Chapter 1 Introduction to Hospitality Strategic Management

Jeffrey S. Harrison, Cathy A. Enz (2004) Hospitality Strategic Management : Concepts and Cases. John Wiley and Sons.

CO1 On successful completion of the course, student will be able to : Describe strategic management concept and theories

Contents • A historical perspective on Hospitality Industry • Definition of Strategic Management • Effective Strategic Management • Stages of Strategic Management • Importance of Strategic Management • Strategic Management Model • Benefits of Strategic Management • Effective strategic managers .

island. historical events (terrorism attack etc. economy lodging. car rental. mid-scale. heterogeneous. cruizes. restaurants) • Travel & tourism industry (airlines. integrated business. non-commercial : government. military.) • Driven by innovation. F&B. tour operator) • Food service industry (commercial. university) • Accommodation or lodging industry (luxury. hospitals. perishable and intangible • Provides largest employment opportunities • Involves human capital • Affected by environmental forces such as nature (weather.) Unique characteristics of the industry • Services are immediately consumed (perishable). alpine resorts etc. travel agents.A historical perspective on Hospitality Industry • Hospitality industry (accommodation. diseases). technology and entrepreneurial ventures .

and evaluating. crossfunctional decisions that enable an organization to achieve its objectives Strategy Definition A comprehensive and integrated plan to ensure long-term success by seizing opportunities while minimizing the impact of potential threats .Strategic Management Definition Art & science of formulating. implementing.

financial. technology) • • • • . information.Effective Strategic Management • • • • Future oriented decisions Strategic Managers are proactive Understanding of the changing environment Implementation is integrated and affecting other functions Need for top management involvement Need for visionary leadership Need for all employees to be involved in implementation process Organization-wide allocation of resources (human.

Strategy Formulation Vision & Mission External Opportunities & Threats Internal Strengths & Weaknesses Long-Term Objectives Alternative Strategies Strategy Selection .

Strategy Implementation Annual Objectives Policies Employee Motivation Resource Allocation .

Strategy Evaluation Internal Review External Review Performance Metrics Corrective Actions .

Importance of Strategic Management Process .to achieve sustainable competitive advantage 1. Effectively formulating. implementing & evaluating strategies . Adapting to change in external trends. internal capabilities and resources 2.

R&D. Fin/Acct. Evaluate.Comprehensive Strategic Management Model External Audit Formulation of Vision & Mission Long-Term Objectives Generate. CIS Measure & Evaluate Performance Internal Audit . Select Strategies Implement Strategies: Mgmt Issues Marketing.

Steps in Strategic Management Process • • • • • • Environment Analysis Establishing Organizational Direction Strategy Formulation Strategic Decision or Choice Strategy Implementation Strategic Control .

Benefits of Strategic Management Financial Benefits • Improvement in sales • Improvement in profitability • Productivity improvement • Quality improvement .

Benefits of Strategic Management Non-Financial Benefits • Provides clear direction and objectives • Improved understanding of competitors strategies • Enhanced awareness of threats • Reduced resistance to change. prepare for threats • Facilitates the allocation of resources . minimizing risk • Enhanced problem-prevention capabilities • Identify new opportunities.

Strategic Managers • • • • • • • CEO President Vice President Chairman Board of Directors Managers Everyone in the organization .

Effective Strategic Managers • Aware of any changes in the environment • Anticipate and response to changes • Clear directions of where the organization is heading • Aware of the resources and its limitation • Looks ahead for future betterment of Strategic Management .

Key Strategic Management Questions • What kind of business should we become? • Are we in the right industry? • Are there new competitors? • What strategies should we pursue? • How are our customers changing? • Will the changes in environment affect the way we do business today? • Is our profit sustainable in the future? .