Where are we now?

The initial stage in the creation of a strategic management plan for tourism deals with an analysis of internal, as well as external factors which affect the organization. Internally, this includes an evaluation of the firm’s business units, performance, trends, products, services, resources, processes and systems. On the other hand, external analysis provides a view of the company’s market positioning, geographical scope, target markets, suppliers, buyers, competitors, stakeholders and other external forces which can impact the business (Kotler, Bowen & Makens 2006). A management tool commonly used to conduct an integrated examination of internal and external factors is the SWOT analysis, which explores the strengths and weaknesses (internal) as well as the opportunities and threats (external) of the business (Hudson 2008).
In the process of analysing these factors and their impacts on the organization, ICT provides the company with relevant information through internal databases, network linkages and internet resources. In the case of Continental Airlines’ strategic plan, internal analysis revealed the company’s negative position in terms of profitability, necessitating a 20% reduction in flights and lay-off of 20,000 workers. Their IT operations proved to be disorganized, with an old IBM mainframe and 45 CRM systems causing major technical problems. At that point in time, Continental’s management realized that their unreliable information systems failed to provide valuable information to enable them to segment their market as to customer type and value. Despite these weaknesses, Continental’s IT team composed of 350 technical staff was considered as an advantage in its human resource pool. Among the external drivers which significantly affected the company were the 9/11 terrorist attack and the SARS outbreak which sent the demand for air travel down. In addition, the rising cost of fuel, currency rate fluctuations and stiff competition drove airline companies to negative profitability and bankruptcy. A competitive scan also showed how competitors are taking the pricing strategy, as evidenced by the entry of low cost carriers and the move of other airlines to drastically cut down airfares. Using ICT to access internal and external information, the company was able to evaluate its position and map out its strategy to survive competitively in the airline industry.
Aside from the travel sector, other tourism organizations use ICT extensively to explore market opportunities for their strategic initiatives. Dubai, for instance, recognizing that the oil industry cannot be an enduring economic driver, felt the need to diversify the economy by riding with the fast-growing global ICT industry. Capitalizing on its liberal economic policies and regulations, it offered tax-free ownership to foreign corporations, stringent cyber regulations and easy registration and licensing. Similarly, Carnival Corporation, a cruise company, identified the growing need for access to high-speed internet and advanced voice and data services, allowing them to satisfy communication requirements of employees and guests.
Irregardless of the type of product or service offered by companies within the tourism systems framework, ICT is are instrumental in providing executive management with information to support the development and implementation of strategy (Buhalis & Licata 2002). By providing information on internal and external forces affecting the organization, ICT plays a vital role in establishing the company’s current position and determining how it can achieve competitive advantage.


References:

Buhalis, D & Licata, M 2002, ‘The future E-Tourism Intermediaries’, Tourism Management, Vol. 23 Issue 2, June 2002, pp. 207-220.

Buhalis, D 2003, E-Tourism: Information Technology for Strategic Tourism Management, Pearson Education Limited, Essex.

Hudson, S 2008, Tourism and Hospitality Marketing: A Global Perspective, SAGE Publications Ltd., London.

Kotler, P, Bowen, J, Makens, J 2006, Marketing for Hospitality and Tourism, 4th Edition, Pearson Education International, New Jersey.