BME 2:

STRATEGIC MANAGEMENT IN
TOURISM AND HOSPITALITY
What do ‘powerful’ visions look
like?
Conciseness

Clarity

Future orientation

Stability

Challenge

Abstractness

Desirability or ability to inspire

Corporate Objectives
Corporate objectives translate the mission and vision into
specific long-term targets that can usually be quantified and
measured. Corporate objectives are strategic-level objectives that
can be used as a starting point in the setting business and tactical
or operational objectives
Objective writing is a CRIME
C – Communicable – capable of being easily communicated down the line to the workforce and
other internal and external stakeholder groups;

R – Realistic – capable of being achieved within the timescale;

I – Internally consistent – consistent with the overall organizational mission, the operational
objectives and the strategy for achieving the objectives set;

M – Measurable – capable of being quantified so that they can be measured and it is possible to
assess whether the objectives have been achieved;

E – Explicit – written in clear and unambiguous language, precise in relation to both targets set and
to timescale.
Economic Objectives
Economic objectives are those that can be measured in financial ways
In commercial organizations the economic objective is often referred to as the primary
objective, with other objectives being secondary to the achievement of the financial
objective
Return on sales, sometimes referred to as profit margin, is an indication of how well the company has
controlled its costs.
FORMULA: EBIT/Net sales*100= ROS
EBIT- Earnings before interest and Taxes
Net Sales 2,000,000
EBIT: 1,250,00
ROS
Return on assets (or return on capital employed) is an indication of how efficiently the company has used
its investors’ money
How do businesses set objectives?
There are two major approaches.
The stockholder approach
The stakeholder approach.
Stakeholders and Objectives
According to this model, stakeholders can be ‘ranked’ depending upon two variables: the stakeholders’
interest and power.

●● Stakeholder power refers to the ability to influence the organization.

●● Stakeholder interest refers to the willingness to influence the organization. In other words, interest
concerns the extent to which the stakeholder cares about what the organization does.
Service Product Characteristics
There are a number of factors which make services different from physical goods.

These distinguishing factors are:

●● intangibility

●● inseparability

●● perishability

●● heterogeneity

●● ownership
Six Tourism, Hospitality and
Events Characteristics
The specific characteristics only seen in Hospitality Industry.

●● high cost

●● seasonality

●● ease of entry/exit

●● interdependence

●● impact on society: economical, social, environmental

●● the effect of external shocks