What does strategic management mean to widen in hospitality management? Hotels and restaurants are among the most competitive businesses in the world. The hospitality Industry primarily consists of businesses that provide accommodation, food and beverage, Or some combination of these activities. Hospitality businesses provide services, which differ From tangible products because they are immediately consumed and require a people – intensive Creation process.
They differ from other service establishments by providing for those who are In the process of traveling away from home in contrast to local residence, although restaurants Often serve both travelers and local guests. The offering of an experience is also becoming an Important component of hospitality. In addition, a wide range of business structures exist in Hospitality, such as direct ownership by chains, franchising, asset management, and consortia. Today, the hospitality industry has become more complex and sophisticated, with a movement Away from the “ mine host ” (i. . , a view of hospitality in which the host personally and socially Entertains visiting guests) and the cost – control frameworks of the past to a more strategic view Of the business, in both investment and operations domains. “
Travel and tourism ” is a broad term used to capture a variety of interrelated businesses That provide services to travelers. Tourism is the largest industry worldwide, the second largest Services export industry, and the third largest retail sales industry in the United States. 4 It is the first, second, or third largest employer in 30 of the 50 states. Besides the traditional hospitality businesses of hotels and restaurants, the tourism industry includes a broad range of businesses, Such as airlines, cruise lines, car rental firms, entertainment firms, travel agents, tour operators, And recreational enterprises. The focus of this textbook will be on those hospitality businesses Primarily engaged in providing food and lodging to traveling guests.
However, we will also Include discussions of other travel – related businesses, such as casinos, airlines, cruise lines, timeshares, Travel agents, tour operators, and governmental tourism institutions. Pros and Cons of strategic management in hospitality? Strategic management is the business discipline concerned with determining the future direction of a company and creating plans to achieve company-wide goals. Strategic planning should comprise a part of every business owner’s time, as it is primarily concerned with the future success and competitiveness of a company.
There can be drawbacks to strategic management, however; understanding the pros and cons of strategic management can help you to use this tool wisely. . New Opportunities . Identifying and planning to pursue new opportunities makes up a large part of strategic management. Plans for creating new products and markets, or doing things in a way that consumers have not seen, can take a company to the top and allow it to secure large market share quickly. When strategic plans work out, the time spent planning is well worth it.
Not all opportunities turn out to be profitable, however, and not all strategic plans can adequately take advantage of business opportunities. The downside to this facet of strategic management is the risk that a company will spend valuable time and resources pursuing a course of action that ends up in failure. . Time Horizon . Strategic planning is generally concerned with long-term company success. Goals, such as building a reputation in the marketplace or expanding internationally, take time to become fully realized.
Strategic management means always looking ahead to anticipate the future needs of the company and its customers, which can help a company stay ahead of its competitors. An over-emphasis on long-term strategic planning can have negative short-term consequences, however. Spending too much time on strategic planning can cause business owners to miss the trees for the forest, so to speak, by missing valuable opportunities and overlooking vital issues that need to be addressed immediately. . Dedication . Executives and business owners can spend a great deal of time on strategic planning initiatives.
As the highest-paid members of an organization, executives must manage their time wisely, generating the most value for the business possible, both on and off the clock. When strategic plans do not work out, companies incur a heavy cost due to the time spent by top-level managers on planning, implementing and leading the strategic initiatives. This adds more financial risk to the process of change. . Acquisitions and Integration . Buying companies is a popular strategic tool used to fuel growth strategies.
Buying or merging with an existing company can boost your organization’s market share, increase operational efficiency and grant you access to additional talent and customers. When done right, acquisitions can be a win-win-win for the buyer, the seller and the customers. When acquisitions do not work out, however, the buying company can incur significant financial loss, often putting it in a worse financial situation than it was before the acquisition. Companies should only acquire organizations they fully understand, in whose industries they have sufficient experience.