3 rd Edition Strategic Management In Tourism

1. CABI TOURISM TEXTS 3rd EditionStrategic Management In Tourism Editedby LUIZ MOUTINHO AND ALFONSO VARGAS-SÁNCHEZ COMPLIMENTARY TEACHING MATERIALS

2. CABI TOURISM TEXTS CHAPTER 20 NEW STRATEGIC DEVELOPMENTS IN TOURISM ALFONSO VARGAS-SÁNCHEZ AND LUIZ MOUTINHO

3. CABI TOURISM TEXTS LEARNING OBJECTIVES • Make understand the necessity of a new strategic thinking in the current business environment. • Present the main guidelines of the expected future of business, and the strategic implications of this scenario. • Emphasize the importance of an ethical approach, and how Corporate Social Responsibility has adopted this role.

4. CABI TOURISM TEXTS 1 INTRODUCTION Traditional strategic thinking argues that greater market share equals greater profit. But bigger is not necessarily better; in many cases, it can actually be worse. Not all growth is good. In fact, some growth actually destroys value, as we can detect in overcrowded tourist destinations as a result of an uncontrolled mass tourism (where is the limit?), and with little or no attention to their carrying capacities. Obviously, these undesirable situations should lead to new priorities in a new wave of tourist planning. The market share approach is dead, and it has been replaced by a different one based on value share.

5. CABI TOURISM TEXTS 2 THE FUTURE OF BUSINESS: STRATEGIC IMPLICATIONS Strategic change is inevitable, and of a disruptive character, being that the tourism industry is not immune of this kind of changes. What are the key forecasts to 2030 for emerging technologies, social trends, and wild cards? What are the possible impacts? To guide business managers to survive in the jungle of a future very hard to explore and to understand, the findings of the TechCast Project are suggested: http://www.techcastglobal.com/

6. CABI TOURISM TEXTS 2 THE FUTURE OF BUSINESS: STRATEGIC IMPLICATIONS There is a ‘perfect storm’ of change on the horizon, and in this context leaders in the tourism industry, and in general, are being challenged about the future adaptive strategies for their organizations. Only within the 4Ps framework these new strategic directions can be conceived nowadays: profit, people, planet and purpose. In the tourism industry is evident the process whereby people look for a purpose for their leisure time, meaningful or transformative holidays. Therefore, successful brands will be those that understand and balance those Ps.

7. CABI TOURISM TEXTS 2 THE FUTURE OF BUSINESS: STRATEGIC IMPLICATIONS Certainly, in a VUCA – Volatile, Uncertain, Complex and Ambiguous – business environment, an agile management approach is essential. Regular adaptation, trust, communication and efficiency are the primary facets of agility. Our age of anxiety is, in great part, the result of trying to cope with the current environment and future society with yesterday’s paradigms, concepts, techniques and tools. Nowadays, experimentation is the new planning, an evolving portfolio of strategic experiments (or experiences when talking about tourism).

8. CABI TOURISM TEXTS 3 CORPORATE SOCIAL RESPONSIBILITY (CSR): A STRATEGIC ISSUE Sustainable development has become a business dimension that requires to be managed strategically. This means that every company needs to have senior managers who hold appropriate values for facing the challenges deriving from their operations and capabilities for establishing an organizational culture of ethical and responsible behaviour at all levels. CSR is currently one of the burning business topics, not only in academic circles but also in the management of corporations and in organizations that represent corporate and business interests; in the tourism industry as well.

9. CABI TOURISM TEXTS 3 CORPORATE SOCIAL RESPONSIBILITY (CSR): A STRATEGIC ISSUE The application of CSR principles is shaking the foundations of traditional management, to the extent that the responsibility of the company is now assumed to go much beyond the maximization of profits and the rendering of account for its activities to its owners. In fact, this is even being referred to as the paradigm of the 21st century. Social responsibility is now being utilized as a parameter for evaluating and comparing the performance of organizations. In many consumer product markets, as in tourism, there is now a recognized niche for socially responsible products, although these are still only of secondary importance.

10. CABI TOURISM TEXTS 3 CORPORATE SOCIAL RESPONSIBILITY (CSR): A STRATEGIC ISSUE Observing the principles of CSR represents the demonstration of an ethical approach to business demanded by society, and there is no turning back. When ethical behaviour is adopted and put into action by tourism company leaders, this new culture, based on the search of a trade-off among the various stakeholders, must be built on mutual trust, so transparency is essential for this trust to exist. Only in this way will CSR become a key competitive factor with a recognized role as an intangible resource that generates sustainable competitive advantages.

11. CABI TOURISM TEXTS 4 CONCLUSION • In a scenario of unprecedented changes for their speed, scale and scope, the search for strategic agility is one of the most important challenges. • How companies learn to regenerate strategy is the key issue today. To do so, they have to move without inertia from strategic insight, to execution, and back to strategic insight. • Another great challenge to deal with this scenario is the understanding of the new ethical dilemmas to be faced by business leaders. At the end there are people, and their values will be critical for making responsible decisions, under the CSR framework.