Conditions for Effective Implementation of Tourism Development Strategy

o W/T : What weaknesses can be overcome to reduce current risks?

+ Step 3 : Provide a combination of the 4 factors S+W+O+T. This is to create a resonance between the 4 factors to form a strategy that helps businesses use strengths to exploit opportunities, gradually fill weaknesses and reduce risks.

+ Step 4 : Synthesize and review strategies. Group strategies

and coordinate strategies into a mutually supportive system.

SWOT is an acronym for the first letters of the English words: Strengths; Weaknesses; Opportunities; Threats. This is a useful tool to help us understand problems or make decisions in organization, management as well as in business.

The SWOT matrix is used to list all the opportunities, threats, strengths and weaknesses within the business, in the appropriate order and position (see Figure 1.4). Based on the relationship between the factors, analysts will proceed to propose 4 basic strategic groups:

The SWOT analysis matrix can be briefly interpreted as the following diagram:

Figure 1.4. SWOT matrix model

Advantages :

- Specify the strengths and weaknesses of the business as well as identify the

opportunities and threats from the external environment.

- Provide specific combination strategies from strengths, weaknesses, opportunities and threats for businesses to implement.

 Limitations:

The SWOT matrix helps to identify possible strategies to choose from, not to make a choice or decide which strategy is best. Thus, the question of which strategy to choose for development is not answered here.

1.4.1.2. McKinsey/GE combination matrix method

The McKinsey/GE matrix of attractive business combinations - competitive strengths helps managers make business decisions based on a combination of many factors of industry attractiveness (industry size, industry growth rate, industry profit level, investment capital level, technological stability, competitive intensity, cyclical independence, ...) and competitive strengths (market share, technological know-how, product quality, after-sales service, warranty, price competitiveness, low operating costs, productivity, ...).

The steps for evaluating an attractive business combination based on industry and competitive strengths are as follows:

+ Step 1: Determine criteria for evaluating competitive intensity and strengths

business competition

+ Step 2: Determine the relative importance of the criteria by assigning

Relative weight for each criterion satisfying the conditions:

- The weights have values between 0 (not important), 1 (very important)

- The sum of the weights is 1.

+ Step 3: Rate the factors on a scale from 1 (not at all attractive/very weak) to 4 (very attractive/very strong).

+ Step 4: Multiply the weight of each factor by the corresponding score to determine

score on the importance of each factor.

+ Step 5: Calculate industry attractiveness and competitive position by

Multiply the values of each criterion by their numerical values and add the products.

+ Step 6: Place on the graph with the vertical axis representing the attractiveness of the market, the horizontal axis representing the competitive advantage of the enterprise. The position of the SBU on the GE matrix is represented by a circle, with the center being the intersection between the position of the industry attractiveness matrix and the position of the competitive position matrix. The size of the circle depends on the size of the industry.

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Figure 1.5. GE matrix in McKinsey model

Source: Lecture on Strategic Management - Pham Xuan Lan, PhD-Dinh Thai Hoang (modified)

Then based on the position on the GE matrix (Figure 1.5), we come up with appropriate policies:

- SBUs in the Harvest or Discard zone have very little potential to generate profits for the business. Therefore, it is necessary to implement a policy of only investing minimally, continuing to invest when free cash flow is positive, and selling or liquidating if free cash flow is negative.

- SBUs in the Investment or Growth zone often have high market growth rates. Therefore, it is necessary to invest to exploit positive market trends, maintain or strengthen competitive position, even accept negative cash flows because it is a source of high income and brings a lot of money in the future.

- For SBUs located in the Selected Area, policy options must be considered.

Fit

1.4.1.3 Charles Hofer matrix method:

Overcoming the shortcomings of the McKinsey method, Charles Hofer proposed an analysis of business structure based on the development of the industry. The model also has SBUs like the previous two models, and also evaluates the SBUs, but the difference is that their potential is considered through the development stages of the industry. The evaluation steps according to the Charles Hofer matrix method are specifically as follows:

+ Step 1: Determine the criteria for evaluating the competitive strengths of the business.

+ Step 2: Determine the relative importance of the criteria by assigning

Relative weight for each criterion satisfying the conditions:

- The weights have values between 0 (not important) - 1 (very important)

- The sum of the weights is 1.

+ Step 3: Rate the factors on a scale of 1 (very weak) to 5 (very strong).

+ Step 4: Multiply the weight of each factor by the corresponding score to determine the score for the importance of each factor.

+ Step 5: Calculate industry attractiveness and competitive position by multiplying

the values of each criterion with their numerical values and add the products together

+Step 6: Place it on the graph with the vertical axis representing the industry's development cycle, the horizontal axis representing the competitive advantage of the business. The position of the SBU on the matrix is represented by a circle, with the center being the intersection of the competitive position and the stage of the development cycle.

Figure 1.6. GE matrix in Charles Hofer model

Source: Business Strategy and Tactics - Translator: Bui Van Dong

Then based on the position on the GE matrix, we come up with appropriate policies (see Table 1.1):

Table 1.1. Policies according to GE matrix

Industry development cycle

Competitive position of the business

career

Embryo

Growth

Prosperous

Saturation

recession

Leader

- Go all out for market share

- Hold position

- Maintain market share

- Hold position

- Exploit with all your might

- Hold position

- Lean

- Hold position

- Modification

Strong

- Focus on market share

- Improve position

- Focus on market share

- Improve position

- Exploit with all your might

- Improve position

- Compact and streamlined

- Hold position

Average

Select

market segmentation

Increase investment

develop

Mining preparation

narrow

Narrow Improvement

Narrow

Medium

Select market segment

Increase investment

Mining prepares to withdraw

Narrow conversion

Dissolution

Weak

Rise Up

or withdraw

Reach out to find market segments that have

profit

Mining and preparation for withdrawal

Transform or withdraw individual parts

Dissolution

Source: Business Strategy and Tactics - Translator: Bui Van Dong

1.4.2. Choosing a business strategy

Enterprises must choose the optimal strategy because it is impossible to implement all strategies at the same time or each strategy in an unplanned order, because it will take a lot of time and resources. Therefore, there must be a choice to come up with a set of strategies that are considered the most optimal for development and consider the benefits and losses that the enterprise gets from this strategy.

Based on the set of strategies that have been identified by combining the factors Strengths - Opportunities, Strengths - Threats, Weaknesses - Opportunities, Weaknesses - Threats, use the matrix according to the GREAT criteria to outline the basic features for choosing the core business strategy that the enterprise is capable of pursuing.

Thus, with the strategic planning tools as analyzed above, each tool has its own advantages and limitations. Therefore, when applying in practice, we must flexibly select appropriate strategies for each specific situation and condition.

1.5. Conditions for effective implementation of tourism development strategy

In reality, planning strategic solutions that are suitable for the organization's goals is difficult, and implementing them effectively is even more difficult. Managers at all levels need to perform their tasks well through other functions in management. These functions, fully implemented, have a scientific basis, and are considered necessary conditions for implementing strategic solutions effectively.

1.5.1. Building and maintaining an effective organizational structure

All forms of organization in general: State management agencies, enterprises, other organizations... can only complete tasks and achieve goals in each period through the implementation of solutions, policies, specific measures... of people. The work of people or members in the organization can achieve high efficiency when managers at all levels build and maintain an effective organizational structure. Building an organizational structure is a process, based on the planning function.

Some requirements when building an organizational structure:

Appropriate to the objectives and environmental factors that influence

each period

Organizational structure changes according to the human factor.

Build good relationships between levels and departments so that everyone in the organization is enthusiastic and has the opportunity to develop all potential abilities to achieve collective goals with high efficiency.

Thus, the organizational structure is designed primarily around the goals to be achieved and the activities to be performed in each period in accordance with human factors.

people and build good internal relationships to promote the capacity of the organizational structure.

high level function

Organizational Structure Building Process

The construction of the organizational structure is carried out through the following basic process:

Divide the organization into departments:

Each department in the organizational structure is a separate field of activity, but is related to each other in the process of carrying out activities to achieve common goals. Depending on whether the organization is an economic sector, a specific enterprise, etc., the departments in the organizational structure can be divided in different ways. In reality, there is no optimal division method, the administrator needs to study the specific situation to apply the methods of combining them together:

+ First way: divide by the number of people doing the work.

+ Second way: divide departments according to working time.

+ Third way: divide parts by function.

Functional departmentalization is widely applied in different organizations. Functional departments represent specialized areas of activity in the organizational structure, covering the work that an organization performs regularly. Some basic functions of a production - business organization can be divided into departments such as: human resources, marketing, finance, purchasing, production, administration, etc. In each functional department, the administrator can divide into groups according to specific types of work, for example: the marketing department can be divided into (market research group, marketing planning group, advertising group, promotion group, etc.). Depending on the specific type of organization, functional departments will be identified through names appropriate to the content of the work.

+ Fourth way: divide departments by geographical area.

This is a fairly common way of dividing departments in organizations or businesses that operate over a wide geographical area. In which each department in a geographical area is assigned to a general manager. Organizations and businesses divide departments in this way when conducting activities and work in similar geographical areas.

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