Strategic planning help on : General imperatives of innovation in Tourism Industry

Strategic planning help on : General imperatives of innovation in Tourism Industry

Innovation has been referred to as one of the crucial success factors for any of the industries. This helps the organization in order to maintain its position in the market. Innovation would help in order to improve its existing products which would help Wotif.com to attain sustainable competitive advantage over its competitors.

In case of the tourism industry, innovation would play one of the most important roles by accumulating all new ideas; provide better services to its customers. This would help in order to upgrade the value chain of the tourism industry as well as adopting various patterns which would help in order to encourage the various marketing strategies. In case of tourism as well as hospitality sector, innovation plays one of the most important roles as; this industry has been referred to as one of the most dynamic & an ever changing process.Changes in the patterns of the tourism industry, has been defined as one of the sectors which could be segmented as per the requirements of its customers. This is also known as new tourism whereas on the hand, old tourism has been referred to as the type of tourism which mainly takes into consideration factors such as demographics, work patterns, lifestyles, etc. The most recent change in case of this industry has been in terms of the requirements of the tourists. With an increase in the levels of complexity, the requirements of the tourists have been increasing day by day. This has led to an increase in the levels of tailor made experiences.

Some of the imperatives in case of the Tourism Industry could be discussed keeping mind the various factors such as:

Þ    Change in the patterns of the touristsAs defined above that, new tourism refers to the type of tourism where in one of the sectors which could be segmented as per the requirements of its customers. The needs of the customers could be customized based upon the needs of the same. On the other hand, old tourism has been referred to as the type of tourism which mainly takes into consideration factors such as demographics, work patterns, lifestyles, etc.

The major changes in case of the tourism industry would come into place with the change in the overall market place of the industry. These days, the tourism industry or sector could be seen in a much effective or efficient manner. With an increase in the overall complexity of the industry, the requirements of the customers has been changing & expanding day by day.

Þ    Overall change in the structure of the tourism industry:

This industry has been talked about as one of the industries which has been constantly changing & is quite dynamic in nature. The tourism industry has been regarded as one of the industries which are dominating the other Small & Medium Enterprises in the country. In order to be at the top, the tourism industry specifically the small enterprises should try to be more competitive as compared to the large firms. The tourism sector shall try to attain economies of scale as well as gain certain levels of power which would help in order to increase the effectiveness & efficiency of the same. Reduction in the cost of transactions & increase in the overall output would help in order to play a fair game with its competitors.Restructuring in case of the tourism sector would help in order to become diverse in its industry type. The two major forms with which the organization would be able to diverse themselves would be Horizontal & Vertical. Various products, services as well as marketing strategies should be formulated which would help in order to innovate its products as compared to its direct competitors. One of the examples which would help in order to seek how the companies attain a competitive advantage would be through a merger of all the big travel operators. This would help in order to raise the purchasing power as well as invest to innovate the products being offered to its ultimate customers.

The various new opportunities in case of the same such as change in the technologies being used; various policies, regulatory bodies, liberalization as well as expansion of the entire industry would be quite helpful to practice the innovation process. Attaining economies of scale as well as widening the scope of operations would act as one of the main forces which would help to restructure the entire innovation process.Þ    Encourage new services as well as products which would help in order to attain competitive advantage:

The tourism industry should be encouraged to promote various products or service which would be distinct as compared to its competitors. The different products or services being offered by the organization should be quite specific as well as distinct in nature. This would help in order to increase the overall effectiveness as well as the efficiency of the same.

The major challenge for any of the company would be to introduce different variants of the products or services which would help in order increase the overall output of the organization. Introducing the various products & services would help in order to increase the attractiveness of the industry as compared to its competitors. The expanded or upgraded portfolio of the products in case of Wotif.com would help in order to minimize the risk. In order to minimize the risk of the organization, wide range of products in the organization would help in order to diversify the needs of the consumers.

More number of products or services in the organization would lead to an increase in the level of innovation. This would help in order to create new experiences for the tourists & increase the revenues from the same. Tourism industry refers to the type of industry which employee’s people from varied background.Environmental issues have been one of the major issues & have led to an increase in the overall consumer awareness. This has also led to an increase in the levels of the environmental performance of the same. Some of the areas where in, innovation would be done would be in case of the niche markets i.e. adventure tourism, etc. Rise in the cultural tourism would also lead to an increase in the innovations all across the industry. This would also lead to an increase in the levels of services offered; innovations offered & diversify amongst the various cultures, etc.

2.1.2     How innovation has changed

Improving the performance of tourism enterprises through process innovation

The tourism industry has always been very proactive regarding the adoption of new technologies (e.g. global distribution systems). Recent advances in telecommunications, networking, databases, data processing and electronic marketing provide many new opportunities for tourism business and are significantly impacting  on traditional tourism business  models. The use of information and communications technology (ICT) adds value to  tourism services and  products and supports the development of industry networks and clusters.  ICT covers the whole tourism value chain (e.g. information on destinations, accommodation, transportation, package tours and services) and displays the actual process and availability of such services.

The wide adoption of ICT in the tourism industry  is transforming the role  played  by tourism actors such as travel agents, tour operators, conference organizers, booking agents, etc. On the one hand, ICT systems provide detailed up-to-date information on the availability and prices of products and contribute to increase sales volume and profits.  On the other hand, broad use of the Internet facilitates the direct communication between producers (e.g. hoteliers, air carriers) and consumers, putting into question the role to be played by some travel intermediaries. The application of ICT in the tourism industry inevitably leads to a process of disintermediation and contributes to industry restructuring and innovation.

Consumers are becoming increasingly familiar with the use of ICT in their tourism arrangements. They seek flexible, specialized and easily accessible products and would like to communicate directly with tourism producers. Therefore, tourism enterprises inevitably need to adopt innovative methods to enhance their competitiveness. To take advantage of this ICT revolution, entrepreneurs need to reengineer the entire marketing process of the industry (Buhalis, 1998)

Internet technology offers enterprises and consumers great potential for on-line direct business.

ICT is changing the way travel and tourism services are distributed and is also increasing efficiency, quality and flexibility in the marketing and distribution of tourism products and services. While etourism remains rather  marginal in total tourism turnover for the time being, Internet travel sites demonstrate some of the highest on-line sales performance. Internet distribution of travel and tourism products can generate substantial cost reduction advantages for providers of tourism services but also for consumers. The Internet represents a practical tool for providing the consumer with all the up-todate tourist information on the destination.

For the economy as a whole, there is no doubt that travel and tourism contribute largely to transform internet into economic growth by creating innovative and profitable e-business tourism models.

Improve the internal dynamics of innovation in tourism by pushing firms to  adopt a more proactive attitude towards innovation, notably through a shift from simple technology watch to economic intelligence.

• Improve the efficiency of national innovation systems: improve the training of operators and staff, develop the role of public and  private agents, and stimulate research (e.g. create a genuine multidisciplinary network).

• Improve incentive systems for operators and employees. The extent to which governments can help the business sector become more innovative may be limited. However, they can create favourable framework conditions and  encourage business to enhance productivity through innovation.

• Maintain the coherence of the tourism industry and its linkage with society as a whole. It is not possible to consider innovation in tourism without acknowledging the need to mobilise the local population.

2.1.3     Current levels of innovation at Wotif.comInnovation is at the heart of any successful company’s agenda so it is very worthy of discussion on the role that innovation plays in securing competitiveness. This paper attempts to examine the ways in which tour operators – that is to say the assemblers of packages of travel and accommodation – have approached the issue of innovation and competitiveness. It also reviews, in particular, the fully vertically integrated groups involving travel agents, tour operators, airlines, incoming tour operating ground handlers, and  accommodation (hotels, apartments  and cruise ships). In addition this paper focuses on practical, structural and operational issues encountered by companies competing in this part of the tourism sector.

In the hospitality industry, contemporary organizations are facing increased social and economic change, changes in customer needs, increased competition among hotels, and technological innovations   that are occurring very rapidly. Dealing with these challenges requires looking for ways of cutting costs, improving quality and reputation, gaining flexibility, and becoming more innovative.  Innovation is the companies` proactive response to a changing business environment, and continuous renewal and adaptation is required to stay in business.

Innovations are the result of a complex process involving the generation of creative ideas or insights and putting them into action. It results that the starting point of the process is creativity (i.e. generation of  ideas) and innovation further implies the successful implementation of the creative ideas within the organization (Amabile et al, 1996). The creative ideas and their implementations may be entirely new to the market, or they  may  involve the application of existing ideas that are new only to the innovating organization (or often a combination of both). So, innovations may be incremental, as a succession of individually modest improvements to products or services over their life cycle, or dramatic and new ones.

The scientific literature puts into light some specific features of the innovation process in the hospitality industry, such as:

− A strategic weapon for innovations for successful organizations is developing and launching new and successful services; such hospitality service developments range from true innovations, which are totally new and with an entirely new market, to fairly minor modifications of existing service (e.g. swipe cards instead of keys).

− Despite their importance,  knowledge about how to achieve success in being innovative and developing new services seems to be limited (Johne and Storey, 1998). As a result, managers often rely on feeling, speculation, and their own limited experience about the keys to innovation success (Ottenbacher and Gnoth, 2005).

− The innovations in this sector of activity  are mostly intangible in nature, which makes it difficult to be monitored and evaluated. The success or failure of the hospitality industry innovations is not the result of managing one or two activities well, but the result of a large number of aspects that have to be managed competently and in a balanced manner. For example, in the hospitality industry, the core service that is offered is important; however this is not considered to be the key success factor, because the success of new services largely depends on the customers perceptions and on the ways in which the interaction with the customer is shaped and managed with empathy and effectiveness (Ottenbacher and Gnoth, 2005).

2.2 Part 2: The organization’s vision & strategy for innovation

2.2.1 Components of vision

2.2.2 Difference between innovation strategy & corporate strategy

2.3 Part 3: Context, competencies & culture of innovation

2.3.1 Necessity of innovation

Innovation has been referred to as one of the crucial success factors for any of the industries. This helps the organization in order to maintain its position in the market. Innovation would help in order to improve its existing products which would help Wotif.com to attain sustainable competitive advantage over its competitors.

The necessity of innovation could be seen in the tourism industry due to the following reasons. The reason could be clubbed under the following sub headings such as Market, people, external forces as well as financials of the same.

Þ    The first reason as to why innovation should be practiced is to maintain a competitive position in the tourism industry.

Þ    To sustain in the most effective as well as competitive environment.

Þ    To improve the overall functioning of the tourism industry.

Þ    To defend the overall market share of the tourism industry.

Þ    To possess sustainable competitive advantage amongst its competitors.

Þ    Reposition the tourism industry as well as up lift the entire market share.

Þ    To widen it scope of improvement, different avenues as well as have a limited potential.

Þ    Uplift the position in the market.

External Forces

Þ    To subsidize the level of competition

Þ    To rely upon the various rules & regulations stated by the legislation.

Þ    Influence the competitors by taking into consideration the various marketing strategies by the company i.e. Wotif.com.

People

Þ    To attract more number of staff & people as compared to its competitors.

Þ    Retain high range of people form varied backgrounds

Þ    Kindle the members of the staff by providing them with the most challenging g work.

Þ    Encourage the people working in the organization to accept the work load

Þ    To practice high levels of stability within the organization

Þ    Maintain healthy relations with the alliance or partners

Financials

Þ    To increase the levels of the shareholder’s returns

Þ    Increase productivity

Þ    Increase the levels of margins

Þ    To pursue high levels of funding

2.3.2 Aspect which the organization currently support

2.3.3 Crucial factor which supports innovation

2.4 Part 4: Learning for innovation

2.4.1 Avenues for learning

2.4.2 Continuous innovate & change

2.5 Part 5: Potential change management issues

2.5.1 Potential change process

Bolman & Deal’s 4 frame Model:

The Bolman & Deal’s 4 frame Model for change management would help the Wilder’s Departmental Store in order to learn as well as implement the four major frames in the organizational structure (Pryor, Taneja, Anderson & Singleton, 2008). The four major structures which would be covered under this framework would help the enterprise in order to implement one of the methodological approaches which would help them in order to adopt leadership & development approaches.

The four major frames covered under the Bolman & Deal’s 4 frame Model are as follows:

Þ    Structural Frame

Þ    The Human Resource Frame

Þ    The Political Frame

Þ    The Symbolic Frame

Þ    The Structural Frame:

The first framework under the Bolman & Deal’s 4 frame model refers to the structural frame. This framework highlights the various structural aspects of the wilder’s Departmental Store. The structural framework would help in order to achieve all the possible goals & objectives of the organization (Pryor, Taneja, Anderson & Singleton, 2008). With the help of the structural framework, division of labor, coordination amongst the employees, enhanced efficiency & effectiveness would help the departmental store to achieve all its targets. The major criteria to be considered into the structural framework would be to achieve the goals & the overall objectives of the organization.

Þ    The Human Resource Frame

The second framework covered under the Bolman & Deal’s 4 frame model refers to the human resource frame. Under the human resource frame, the following aspect would be kept in mind such as behavior, energy, attitude, skills, etc. This resource frame would help the departmental store in order to take away all the credit which would help in order to increase the attitudes, experiences, awards, etc. This would help in order to encourage the talent of the people as well as energize their behavior as well as attitudes. The human resource framework would help in order to assume the following things such as serve the organization serve the needs of the permanent or potential customers as well as gather the various opportunities (Pryor, Taneja, Anderson & Singleton, 2008).

Þ    The Political Frame

The third type of framework under the Bolman & Deal’s 4 frame model would be the political frame. It would help in order to accept as well as adopt power & conflict in the organization. This framework would help the organization i.e. Wotif.com to take into consideration the following aspects such as beliefs, information (Woodruff, 2011), values, interests & perceptions of reality. The most crucial decision would be involved in order to allocate resources, conflict amongst the central role of the enterprise, negotiate as well as searching for the position amongst the various stakeholders (Pryor, Taneja, Anderson & Singleton, 2008).

Based upon the framework of Bolan & Deal, the political frame would focus majorly upon the strategy as well as the various tactics which should be taken into consideration. Another aspect which has been taken into consideration refers to the role of power.

Þ    The Symbolic Frame

The last type of framework which is under the Bolman & Deal’s 4 frame model refers to the symbolic frame. The symbolic frame would take into consideration the various symbols which would help in order to act more powerful. This framework would help in order to resolve all the conflicts as well as practice problem solving, face uncertainty, and provide direction (Woodruff, 2011).

2.5.2 Overall change process:

Barriers in Managing Change

There are many models for systematically managing change processes. So why are there problems in successfully implementing change?

It is a well-known insight that top management support is one of the critical success factors for any change effort. If top management does not buy in – why should anybody else? Nevertheless, there are some more barriers that could hinder successful change:

 Barriers of Perception

·         Stereotypes in analysis: We see what we expect to see.

·         Difficulties to identify and to analyze the core of the problem / the real cause of the problem.

·         Too narrow scope of the problem: Problems are approached with a one-sided view that focuses on particular aspects only.

·         Lacking ability to see all sides of the problem.

·         Information overload: Difficulties to distinguish between relevant data and available data.

·         Misjudgments: People think they take into consideration all data they can get hold on; however, they actually do not really exploit all information that is available.

Perceptual problems most often occur during analysis of the own situation (internal analysis, identification of internal weaknesses) and during evaluation of options. This may lead to a sub-optimal solution that does not really tackle the causes of the problem. The result is a waste of resources – in terms of financial resources, time and commitment.

 Emotional Barriers

·         Risk-aversion: Fear to make mistakes or to fail.

·         Lack of ability to process incomplete or contradictory information: Solving complex problems is never easy. Incomplete information may lead to an elimination of promising ideas.

·         Preference to evaluate existing ideas instead of generating new ideas. Early evaluation of suggestions may sort out creative ideas. Early ideas often base on incomplete information. That makes it easier to reject them. Normally people find it much easier to come up with reasons for rejecting an idea than with reasons for supporting and idea.

·         Not taking time for thinking: In many projects, people are not able to lean back and think about a problem because they feel under pressure to deliver results quickly.

2.5.3 Barriers & enablers to change:

There are mainly two barriers which would create a problem to enable an appropriate change in the organization i.e. Habit &Rebellion. The two barriers have been discussed as follows:

Þ    Habit:

According to one of the famous writers, Habit has been defined as Habit which could not be changed with stipulated time. It is a fact that, we all are creatures of God who posses certain habits either negative or positive. This aspect acts as one of the major barriers to change in the organization. This refers to one of the ways through which various unproductive as well as waste less process could be seen.

Þ    Rebellion

Rebellion refers to the second barrier which could be seen while enabling the change in the enterprise. It should be seen that, the main players in the organization should perform their roles in the best of their manner. This would help in order to act upon the various changes. Rebellion would create negativity in the enterprise which would lead to an unsuccessful change in the organization.

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