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CHAP 3 Internal analysis of tourism & hospitality businesses - Coggle…
CHAP 3
Internal analysis of tourism & hospitality businesses
1. Overview of internal analysis
Purpose:
provide managers with effectiveness of current strategies and resources deployment; strengths and weaknesses
Components
resource analysis;
competence identification and analysis;
internal activities analysis using Porter’s value chain analysis;
financial resources and financial performance;
products and their position in the market.
2. Analysing resources
Resources
Inputs employed in the activities of the business
Resources are the productive assets owned by the firm
Broad categories
human resources (employees, junior, middle and senior management, board directors)
financial resources (the amount and type of finance available to the organization)
physical resources (e.g. buildings, equipment, stock, land, materials);
operational resources (e.g. aeroplanes, ships, coaches, computers, machine.);
intangible (reputation, goodwill, patents, legal rights, brand names, registered designs, licences)
Analysing resources
By specificity
Specific resources: industry-specific knowledge, skills, software, tools, labour, …
Non-specific resources: more flexible and form the basis of competencies
By performance
Internal measure of performance: objectives, targets, comparisons...
External measure of performance: comparisons with industry, competitors, company
By category
physical resources
financial resources
human resources
intangible resources
3. Competence, core competence and competitive advantage
Competence
General skills and knowledge of business and management
Specific skills and knowledge of hotel/restaurant/tour operators
Technology: specific and non-specific
Relationships: customers, suppliers, local community, investors/shareholders, authorities, …
Ways to obtain: training, recruitment, cooperation, management contracts,
Core competence
Prahalad and Hamel (1990): The distinctive knowledge, capabilities and skills of a firm that differentiates it from its competitors
Cannot be imitated or exploited by competitors
Conditions for a ‘competency’ being classified as ‘core’
Competitive advantage
Factors that enable a firm to outperform its competitors
Relevant to SWOT framework
A differentiation or cost leadership strategy
4. VRIO check
Value:
A resource or capability must be relevant to the KSFs in the market.
Rarity:
If a resource or capability is widely available within the industry, it may be necessary in order to compete but it will not be a sufficient basis for competitive advantage
Imitability:
unable/difficult to imitate by competitors
Organizational capability
to exploit the resource/competence
5. Value chain analysis
All activities (primary and support activities)
Core activities and their relationships to core competencies and current strategies
Effectiveness and efficiency of each activity
Linkages between activities for added value
Blockages reducing competitive advantage