PART I. European directions of strategic development of tourism
1.4. Model of monitoring of the strategy of development in the tourism
The necessity of considering regionalization in formal and actual actions regard-ing strategic development of the European tourism sector appears to be obvious.
Generally speaking, the European tourism sector consists of diverse tourism sub-sectors of 27 UE member states. They differ in terms of culture, society, business, natural environment and historical traditions. However the country level is still not sufficiently homogenous for initiating effective practical actions aiming at improving tourism sector competitiveness, since tourist products are created and sold to tourists locally and regionally. Certainly, the tourist product of Spanish Catalonia vary from Norwegian Arctic Circle and industrial tourist products of the German Ruhr region, but also Polish Masuria, Cracow or Slovak terma and caves. There’s no doubt that research in the tourism sector competitiveness should encompass – besides the European tourism sector’s level – also national, or at least, regional levels (referring to NUTS 2 in Eurostat classification) in particular countries.
Current challenges facing contemporary European tourism imply an obvious question on a tourism sector competitive potential, which is necessary in order to survive the crisis.
Monitoring of the Polish tourism sector competitiveness has been systematically conducted since 2003 by the research team of the Department of Management in Tourism at the Jagiellonian University led by one of the authors of this book. Up
1. The background for the European strategy for tourism development
to date research has been conducted in two stages covering the periods 2003–2005 and 2006–2009.13
The first stage monitoring research revealed, that in the period 2003–2006 tour-ism sector in Poland was characterized by the following features:14
Entrenched dominance of micro, small and medium tourism enterprises.
– Small correlation between the rise and the development of SMEs and support – from local public organizations.
Family roots of entrepreneurship in tourism.
– Independent development of private entrepreneurship in tourism.
– High share of grey market.
–Advantageous changes in the tourism business environment in Poland, such as actual inclusion of Poland into the structures of the European Inner Market (2004), activation of subsequent tranches of European funds, globalisation of markets and tourism enterprises’ strategies as well as revolutionary development of ICT caused the need for more detailed, analytical research of competitive potential of the tour-ism sector on the regional level (voivodeship level).
The next stage of the research in competitive potential was conducted between 2006 and 2009, though based on a modified model. The modification of model parameters resulted from important changes in every area of the tourism sector environment. In 2008 the Marketing strategy for Poland in the tourism sector was prepared; it constituted the basis for marketing support of the tourism sector.
What is more, from 2008 signals of the forthcoming economic crisis had emerged, a crisis, that could have influence on incoming tourist flow, and budgets of people in travel – both leisure and business ones. The dusk of the first decade of the 21st century in Poland was marked by important social changes: increased mobility and migrations of Polish citizens. Incoming tourism flow was influenced by political and formal changes, like the Schengen agreement, resulting in the rise of barriers for travelers from post Soviet, non-EU countries. It was particularly important and painful for northern and eastern Poland. Furthermore dramatic changes referred also to the rise of the scale and scope of ICT applications in the tourism sector – especially those that are mobile and Internet based. Additionally, Poland experi-enced unpredictable catastrophic phenomena (destructive hurricanes and floods) which had negative effects on tourism in some voivodeships. The outlined aspects of the tourism sector environment’s changes proved the necessity for modifying the
13 Results of the first stage were published in a book entitled Competitiveness of small and medium enterprises on Polish tourism market [Bednarczyk M. (ed.), Przedsiębiorczość w gospodarce turystycznej opartej na wiedzy, Fundacja dla UJ, Kraków 2006] and they constituted a founda-tion for the research conducted in the period 2006–2009. [Bednarczyk M. (ed.), Zarządzanie konkurencyjnością biznesu turystycznego, CeDeWu, Warszawa 2011].
14 Bednarczyk M. (ed.), Przedsiębiorczość w gospodarce…
concept of monitoring of the tourism sector competitive potential. From a broader perspective, we included the need for building a regional knowledge capital and increased importance of competences in SMEs with regard to innovation and ICT application. I adopted particular research model, structure of which is presented on fig. 1. The model was foundation for the research in which we monitored the tourism sector competitive potential in Poland in the second period (2006–2009).
The monitoring action was concentrated on small and medium enterprises, because they constitute the economic background and foundation of the tourism sector and – at the same time – the primary element of the regional tourism economy in Poland. However, the economy is not influenced by single and isolated business enterprises and objects of their environment. What counts here is the synergic ef-fect of cooperation between all the regional organizations and institutions: tourist enterprises, public administration (both governmental and self-governmental), business self-government, and other entities from the business environment as well as the local community. It is the foundation for effective shaping and commerciali-zation of tourism products based on the local knowledge potential, which, in turns, results in an increase of competitiveness of the whole tourism region.
Fig. 1. The model of monitoring of the tourism sector competitive potential in a knowledge- -based economy
Source: Bednarczyk M.
KNOWLEDGE-BASED TOURISM ECONOMY
External competitiveness levers
Cooperation
Internal competitiveness levers
Local environment
of tourism business Management system
in tourism SME
Regional environment – financial support – workforce accessibility Macro environment
Competencies in tourism small and medium enterprises – knowledge management – innovativness
– ICT utilisation Inertia of public administration
and bussines self-government Competence gap in tourism SME
Effectiveness of strategic knowledge-based economy
1. The background for the European strategy for tourism development
According to the presented model, the factors of SMEs’ competitiveness were grouped according to the location of source influencing the rise and fall of their competitiveness. As a result the two main groups of competitiveness levers were formed: internal and external ones. The external factors encompassing the quality of determinants that shaped local business environment were classified as external levers of SME competitiveness. The internal factors covering the competitive poten-tial built within management systems were classified as the internal levers of SME competitiveness. Both the internal and external levers could contribute to the rise or fall of SMEs’ competitiveness. The measure of the external levers effectiveness was the inertia level of entities from the business environment. For simplification reason the most important ones were chosen for the model: public administration (both governmental and self-governmental) and business self-government. On the other hand the measure of the internal levers was a level of competency gap within SME.
Considering the specificity of SME management as well as imperative of their cooperation with local governmental administration, as well as with public and business self-government in the creation of tourist products based on local knowl-edge potential, 27 competitive factors were identified. They were clustered in 8 col-lective categories: 5 external and 3 internal ones. With regard to the external levers the measure was the environment entities inertia in the following areas: coopera-tion, co-creacoopera-tion, collaboracoopera-tion, access to qualified and competent workforce and to the external sources of financing. On the other hand the internal levers were measured by competency gap level in the following areas: knowledge management, innovativeness and ICT utilization. Evaluation of both – inertia and competency gap – was conducted in a certain scales within the lever’s subareas. The research instrumentarium consisted of: surveys, interviews, expert panels and desk research.
The detailed results were described in the book entitled Management of tourism business competitiveness within regions, edited by one of the authors book (M.
Bednarczyk).15
The proposed model for monitoring of the tourism sector competitive potential is universal in character i.e. it can be applied in the environment of different tour-ism sectors, where the sector structure is dominated by micro, small and medium enterprises.16 However the model should be adjusted to the particular business conditions by specifying the external levers i.e. conditions of the regional busi-ness environment, region features, and their scaling. As far as the internal levers are concerned, it seems necessary to conduct individual scaling of particular SME competencies.
15 Bednarczyk M. (ed.), Zarządzanie konkurencyjnością…
16 Definition of micro, small and medium enterprises is coherent with the UE recommendation, Commission Recommendation 2003/361/RC of 6 May 2003.
The research results gathered with the use of the presented model can be applied in the first place by institutions of regional tourism business environment (govern-mental and self-govern(govern-mental public administration and business self-government) for the sake of shaping regional tourism policy. The achieved results are also of high importance for tourism enterprises, as they may constitute a foundation for restructuring business competencies in contemporary conditions of the global tourism market.
Increase of competitiveness of European tourism in the global tourism market depends on the competitive potential of tourism SMEs and the effectiveness of cooperation platforms between them, the public sector and other stakeholders on European, country, regional or local level. Both dimensions supporting the develop-ment of sustainable and competitive European tourism are important and clearly visible on the formal and institutional level of the European Union.
PART II
Strategic directions for tourism
development: a case of Slovakia
1. The background for the European strategy for tourism development
1. Theoretical approaches of strategic
management research and its implementation in tourism
Tourism is a dynamic sector that requires cooperation of both the private and public sector. To this point arise the following questions: how to identify suitable ways to manage a sector that lacks a stable organisational structure and what management tools to apply. It is no longer questionable that management theories and strategic management theories are applicable not only in company management, but also in the management of various organisational entities with different legal forms and internal structures. Strategic management is an answer to the dynamically changing external environment. In the recent decades, the internal environment of all economic sectors has significantly changed, too. The development of strategic management has therefore gradually advanced from long-term planning to stra-tegic planning and later to strastra-tegic thinking. In developed countries, this process has led to the transformation of business environment into the phase known as knowledge-based economy.
Positive outcomes of tourism policy in different countries in Europe and across the world demonstrate the successful application of strategic manage-ment in tourism theory and practice. Tourism policy has thus become a tool that enforces the application of strategic management with the foremost out-come – the strategy. Prior to strategy development are: mission formulation, ob-jectives formulation, internal and external environment analysis, determination of strengths, weaknesses, threats and opportunities. These strategic management components are present in different documents of national or regional institu-tions with an influence on tourism management. Therefore, we have decided to pay particular attention to this field, in order to emphasize its factual signifi-cance in regard to a correct approach towards the specific strategy of tourism development.
1.1. Schools of thoughts and content of strategic management
The theory of strategic management principles was formulated as an answer to the existing managerial problems of large companies. These were in need to ensure stability not only through traditional, well-established tools and methods, but also in a long-term perspective. Globalization and internationalization have vigorously influenced rapid and dynamic changes of the external environment and have led to the advancement of competition into superb competition. The necessity to establish stability by implementing strategic management tools has become the most significant reaction towards dramatic changes of the external environment.
The authors that have promoted the application of strategic management from the company sphere to various organisational structures and economic sectors include H. Ulrich, K. Bleicher, and Fk. Ferner. In their works, the term company has been replaced by more general terms: organisation, purpose-oriented social system or tourism organisation. In relation to tourism, strategic management is perceived as the determination of basic long-term organisation objectives, means of their accomplishment and allocation of resources inevitable for their execution.17
Strategic management in tourism is established on the national, regional, lo-cal (destination) and company level and it is a process that involves research of market conditions, customer needs and identification of wishes, determination of strengths and weaknesses, specification of social, political and legislative conditions of entrepreneurial activities, resource availability that might generate opportunities or threats.18 It can be stated that the strategic plan elaboration includes collecting relevant information from the organisation’s environment, determining mission, objectives, strategies and portfolio plan.
There is a crucial difference between short-term and long-term objectives in practice. Short-term oriented management, taimed at accomplishment of finan-cial objectives results in the neglecting of long-term objectives. Such a managerial concept may lead to stagnation that may further progress to a closedown of the organisation.
The outcome of the strategic management application is the strategy of an organisation (a strategic plan). The perspective of its real fulfilment depends on the involvement of the individual elements in relation to the internal and external
17 Gúčik M. a kol., Krátky slovník cestovného ruchu, Ekonomická fakulta UMB, Banská Bystrica 2004, p. 127.
18 Donelly J.H., Gibson J.L., Ivanicevich J.M., Management, Grada, Praha, p. 23.
1. Theoretical approaches of strategic management research and its implementation in tourism
environment. It must be taken into consideration what factors represent an influ-ential driving force in the sector.
Strategic management compared with strategic planning interconnects the strategy with its implementation.19 Assessment and control play a crucial role in strategic management, since the latter initiates potential alternations in the strategy implementation or even formulation, conditioned by radical changes of the envi-ronment. Strategic management puts demanding requirements on line managers who are responsible for strategy formulation, implementation and control.
Strategic management in comparison with strategic planning is rather a proc-ess with significant features such as continuity, compactnproc-ess and internal unity of objectives. A strategic planning failure was mainly caused by underestimation of strategic procedures realization, organisation’s insufficient involvement in the strategy and rapid changes of the environment that had led to out-of-date strategies.
Strategic planning thus experienced a gradual loss of its credit.
Current perception of strategies is predominantly regarded as a process oriented approach that is rather informal, creative and without strict planning. Organisations with favourable internal environment have managed to generate strategies even without a formalised process or planning department within their structure. These strategies have become recognizable in the form of several interlinked decisions that recorded certain achievements.
Strategic management at the same time represents an active form of identify-ing gaps in the market that have the potential to gain a better competitive market share. The application of strategic management in tourism is based on a crucial finding that the origin of strategic management is closely related to the existence of system theories. Tourism system theory has become a dominant basis for the further theoretical research in tourism and for the tourism practice. Tourism has been significantly influenced by the existence of tourism system theory for over twenty five years. Strategic management is therefore solidly incorporated in the tourism theory fundamentals. Thus, further development, implementation and control of strategic management processes are necessary. According to H. Ulrich, general system theory is a formal science about structure, links and behaviour of a specific system.20 The author perceives the system as a unity of various elements with mutual links or with the potential to establish mutual links. Further explana-tion of the term tourism system is provided by M. Gúčik.21
19 Papula, J., Strategický manažment, Ekonomická Univerzita, Bratislava 1993, p. 18.
20 Kaspar C., Management im Tourismus. Eine Grundlage für die Führung von Touristikunter-nehmungen und – organisationen, Paul Haupt, Bern 1995, p. 7.
21 Gúčik M. a kol., Krátky slovník…, p. 127.
1.2. Strategic thinking, mission and objectives formulation
The formulation of strategic management mission, objectives and vision is preceded by the analysis of the internal and external environment, as mentioned before. This problem is thoroughly elaborated in management, strategic management, market-ing and strategic marketmarket-ing scientific literature. Because of this fact, we will not pay particular attention to this area of strategic management.
Strategic management and system theories are linked to strategic thinking that is in particular characterised by the freedom of entrepreneurial activity, pre-dominant interest in the maximisation of consumer’s personal utility and feasibility conditioned by rationality and ability to influence its environment. These elements should be actively present and dominant in the development strategy of domestic tourism in Slovakia. The consumer – the tourist – has an array of alternatives to choose from, simultaneously, strategy developers must be able to influence the ex-ternal environment. M. Gúčik also draws attention to this fact, while emphasizing that it is possible to influence the impact of the external environment on tourism, providing the tourism system is united and its units cooperate.
The principles of strategic thinking outline the ways of analytic thinking that are intended to facilitate the strategy formulation which is supposed to assure prosperity even in uncertain conditions. It is advisable to perceive these principles coherently; otherwise, an isolated approach causes inefficiency. Major principles of strategic thinking are variation, continuity, system approach, interdisciplinar-ity, creativinterdisciplinar-ity, time management, feedback oriented thinking and risk taken into account. The variation principle expects the existence of strategy alternatives (vari-ants) that will come in play if possible changes of the external environment oc-cur. The key concept of the continuity principle lies in the need of a permanent strategy formulation and correction. The system approach is based on the complex comprehension and assessment of individual effects. Interdisciplinarity involves a combination of different scientific disciplines. Creativity is a typical feature of strategic thinking and it is driven by innovative ideas. Time management develops the ability to focus on important tasks and to filter out the less important ones.
Feedback-oriented thinking is significant in regard to the processes and changes that appear inside the organisation and that influence its strategy, so that indi-vidual phases of the strategy cannot be considered as closed. In addition, Z. Souček perceives strategic thinking in terms of exact, intuitive and aggregate thinking.22
22 Souček Z., Strategické řízení, SNTL/Alfa, Praha 1986, p. 20–50.
1. Theoretical approaches of strategic management research and its implementation in tourism
The author emphasises the need to determine aggregate indicators of the strategy rather than detailed indicators typical for tactical and operational managing.
Š. Slávik perceives strategic thinking as the opposite of linear and mechanical thinking that tends to come up with repetitive and verified solutions and follow already proven patterns.23 Based on the provided characteristics and definitions of strategic thinking, we may conclude that it is the contrary to the tendency of being satisfied with the objectives that rely on the safe past and neglect risks. Strategic
Š. Slávik perceives strategic thinking as the opposite of linear and mechanical thinking that tends to come up with repetitive and verified solutions and follow already proven patterns.23 Based on the provided characteristics and definitions of strategic thinking, we may conclude that it is the contrary to the tendency of being satisfied with the objectives that rely on the safe past and neglect risks. Strategic