Unit 12 Strategy in Action

1. Unit 12 Strategy in Action

2. Reading

4. After studying this chapter and related materials you should be able to understand: How to prepare a public strategy document Strategists Gender and strategy Backstage considerations for strategy Review of strategy Turnaround strategies Crisis management strategies Concluding issues and critically evaluate, explain and apply the above concepts. Learning Outcomes

5. In 2006 The World Bank published a strategy for the government of Ethiopia Ethiopia in Makeda’s Footsteps: Towards a Strategy for Pro-Poor Tourism Development (World Bank, 2006). The strategy was informed by a working group consisting of both public and private sector representatives and also sought input from independent consultants. The report identified the following key stages in strategy development: Situation analysis. Set strategic and sector objectives. Understand the market. Position product to meet market demand. Develop action plans. Case Study 12: A pro-poor strategy for Ethiopia

6. Cultural Tourism Project, Gondar, Ethiopia

7. A a strategy is a master document which encompasses the main headings of this book and a typical strategy will have the following key parts: Title page Publication details and contents page Introduction / endorsement Executive summary Strategic analysis Mission and objectives Strategy Strategic implementation Appendices Preparation of a Strategy

8. A typical format will be: The external environment The Political Environment The Economic Environment The Socio-cultural Environment The Technological Environment The Competitive Environment Organisational capabilities The resources and core competences of the organisation The performance of the organisation An evaluation of product and services SWOT analysis Strategic Analysis

9. Nature of Business defining the business of the organisation identifying key strategic business units Missions and Goals statement of mission of organisation objectives set Mission and Objectives

10. This part of the document is likely to cover issues such as Generic type of strategy, e.g. Price based Differentiation based Hybrid Directions Methods Strategy

11. This final part of the strategy document will address the two key issues of Organising and resourcing Monitoring change Strategic Implementation

12. Some aspects of strategic thinking will not be available in the public domain. First this may be to restrict access to information that would be advantageous to competitors e.g. Specific targets for take overs. Sales targets. Pricing data. Specific details of product development. Specific details of plans for market penetration Second some of the issues may be too sensitive to be made publically available, e.g. Force field analysis. Job losses Plans for achieving compliance (especially tactics for negotiating with Trade Unions). Backstage Issues

13. There are three main groupings of strategists. These are: Chief executives Strategic planners External consultants. Strategists

14. Two key issues arise relating to gender and strategy. The first concerns the representation of women at strategic levels of management The second relates to any differences in strategic philosophies between the sexes. Gender and strategy

15. Review represents the check phase of the Deming (Noguchi, 1995) cycle of plan – do – check – act which is at the heart of strategic planning and entails assessment of the success of a new strategy Review should be related back to the mission of the organisation and indeed ask whether the mission is still valid. Additionally all strategies are based on assumptions about how the external environment will change in the future. An important part of review should therefore include assumptions testing, that is a regular review that the assumptions underlying a particular strategy still hold. The outcome of strategy review will be action to revise the existing strategy in the light of any new circumstances. Strategy Review

16. Turnaround is defined as the action taken to prevent the occurrence of financial disaster. Key features of successful turnaround strategies include: Act with speed and precision Clear focus on the cause of the predicament Communication of the critical nature of problem to key stakeholders Ensure financial solvency Replacement of CEO Stabilisation of problem Re-engineer Turnaround Strategies

17. Crisis management is the process by which an organisation deals with major, extraordinary, sudden and unforeseen events that can pose a grave threat to their existence. E.g. Natural disasters Technology failures Malevolence. Confrontation Skewed management values Deception Crisis Management Strategies

18. The six main stages in strategic crisis management are 1. Pre-event stage: Prevention and contingency measures are put into place. 2. Pretrial stage: At this stage the impending crisis is inevitable. 3. Emergency stage: The crisis has arrived and main objective is damage limitation, immediate rescue and clear communications. 4. Short term stage: Restoration of basic functions, utilities and essential services to return to normality. 5. Long term (recovery) stage: Continuation of restoration with attention to non-priority actions. Lessons learned incorporated into revised prevention and contingency strategies. 6. Resolution Stage: Routine strategic management replaces crisis management. Crisis Management Strategies

19. Effective strategic understanding is a key element in the successful development of tourism organisations and destinations. However several caveats should be made at this concluding stage. First, to aid understanding, strategy has been depicted as a logical, linear process where we move neatly from stage to stage. In the real world it is a much more messy business. Second, it should be emphasised that the strategy process is a circular one. Note the arrow in the strategy roadmap that links implementation back to strategic purpose showing a continuous process. Strategy should always be under review. Finally it is re-iterated that this set of presentations has essentially taken a classical view of the strategy process. There is considerable debate surrounding reliance on this method and thought should be given to “The contested nature of strategy.” Concluding Remarks

20. Executive summary: A précis of the main features of a strategy. Backstage issues: Aspects of strategy that are not be available in the public domain. Strategists: These include chief executives, strategic planners and external consultants. Gender issues in strategy: These include the representation of women at strategic levels of management and gender differences in strategic philosophies. Strategy review: Assessment of the success of the new strategy. Turnaround Strategy: The action taken to prevent the occurrence of financial disaster. Crisis Management Strategy: Strategy to deal with major, extraordinary, sudden and unforeseen events. Review of Key Terms

21. Discuss which information would be appropriate and which would be inappropriate to include in a strategy document. Distinguish between a turnaround strategy and a crisis management strategy using tourism examples. Discuss the relative merits of using the CEO, a strategy planning department or external consultants as strategists for a tourism organisation. Identify three major recent crises that have affected tourism destinations and discuss common elements for effective crisis management. How does strategy review differ from performance management? Discussion Questions

22. Unit 12 Strategy in Action The End