Hospitality Strategic Management: Concepts and Cases, Second Edition
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Updated to include the current models, theories, and hospitality practices, Hospitality Strategic Management: Concept and Cases, Second Edition is a comprehensive guide to strategic management in the international hospitality industry. Author Cathy A. Enz uses the case study approach to cover current topics such as innovation, entrepreneurship, leadership, ethics, and franchising. Eight full case studies with exhibits and documents address the areas of lodging, food service, tourism e-commerce, gaming, cruise lines, and airlines, making this book ideal for executive level training courses or hospitality industry executives interested in developing their strategic management skills.


Cathy A. Enz is the Lewis G. Schaeneman Jr. Professor of Innovation & Dynamic Management at the School of Hotel Administration at Cornell University, where she is also the Executive Director of the Center for Hospitality Research. Winner of outstanding teacher and researcher awards, she teaches courses in strategic management and innovation.


Preface xiii

About the Author xix

CHAPTER 1 Strategic Management 1

Introduction 3

The Origin of Strategic Management 5

The Traditional Perspective 6

The Organization as a Bundle of Resources: The Resource-Based View 9

The Organization as a Network of Stakeholders 11

The Strategic Management Process 13

Situation Analysis 16

Strategic Direction 16

Strategy Formulation 18

Strategy Implementation 19

Global Competitiveness in the Hospitality Industry 20

Variables Affecting Strategic Management 21

Strategic Thinking 21

Strategic Planning Can Drive out Strategic Thinking 22

Characteristics of Strategic Thinking 23

Motivating Managers and Employees to Think Strategically 27

Strategic Management in the Hospitality Industry 28

The Foodservice Industry—The Players. 28

The Lodging Industry—The Players 29

Key Points Summary 33

Review Questions 34

Critical Thinking and Application Questions 34

CHAPTER 2 The Environment and External Stakeholders 36

Introduction 38

Assessment of the Broad Environment 39

The Sociocultural Context 40

The Economic Context 47

The Political Context 48

The Technological Context 50

Change and Interdependence among the Broad Environmental Forces 54

Gathering Information on International Environments 56

Analysis of External Stakeholders and the Operating Environment 58

Porter’s Five Forces, Economic Power, and Industry Characteristics 59

External Stakeholders, Formal Power, and Political Influence 69

Managing the Operating Environment 70

Economic Actions 71

Political Strategies 72

Partnering with External Stakeholders 74

Key Points Summary 76

Review Questions 78

Critical Thinking and Application Questions 78

CHAPTER 3 Strategic Direction 80

Introduction 83

Creating a Strategic Direction 83

Key Influences on Direction 86

Mission Statements 89

Organizational Vision 94

Organizational Values 95

Social Responsibility 99

Enterprise Strategy 102

Ethical Frames of Reference 105

Codes of Ethics 108

Ethics in Global Environments 110

Key Points Summary 111

Review Questions 112

Critical Thinking and Application Questions 113

CHAPTER 4 Organizational Resources and Competitive Advantage 114

Introduction 116

Internal Analysis and Competitive Advantage 117

Sustainable Competitive Advantage 117

Value-Adding Activities 120

The Value Chains of Winemakers 120

Value-Chain Activities 121

The Tourism Value Chain 124

Tangible and Intangible Resources 125

Resources and Capabilities 126

Financial Resources. 127

Financial Ratios 128

Physical Resources 130

Architectural and Sustainable Design 131

Human-Based Resources 134

Strategic Leadership 134

Ownership and Management 140

Employees 143

Structure and Culture 144

Knowledge-Based Resources 148

Internal Knowledge Creation and Organizational Learning 150

Knowledge Creation 150

Knowledge Creation and Interorganizational Relationships 152

General Organizational Resources 155

Patents, Copyrights, Trademarks, and Servicemarks 155

Brands and Organizational Reputation 156

Superior Relationships with Stakeholders 159

Key Points Summary 160

Review Questions 162

Critical Thinking and Application Questions 162

CHAPTER 5 Strategy Formulation at the Business-Unit Level 164

Introduction 167

Generic Business Strategies 167

Cost Leadership 172

Differentiation 179

Best Value 185

Focus 188

Competitive Dynamics 189

Strategies That Reflect Competitive Dynamics 191

Resources, Industry Structure, and Firm Actions 197

Strategic Group Mapping 199

Developing a Strategic Group Map 200

Key Points Summary 201

Review Questions 202

Critical Thinking and Application Questions 203

CHAPTER 6 Corporate-Level Strategy and Restructuring. 205

Introduction 207

Concentration Strategies 210

Advantages and Disadvantages of a Concentration Strategy 211

Vertical Integration Strategies 214

Advantages and Disadvantages of a Vertical Integration Strategy 216

Vertical Integration and Transaction Costs 217

Substitutes for Full Vertical Integration 219

Diversification Strategies 220

Related Diversification 220

The Creation of Synergy 222

Unrelated Diversification 226

Mergers and Acquisitions 229

Consolidation 230

Merger Performance 232

Successful and Unsuccessful Mergers and Acquisitions 234

Strategic Restructuring 236

Turnaround Strategies and Downsizing 237

Refocusing Corporate Assets 239

Chapter 11 Reorganization 240

Leveraged Buyouts 242

Changes to Organizational Design 243

Portfolio Management 244

The Boston Consulting Group (BCG) Matrix 245

Destination Portfolio Analysis 247

Key Points Summary 247

Review Questions 249

Critical Thinking and Application Questions 250

CHAPTER 7 Strategy Implementation through Interorganizational Relationships and Management of Functional Resources 252

Introduction 254

Interorganizational Relationships and the Tourism Cluster 255

Advantages and Disadvantages of Interorganizational Relationships 256

Stakeholder Management and the Selection of Partners 262

Buffering versus Partnering 267

Effective Stakeholder Management 268

Managing Partnerships. 287

Functional-Level Resource Management 289

Marketing Strategy 291

Human Resources Strategy 295

Operations Strategy 295

Key Points Summary 296

Review Questions 297

Critical Thinking and Application Questions 298

CHAPTER 8 Strategy Implementation through Organizational Design and Control 299

Introduction 302

Organizational Structures 302

Simple Management Structures 305

Business-Level versus Corporate-Level Structures 307

Types of Business-Level Structures 309

Corporate-Level Structures 318

The Lateral Organization 325

Simple Coordinating Mechanisms 326

Formal Integrators 327

Organizational Control 327

Strategic versus Financial Controls 329

Feedback-Control Systems 331

Feedforward Control 339

Other Types of Controls 344

Crisis Prevention and Management 346

Key Points Summary 351

Review Questions 353

Critical Thinking and Application Questions 354

CHAPTER 9 Strategies for Entrepreneurship and Innovation 356

Introduction 359

Entrepreneurial Start-ups 359

The Entrepreneur 360

Entrepreneurial Tasks 361

Franchising 376

Causes of Failure 377

Innovation and Corporate Entrepreneurship 380

Fostering Innovation in Established Firms 382

The Internet and E-commerce 389

Key Points Summary 393

Review Questions 395

Critical Thinking and Application Questions 396

CHAPTER 10 Global Strategic Management and the Future 397

Introduction 399

Global Strategies 402

Multidomestic, Global, and Transnational Strategies 402

Market Entry Tactics 405

International Alliances and Business-Format Franchising 408

International Market Selection 411

Institutional Differences 416

National Advantages 417

Global Stakeholders 419

Stakeholder Management in Foreign Environments 420

Strategic Management in Hospitality Firms in the Future 424

Key Points Summary 425

Review Questions 427

Critical Thinking and Application Questions 428


Case Study Matrix 430

Case Note: Learning through Case Analysis 433

Case 1: The Fun Ship Experience at Carnival Cruise Lines 442

Case 2: Building Capabilities at the Westward Hilton 453

Case 3: InterContinental Hotel Group’s Entry into China 482

Case 4: The Summer of 2006 Union Negotiations: Unite Here’s Strategy 504

Case 5: Banyan Tree: Sustainability of a Brand during Rapid Global Expansion 514

Case 6: Starwood Hotels and Resorts Brings Aloft to India 552

Case 7: The Commoditization of Starbucks 564

Case 8: The Movement of Travel Services Online: Intermediaries and Branded Distribution 582

Notes 595

Glossary 645

Index 657