new competitive level. This he intends to do in a well structured strategy, a new kind of strategic management. He is a renowned business dealer with an eye for the future of trends in the world of corporate business. He is hailed for closing several corporate form sales at Pilkington and P&O that set remarkable records. He was also in the team that saw the takeover of Chelsea Football Club by the Russian billionaire Roman Abramovich (Prosser, 2011).
Marks and Spencer is a fashion house with a long history and a remarkable line of product. The new chairman probably has no taste in fashion; therefore some might argue that the new management may have misplaced decisions and priorities (Prosser, 2011). However, with a proper strategy the new chairman is poised to making a lot of success in the new business.
Strategic management and concepts
As earlier stated, strategic management is the systematic decision making by the management to evaluate future opportunities and threats and make decisions that maximizes such opportunities for the future of the corporation (Leibold, Probst and Gibbert, 2007). However, before any such a strategy is formulated there are three things that could make strategic management impossible. First if the corporate continues to grow in size without planning, then it would impossible to foresee the future size of the company. Secondly, the layers of management should not increase as it would increase the bureaucracies of the organization. And finally, the environment should be discernible enough to provide a succinct evaluation for planning purposes.
David (2010) illustrates that a strategic management is usually initiated by several factors. An introduction of a new chief executive is one of the main initiators of a new strategic management policy. A second initiator of a strategic policy may be an intervention by an external institution. Threat to change of ownership may initiate also initiate a strategic policy. Investors may buy common shares of the firm and this kind of threat may trigger a new strategic policy. Finally, if management recognizes that there is a gap in the performance of the company, then this might initiate a new strategic policy.
According to Fred (1997), Nag, Hambrick and Chen (2007) a good strategy can only be developed in four phases. The first phase is the basic financial planning. In that company should work in a manner that seeks operational control so as to meet its budget. The second phase is the planning for the future in a forecast manner that seeks to evaluate the position of the company beyond next year and the other year. The third is an externally oriented plan. In this case the company should maximize the external environment by seeking to increase its responsiveness to competition. Finally, once the competitive environment has been determined, then the organization can plan future responses in a meticulous strategic management process.
Strategic Management in Tourism
Today, the tourism industry is one of the most dynamic businesses the world. New players in the field have brought about one of the most fierce business competition ever experienced. New markets led by the oil-rich Middle East countries have introduced new kinds of tourism venture. Tourism in the Gulf of Arabia has shifted from sites and museums to new world technology such as man-made islands and 21st century entertainment (Hitt, Ireland and Hoskisson, 2010). Additionally, the Asian countries are emerging as new and bold players in tourism characterized by aggressive marketing and business incentives for investor. China is known provide incentives to tourism business especially hotels and airlines especially in places such as Macau and Chengdu (Enz, 2009).
Moreover, new products now dominate the tourism sector. Eco-tourism and urban tourism are the new leading trends in the world of tourism. Experts argue that, the old tourism models did not fail; rather they were too slow in keeping up with the new market demands . Nowadays, tourists are more concerned with enjoying a holiday in more eco friendly destination.
Therefore, strategic management has evolved to be the most important tool in helping businesses cope with dynamic and extremely complex tourism market. To keep the competitive edge, companies have made the management process less bureaucratic and more flexible. In the past, companies simply developed a competitive position and defended that position. Today however, companies are developing strategies that would help them develop new products that would keep them in the market. A good strategic management policy should provide the company with a directed means of long term commitment in developing and nurturing crucial resources. The strategy should also make the company a learning organization in that once the company learns of the future market trends, then such insight should be reflected in the operations of the company.
For instance, in the next few years, the major events of the world are shifting from developed economies to the developing countries. The next two World Cup tournaments held by the Federation Internationale de Football Associations (FIFA), world soccer governing body, will be held in developing countries . The World Cup is known to be single event with the largest number of visitors with highest revenues. Other major events such as Formula One and Grand Prix are now hosted by emerging economies. With this information in mind, local companies and international corporations should work towards tapping this potential in emerging economies . Tourism is constantly shifting and adapting is now a must.
Corporate Concentration Strategies in Tourism
This logical strategy is especially good for a business that enjoys a good competitive advantage in an attractive industry. For instance, service provided in the tourism industry such as obtaining exotic cuisine can be left to a supplier. However, if such cuisine is getting new trends in the market, getting the cuisine under company ensure best prices as well as quality of product. In the tourism sector, hotels and airlines are known to exist in chains having operation spanning several countries. Taking over such operation may provide the form with control over its operation.
The second kind of concentration strategy is referred to as horizontal integration. This kind of integration determines the degree to which a firm operates in multiple locations . Vertical integration suggests that a corporation should a clearly stipulated plan on how to invest in several locations. Is also direst the management on which location to lay off investment from. This means there are three ways on how the management can approach horizontal strategic management. That is, the company can pursue expansion endeavors with caution. Secondly, the management can decide to lay off investment in non-profitable location. And finally, in light market information, the company can maintain the level of investment in multiple locations.
Conclusion
Strategic management is new kind management that provide corporate with a new for the future. Understanding the underlying environment becomes the basis of developing policies that guide a company in attaining future growth in a complex environment. Tourism is one such business whose environment is under constant changes. Today, emerging economies are posing a serious threat in term of new markets and incentive to investor and tourists alike. Tourism plays a key role in the socio-economic development of communities and these calls for efficient strategies to ensure that this happens and is sustained. Developing future and sustainable tourism activities will largely depend on the current processes and activities and it calls for strategic choices that will promote efficiency and lead to a mutually beneficial relationship between consumers, providers and other external stakeholders who are affected by tourism activities. Globalization and technology has shifted the manner in which tourism firm operate. A firm may chose to adopt an investment strategy in which firms invest in new markets. On the hand, a firm may chose to streamline its current operations and limiting contracted services from other firms. This ensures that the firm saves on operation costs at the same time ensuring quality. Adapting to this new kind of doing business will keep the firm on a steady path.
References
Alkhafaji, A. F. (2003). Strategic management: formulation, implementation, and control in a dynamic environment. London : Routledge.
David, F. R. (2010). Strategic Management: Concepts. New York: Prentice Hall.
Dobson, P., Starkey, K., & Richards, J. (2004). Strategic management: issues and cases. New Jersey: John Wiley & Sons.
Enz, C. A. (2009). Hospitality Strategic Management: Concepts and Cases. New York: John Wiley and Sons.
Fred, R. D. (1997). Concepts of strategic management. New Jersey: Prentice Hall,.
Gronroos, C. (1994). “From marketing mix to relationship marketing: towards a paradigm shift in marketing. Management Decision, Vol. 32, No. 2, , 4-32.
Hill, C. W., & Jones, G. R. (2007). Strategic Management: An Integrated Approach. New Jersey: Cengage Learning,.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2010). Strategic Management: Competitiveness & Globalization, Concepts. Boston: Cengage Learning,.
Leibold, M., Probst, G. J., & Gibbert, M. (2007). Strategic Management in the Knowledge Economy: New Approaches and Business Applications. New York: John Wiley & Sons.
Moore, M. H. (2002). Creating Public Value: Strategic Management in Government,. Cambridge: Harvard University Press.
Nag, R., Hambrick, D. C., & Chen, M. (2007). What is strategic management, really? Inductive derivation of a consensus definition of the field. Strategic Management Journal. Volume 28, Issue 9 , 935–955.
Prosser, D. (2011, Jan 05). The Business On Robert Swannell, Chairman, Marks & Spencer . Retrieved Feb 07, 2012, from http://www.independent.co.uk/news/people/news/the-business-on-robert-swannell-chairman-marks-amp-spencer-2176089.html
Sadler, P., & Craig, J. C. (2003). Strategic management. Toronto: Kogan Page Publishers.
Wright, P. L., Kroll, M. J., & Parnell, J. A. (1998). Strategic management: concepts. New Jersey: Prentice Hall.
Wright, T. (1993). Strategic Management Concepts. New Jersey: Prentice Hall PTR.
