Strategic Management is the set of decisions and actions that result in the formulation and implementation of plans designed to achieve the goal of the organization (Pearce and Robinson 2000).According to Pearce and Robinson 2000, the components of strategic management for a successful plan are as follows: Mission of the company: It describes about the product, market, and technological areas of emphasis in a way that reflects the values and priorities of the strategic decision makers. The mission statement expresses how the organization is going to contribute to the society. Internal Analysis: This is the analysis of the internal environment of the organization, such as financial, human and other resources. Furthermore, the strength and weakness of the company and organizational structure are also assessed to come up with the better future plan. External Environment: This contains the remote environment, such as economic, social, political, technological and ecological; the industry environment, such as Entry barriers, supplier power, buyer power, substitute availability and competitive rivalry; and the operating environment, such as competitors, creditors, customers, Labor and Suppliers.
Strategic Analysis & Choice: The assessment of external environment and the company profile enables the organization to identify an attractive opportunities for investment. These opportunities are screened and the best opportunity is selected. Long-Term Objectives: Profitability, Return on Investment, competitive position, technological leadership, productivity, employee relations, public responsibility, and employee development are evaluated for a successful plan. Generic and Grand Strategies: Low cost and Differentiation are generic strategies applied by the manager. Grand strategies are applied for long term; and some of the approaches are concentration, market development, product development and innovation.
Action Plans and Short-Term Objectives: The generic and grand strategies are translated into action. Functional Tactics: The business identifies and undertakes the unique activities to its function to help build a sustainable competitive advantage. Policies That Empower Action: The policy allowing decisions to be made whenever possible at the lowest level of the organization. Restructuring, Reengineering, and Refocusing the organization: The structure, leadership, culture and reward systems are designed to suit the requirements of the strategies. Strategic Control and Continuous Improvement: During the implementation process the control is required until the time the goal is achieved. And simultaneously the continuous improvement in the strategy is required due to the trend in the global market.
Tesone (2006) also suggests that a good information plan should have the following components: 1. Examination of external and Internal Environment, 2. Analysis of Strengths and weaknesses, 3. Articulation of Mission Statement, 4. Development of Action Plans, 6. Setting Objectives and 7. Management of Objectives
Buhalis (2003:43) states that the strategy is the top management’s plan to attain outcomes consistent with the organization’s mission and goals. He believes that strategic planning and management requires the entire range of strategic issues of the organization. He has identified the stages of strategic management for appreciating how Information communication technology can contribute to the competitiveness of organizations. They are: Where are we now? Evaluate the existing situation: Buhalis (2003) suggests that this stage is the time when the existing situation is evaluated before developing plans for improvement. This stage includes the collection of competitive intelligence. The techniques used to know about the competitiveness in these stages are situation analysis, strategic business unit’s analysis, future analysis, demand and supply analysis, external and internal analysis, competition analysis, stakeholders mapping and SWOT (strengths, weaknesses, opportunities and threats) analysis. Where do we want to go? Identify strategy and their strategic objectives: In this stage, he states that once the situation is analyzed and understood, organization then identifies the strategy and their strategic objectives. This stage starts with the mission statement, which describes the direction, vision, activities, competencies and business scope. The organizations scrutinize all the strategic option and opt for the best one keeping in mind the long term aspect of the business. The techniques used in this stage are the mission statement, strategic options, strategic choice and portfolio management and strategic business units’ review. How do we get there? Implementation of strategy:
Buhalis(2003) mentions that a set of tasks, programs and objectives are put in place to ensure the implementation of strategy. Furthermore, the resources are allocated, timetables are drawn and people are recruited to undertake the action plan. He suggests that the organization should be able to adapt to changes brought by the Information and communication technologies. Strategic direction, portfolio analysis and adjustment, implementation, strategic alliances, tactical planning and budgeting are few techniques which are carried out. How do we know we got there? Comment and control: The author describes this stage as the feedback and control stage. This stage aims at addressing the changes in the external environment and at improving the implementation process to combat the unpredictable situation. The techniques used in this stage are control and feedback, setting of indicators and incorporate feedback and reaction mechanisms.
Krizman, Sehanovic and Sehanovic (1998) in their article, management of Information systems in catering and tourism claim that the information technology in tourism sector is required for managing internal aspect of the business, for example staff issues and control, and external environment, like marketing, competition and customer.
Therefore, a good strategic management plan should contain the above factors. The analysis was done for four companies, who were into tourism and hospitality industry and following observations were made:
Jet Airways was found investing in the information technology to manage the internal and external aspects of the business, especially with regard to customer satisfaction, competition, technical, administration, accounting and control. Further, Ritz-Carltons hotel’s strategic plan for customer satisfaction was achieved through the use of information technology. Starwood hotel & Resorts was using the information technology like websites to provide the multiple access point for the services and products that they offered to satisfy the customer and to sustain in the competitive market. lastly, Amadeus, one of the largest computer reservation system providers was found using Information Technology to book air tickets, hotel rooms, train tickets, car service, and cruise ship tickets. Amadeus was into distribution of products and services to the ultimate customer through global networking. It was found that all the four companies were spending on information technology most importantly to satisfy the customer so as to achieve competitive advantage and strengthen their competitiveness.
Finally, as stated by Buhalis (2003: 31), it was found that the Information Communication Technologies is becoming very important strategic consideration in the business, as its strategies based on innovative and dynamic management can provide the business with competitive advantage.
References:
Buhalis, D. 2003, eTourism: Information Technology for Strategic Tourism Management, Pearson Education Limited, UK
Krizman D., Sehanivic, I. and Sehanovic J 1998, The Management of Information Systems in Catering and tourism (Online ), Available: http://www.efst.hr/management/Vol3No2-98/sehanovic.doc (Accessed 18 November 2009)
Pearce, John A. & Robinson, Richard B. 2000, Strategic Management: Formulation, Implementation and Control, 5th Edition, pp 3, McGram Hill, USA
Tesone, D. V 2006, Hospitality Information Systems and E- Commerce, Wiley, USA
Strategic Analysis & Choice: The assessment of external environment and the company profile enables the organization to identify an attractive opportunities for investment. These opportunities are screened and the best opportunity is selected. Long-Term Objectives: Profitability, Return on Investment, competitive position, technological leadership, productivity, employee relations, public responsibility, and employee development are evaluated for a successful plan. Generic and Grand Strategies: Low cost and Differentiation are generic strategies applied by the manager. Grand strategies are applied for long term; and some of the approaches are concentration, market development, product development and innovation.
Action Plans and Short-Term Objectives: The generic and grand strategies are translated into action. Functional Tactics: The business identifies and undertakes the unique activities to its function to help build a sustainable competitive advantage. Policies That Empower Action: The policy allowing decisions to be made whenever possible at the lowest level of the organization. Restructuring, Reengineering, and Refocusing the organization: The structure, leadership, culture and reward systems are designed to suit the requirements of the strategies. Strategic Control and Continuous Improvement: During the implementation process the control is required until the time the goal is achieved. And simultaneously the continuous improvement in the strategy is required due to the trend in the global market.
Tesone (2006) also suggests that a good information plan should have the following components: 1. Examination of external and Internal Environment, 2. Analysis of Strengths and weaknesses, 3. Articulation of Mission Statement, 4. Development of Action Plans, 6. Setting Objectives and 7. Management of Objectives
Buhalis (2003:43) states that the strategy is the top management’s plan to attain outcomes consistent with the organization’s mission and goals. He believes that strategic planning and management requires the entire range of strategic issues of the organization. He has identified the stages of strategic management for appreciating how Information communication technology can contribute to the competitiveness of organizations. They are: Where are we now? Evaluate the existing situation: Buhalis (2003) suggests that this stage is the time when the existing situation is evaluated before developing plans for improvement. This stage includes the collection of competitive intelligence. The techniques used to know about the competitiveness in these stages are situation analysis, strategic business unit’s analysis, future analysis, demand and supply analysis, external and internal analysis, competition analysis, stakeholders mapping and SWOT (strengths, weaknesses, opportunities and threats) analysis. Where do we want to go? Identify strategy and their strategic objectives: In this stage, he states that once the situation is analyzed and understood, organization then identifies the strategy and their strategic objectives. This stage starts with the mission statement, which describes the direction, vision, activities, competencies and business scope. The organizations scrutinize all the strategic option and opt for the best one keeping in mind the long term aspect of the business. The techniques used in this stage are the mission statement, strategic options, strategic choice and portfolio management and strategic business units’ review. How do we get there? Implementation of strategy:
Buhalis(2003) mentions that a set of tasks, programs and objectives are put in place to ensure the implementation of strategy. Furthermore, the resources are allocated, timetables are drawn and people are recruited to undertake the action plan. He suggests that the organization should be able to adapt to changes brought by the Information and communication technologies. Strategic direction, portfolio analysis and adjustment, implementation, strategic alliances, tactical planning and budgeting are few techniques which are carried out. How do we know we got there? Comment and control: The author describes this stage as the feedback and control stage. This stage aims at addressing the changes in the external environment and at improving the implementation process to combat the unpredictable situation. The techniques used in this stage are control and feedback, setting of indicators and incorporate feedback and reaction mechanisms.
Krizman, Sehanovic and Sehanovic (1998) in their article, management of Information systems in catering and tourism claim that the information technology in tourism sector is required for managing internal aspect of the business, for example staff issues and control, and external environment, like marketing, competition and customer.
Therefore, a good strategic management plan should contain the above factors. The analysis was done for four companies, who were into tourism and hospitality industry and following observations were made:
Jet Airways was found investing in the information technology to manage the internal and external aspects of the business, especially with regard to customer satisfaction, competition, technical, administration, accounting and control. Further, Ritz-Carltons hotel’s strategic plan for customer satisfaction was achieved through the use of information technology. Starwood hotel & Resorts was using the information technology like websites to provide the multiple access point for the services and products that they offered to satisfy the customer and to sustain in the competitive market. lastly, Amadeus, one of the largest computer reservation system providers was found using Information Technology to book air tickets, hotel rooms, train tickets, car service, and cruise ship tickets. Amadeus was into distribution of products and services to the ultimate customer through global networking. It was found that all the four companies were spending on information technology most importantly to satisfy the customer so as to achieve competitive advantage and strengthen their competitiveness.
Finally, as stated by Buhalis (2003: 31), it was found that the Information Communication Technologies is becoming very important strategic consideration in the business, as its strategies based on innovative and dynamic management can provide the business with competitive advantage.
References:
Buhalis, D. 2003, eTourism: Information Technology for Strategic Tourism Management, Pearson Education Limited, UK
Krizman D., Sehanivic, I. and Sehanovic J 1998, The Management of Information Systems in Catering and tourism (Online ), Available: http://www.efst.hr/management/Vol3No2-98/sehanovic.doc (Accessed 18 November 2009)
Pearce, John A. & Robinson, Richard B. 2000, Strategic Management: Formulation, Implementation and Control, 5th Edition, pp 3, McGram Hill, USA
Tesone, D. V 2006, Hospitality Information Systems and E- Commerce, Wiley, USA
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