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Welcome toCompetitive
Tourism DestinationConceptual Models Developed to enhance CompetitivenessDr. Myrza Rahmanita, SE, M.Sc
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COMPETITION AND THE TOURISM DESTINATION
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The idea of the competitive destination contains two elementsDestination and Competitiveness
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DESTINATION
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COMPETITION
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Elements of destination competitiveness
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Effects on destination competitiveness
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After you have knowledge about elements idea of the competition, next you will learn model competitive forces of M. Porter.
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What isModel Competitive Forces
of M. Porter?
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MODEL COMPETITIVE FORCES OF M. PORTER
The price-competitiveness approach of Dwyer, Forsyth and
Rao
The Bordas demand model
The WES approachThe Poon concept
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The conceptual model of destination competitiveness of
Ritchie and Crouch
The ‘Porter diamond’, or the determinants of competitive advantage
The competitive forces and generic strategies of M. Porter MODEL
COMPETITIVE FORCES OF M. PORTER
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MODEL COMPETITIVE FORCES OF M. PORTERThe competitive forces and
generic strategies of M. Porter1
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MODEL COMPETITIVE FORCES OF M. PORTERThe ‘Porter diamond’, or the
determinants of competitive advantage
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MODEL COMPETITIVE FORCES OF M. PORTER3 The Poon concept
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The WES approach( Exchange rate currency X in currency units Y)
MODEL COMPETITIVE FORCES OF M. PORTER4
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MODEL COMPETITIVE FORCES OF M. PORTER4The WES approach
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The Bordas demand model
MODEL COMPETITIVE FORCES OF M. PORTER5
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• EC= economic/monetary cost (transportation, costs at the spot)• PhC= physical cost (tiredness
and stress)• PsC = psychological cost
(commercial and physical risk)• PuC = purchasing costs or cost
to get access to information and to the trade)• MS= magnetism of the sales
system (capacity of the sales
system to create interest in the destination and capability to attract customers)• CS= conductivity of the system
or the capacity to close a sale (which percentage of customers who were in contact with the sales system, decided to buy the destination)• PSSE= post-sale service
efficiency (creating loyalty and recommendation).
MODEL COMPETITIVE FORCES OF M. PORTER6
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MODEL COMPETITIVE FORCES OF M. PORTER7 The conceptual model of
destination competitiveness of Ritchie and Crouch
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MODEL COMPETITIVE FORCES OF M. PORTER8
MODEL COMPETITIVE FORCE OF M.PORTER
The price-competitiveness approach of Dwyer, Forsyth and RaoPrice competitive index = X
For further explanation see The Economic of Tourism Destinations page 125
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The threat of entrantsNew entrants may stimulate more price competition, or more attention may be paid to product differentiation as they attempt to win market shares.
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2The power of suppliers It is dominated by a few companies
(there is a degree of monopoly or oligopoly) and is more concentrated than the industry it sells to (e.g. air charter companies relative to tour operators)
The industry is not an important customer of the supplying group
The group’s product is differentiated, or it has built up switching costs
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2The power of suppliers The group’s product is an
important input to the buyer’s business (e.g. flight costs for a tour operator)
The group poses a credible threat of forward integration (e.g. an air carrier starts a tour-operator’s business)
There are high costs of switching suppliers.
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The power of buyers■ If a buyer group purchases large volumes relative to seller sales (the UK tour operator business in Benidorm and other resorts in Spain relative to the local hotel sector is a typical example)■ If the products a buyer group purchases from a sector are standard or undifferentiated (e.g. hotel rooms)
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The threat of substitutesThe threat of substitutes can take very different forms.
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Competitive Rivalry■ There is slow sector growth■ There are high storage costs or perishability■ There are high fixed costs■ There is lack of differentiation
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Competitive Rivalry■ There is a high strategic stake (to be successful in one market)■ There are numerous or equally balanced competitors■ There is over-capacity or big changes in capacity■ There are high exit barriers.
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COMPETITIVE FORCES APPLICATION TO THE CARRIBEAN
The threat of new entrants New seaside resorts in Caribbean countries – Cuba is only one example
The power of supplers Air carriers from the USA with regular flights to thedifferent countries in the Caribbean
The power of buyers The bargaining power of cruise carriers for mooring inthe individual countries
The threat of substitutes The Caribbean destinations have many competitivedestinations in Central America and the Canary Islands
Competitive rivalry The competition between destination is great, due toundifferentiated supply, overcapacity in severaldestinations and perishability of supplied products
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Marketing startegy
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DESTINATION MANAGEMENT
4. Information/research Competition and the tourism destination
3. Quality of service experiences (the destination should provide a high-quality visitor experience)
2. Marketing (traditional marketing tasks)
1. Organization (administrative and managerial tasks)
5. Human resource development
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DESTINATION MANAGEMENT 8. Resource stewardship
(taking care of the tourism resource base)
7. Visitor management (e.g. visitor information centre, ability to deal with crowds)
6. Finance and venture capital
9. Crisis management.
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Synthesis of the main variables