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Market opportunity analysis
Tourism Management 1994 15 (1) 37-45
Market opportunity analysis A DIY approach for small tourism enterprises
D. Brownlie
This paper describes a simple but effective approach to the analysis of the market environment. In making this claim it departs from the existing literature in two major respects. First, it attempts to take a reasonably involved marketing technology and find a way of simplifying it and making it workable in the context of the smaller enterprises that predominate in the tourism sector, with all the resource constraints that entails; and second, it sets the application of the derived approach in the context of a self-help, or do-it-yourself management learning activity. A process is described that has been tested with the managers of numerous small enterprises as they struggle to come to terms with the implications for their business of various key strategic issues.
Successful marketing strategies are rarely developed through guesswork. A well-tested set of procedures is available to help minimize the need for guesswork in assessing market trends for opportunities, and in planning marketing responses to them.’ The basis of market opportunity analysis (MOA) is simple enough to understand and certainly germane to all commercial organizations, irrespective of their size or sector. Table 1 outlines an ideal procedure which is typical of those discussed at some length in strategy textbooks.* As will be seen, it involves the regular collection of data about pre-defined markets of interest to the enterprise. This would include data about existing and potential customers, competitors, agents and suppliers. It also involves the regular collection of data about the prevailing political, D. Brownlie is Lecturer in Marketing, University College Cork, Cork, Ireland. Submitted November 1992; accepted June 1993
0261-5177/94/010037-09 0
1994 Butterworth-Heinemann
Ltd
economic, legal, demographic, cultural and technological circumstances which largely set the context within which the tourism enterprise operates and in which the markets of interest might grow and develop, or decline. Data are also collected about broad macro-issues which transcend particular consumer or geographical markets and that look likely to alter the context within which the firm operates. Table 2 summarizes the broad responsibilities of those who would take charge of scanning the market environment in a large organization.3 Broadly speaking, those responsibilities should still apply to small organizations, although the scale and scope of the operation and its emphases would obviously vary to suit the needs and resources of the small organization.4 The conventional approach to MOA has it that data are collected periodically through the various mechanisms of environmental scanning outlined in Table 3. After analyses and assimilation they are then to be disseminated throughout the organization for further interpretation and elaboration. In this way top managers are to be kept well informed of events and trends in the business environment so that better informed and timely decisions can be taken and plans laid.5 Yet, as Tables 1 and 2 will suggest, particularly to the impecunious small-business person in tourism, such reported applications describe a costly and sophisticated analytical procedure which, in addition to being extremely information intensive, also depends on there being a team of dedicated analysts and planning boffins to make it work.‘j They also require a managerial cadre that has the time and
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Market opportunity analysis: D Brownlie Table 1. A typical sequential scanning procedure.
model of the ideal environmental
1. Monitor broad trends, issues and events occurring in the firm’s task environment. This can be complemented by means of identifying a core list of relevant publications and assigning them to volunteers who report important articles to environmental analysis for further study. Selected areas of the remote environment should be reviewed from time to time. External consultants may be employed, as they often are in identifying and evaluating candidate diversification or acquisition opportunities within the markets or technologies unfamiliar to the firm. 2. Identifytrends, etc, which may have significance for the firm. An analysis team of senior executives should determine and implement the criteria by means of which relevance is established. Weak signals may not be amenable to screening in this way. 3. Evaluate the impact of significant trends, etc, on the firm’s operations in its current product markets. Those having a significant impact will either be via threats or opportunities.Line managers should participate in the evaluation. 4. Forecasf the possible future directions of the significant trends, etc, and examine the new opportunities and threats they appear more likely to generate. Both analyst and strategist should be involved in making the choice of environmental analysis and forecasting techniques. 5. Evaluate the impact of these threats and opportunities on the firm’s long-term strategies. 6. Reportthe progress of specific environmental analysis projects, in addition to the regular monitoring activities, on a periodic basis.
inclination to wade through reports and work out what it all means for their little patch. It has not proved an easy task to set up such systems and supporting structures, often because sceptical operations managers find it difficult to see how the data that are generated are directly relevant to the job they do.’ Clearly, there is a problem of understanding to be addressed here through management development and training. In the absence of this, formal and sophisticated environmental scanning will find it difficult to gain legitimacy outwith the portals of the planner’s ivory tower.8
Focus on small tourism enterprise For small enterprises, including those operating in the tourism sector, the link between business development and management development is clear and direct: the consequence is that useful techniques have to be explored and discovered in a partnership with managers, and not prescribed on the basis of what consultants say other larger organizations might do.9 So, in the context of finding a way to help small tourism enterprises analyse developments in their markets and to identify opportunities, it is not enough to promote a particular analytical technique or research method, leaving individual managers with the choice of trying to implement it themselves, or employing a consultant to do so. Practicable results can be achieved by working with the managers of small tourism enterprises to help them discover what approach best suits their needs and available resources. lo This approach is known to be particularly effective where the managers of several small enterprises collaborate in a joint MOA effort, as is often the case in the tourism industry at a local level.
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Short-term fire-fighting pressures are extreme in the small tourism enterprise. They make great demands on thinly spread management resources, usually denying the opportunity for the skills of managers to grow with the business. This has to be borne in mind when developing an approach to MOA that the owner/manager can realistically expect to implement. ‘i He or she needs simplified and readily applicable versions of the MOA techniques that larger firms have found to be successful. They also need the opportunity to share their problems and ideas with like-minded people, to learn from their experiences and even pool ideas and experiences in cooperative marketing ventures, Many firms, both small and large, have found it prohibitively expensive to obtain regularly and use the primary research that seems to drive the customized environmental scanning systems beloved of large organizations. ‘* Indeed, recently the value and efficacy of those sophisticated approaches to analysing the market environment has been questioned on the grounds that they are unwieldy and often fail to get the commitment and involvement of line executives, who typically baulk at the perennial inaccuracy of information generated at great expense.‘” Small tourism enterprises rarely take steps to acquire information or skills that do not have immediate application to the solution of a specific technical or managerial problem14 - unless, of course, they are urged to do so by some other agency, and at its expense. Many have neither the resources nor the inclination to plan staff development according to the human resources model, never mind opening up new markets with the provision of novel services. Management development for them is business development. It must be directly related to getting a job done and enabling the growth of the enterprise. And so small tourism enterprises do tend to pick up off-the-shelf training and development as and when they need it, usually at the behest of an initiative arranged by a Tourist Board. Of course, undue attention to the needs of the moment denies the firm the benefits of forward planning. It is possible for the managers of small tourism Table 2. Typical environmental scanning responsibilities. To monitor trends, issues and events in the business environment and to study their possible impacts on the firm’s operations To develop the forecasts, scenarios and issues analyses that serve as inputs to the firm’s strategic decision making To provide a destination to which environmental intelligence can be sent for interpretation, analysis and storage To construct a means of organizing environmental information so that a library or database on environmental developments can easily be accessed To provide an internal consulting resource on long-term environmental affairs To disseminate information on the business environment by means of newsletters, reports and lectures To monitor the performance of environmental analysis activities and to improve it by applying new tools and techniques
Tourism Management 1994 Volume 15 Number I
Market opportunity analysis: D Brownlie Table 3. Sources of information on the business environment. Location
Types
Sources of information on business environment
Inside the company
Written
Internal reports and memos, planning documents, market research, MIS
Verbal
Researchers, salesforce, marketing, purchasing, advisers, planners, board
Combination
Formal and informal meetings, eg working parties, advisory committees
Written
Annual reports, investment reports, trade association publications, institute yearbooks, text books, scientific journals, professional journals, technical magazines, unpublished reports, government reports, unpublished papers, abstracts, newspapers, espionage
Outside the company
Verbal
Combination
Consultants, librarians, government officials, consumers, suppliers, distributors, competitors, academics, market researchers, industry bodies, journalists, spies, bankers, stockbrokers Formal and informal meetings, membership of government working parties and advisory boards, industry bodies, trade associations
enterprises to take charge of the process of MOA themselves, without relying on the sophisticated systems and procedures which have been found to have some value for large organizations. Indeed some authors have presented simplified versions of those systems and procedures whose implementation does not demand the human and capital resources of large organizations. l5 The procedure that is described below provides a user-friendly diagnostic aid with which managers of such organizations can assess their position with respect to key issues in their business environment. Based on the results of this diagnostic review they can then be helped to begin the process of policy formulation and subsequent implementation. What follows is an outline description of how the process can be used. Its application is illustrated in the setting of helping the managers of small tourism enterprises to think through how they should be responding to the challenges and opportunities associated with the liberalization of the European market, post-1992. In this case a key issue has already been defined. The strategic issue: preparing for the Single European Market During the last five years, agencies of the UK government, trade associations, chambers of commerce and many other bodies have taken strenuous efforts to inform UK industry and commerce about the Single European Market. Saturation advertising and public relations campaigns have helped raise awareness and information has been made widely and easily available through those agencies. With all this media activity, the managers of many small enterprises have been made aware of what was going to happen around 1993 but numerous studies found that few were taking positive steps to prepare their
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organizations for the Single European Market. Many large enterprises had already set in motion elaborate projects to examine the market opportunities and to lay plans for exploiting them. Of course, they have access to the necessary resources, influence and expertise. But what of smaller enterprises, including those in tourism? What steps could they take to plan for the open market? Clearly the first consideration is that of motivation, ie an openness, or receptiveness to signals about the changing business environment. In the context of the large organization, a formal environmental scanning system might bring an emerging issue to the attention of top management and this might, in turn, trigger a formal investigation where top management considered it necessary. Alternatively, signs of an emerging issue might be picked up by senior managers through their personal network of contacts in other organizations. And where the source was reliable and authoritative, and the information significant, further steps would be taken to explore the issue in some depth. So, the signal has to be received from a credible source and be seen to be of some relevance to the organization before further action is taken to collect more information. But, by whatever means the initial signal is collected, there still has to be a willingness to look and listen. So, the first step is to capture the willingness through understanding. And there is nothing to remind you of the value of looking and listening quite like the sudden shock of an unexpected crisis, or your seething envy at the thought of how a close competitor capitalized on an opportunity you did not even see. Assuming the motivation is there, the next step would be to gather information on various aspects of the market environment. But which aspects are relevant? Textbook approaches talk of the social,
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Market opportunity analysis: D Brownlie
technological, economic and political factors which drive change in the market-place. Businesses are urged to tune their environmental scanning antennae to those factors. But, given their severe resource constraints, this organizing framework does not seem appropriate for small enterprises. The notion of an ‘issue’ seems to capture, with greater parsimony, the sense that in real markets those factors are inextricably interwoven into irresistible forces that must be recognized by movable businesses. Seldom does environmental change come in waves of social, technological, economic and political upheaval. So information should be sought about ‘issues’ of importance to the business presently and in the foreseeable future. This information may take the form of published material and the opinions of informed commentators and other business people. This is basically what a sophisticated environmental scanning system would do too.16 However, in the latter case someone would already be responsible for monitoring pre-defined issues. The small-business person needs to allocate this task to someone too usually him or herself. In the case of the so-called 1993 issue, the Department of Trade and Industry in the UK and the European Commission both provided information in the form of published documents which suggest that, to get the ball rolling, an audit of the firm’s activities is conducted. It goes on to advise that the next step is 1985 to obtain a co y of the European Commission’s White Paper R and its supporting documentation. The owner/manager must then extract from the 286 proposals contained in this paper those that seem relevant to his/her firm; then work through what they might mean for the firm; and then devise a course of action by means of which to put what seem like appropriate steps into force. By the time the manager of the 15bedroom hotel in the small picturesque fishing village, 30 miles from the nearest town, has reached this step, he or she has already, or is seriously contemplating abandoning the weighty document in order to relieve the rapidly mounting pressure to keep the business going by serving behind the bar, or dealing with a guest complaint about the water pressure in the shower. He or she may already feel that taking the time needed to become well informed on the Single European Market is grossly indulgent. A way of saving time is needed.
Implementation The implementation of the self-help approach MOA is based on two enabling circumstances: l
40
to
The setting up of a self-help network to facilitate a collaborative effort by a group of managers of small tourism enterprises who share an interest in evaluating their organization’s position with re-
spect to a set of focal issues that look likely to influence their businesses. Network members have, or if not, are provided with, a basic knowledge and understanding of the constituent elements of each focal issue and how it is likely to emerge. Bringing together a group of interested and participative business people is a vital first step in the process. Someone will have to take the initiative in setting the process in motion by organizing an initial event. The role can typically be taken by one of the local business people wishing to learn more about an issue and who is willing to canvas support among other interested parties. It can also be taken by an external facilitator from the support agencies available to the tourism sector at the local, or national level. A suitable means of communication with potential participants needs to be established, either employing telephone, fax, direct mail, meetings, or some combination of these. Those contacted should be running businesses that cater for the tourist sector. They should initially be invited to a meeting to discuss the possibility of forming a group of senior business people with an interest in setting up a self-help mechanism by means of which to evaluate particular market developments and to explore their impact on different tourism businesses in a defined geographical area. Interested parties can then be invited to join in the initial activity. The aim is to build up a group representing no more than eight to 10 non-directly competing tourism businesses and for a team of one or two senior managers to represent each business in the group’s activities. Suitable venues and times and other such arrangements also need to be coordinated. In some ways the process represents what would happen automatically if, for example, a planning application had been submitted to establish a gravel quarry near a site of natural beauty. Some local business people would stand to gain, others would stand to lose. The various groups would organize themselves on the basis of self-interest. Local trade associations and enterprise groups might combine their efforts to ensure that their interests were heard on the appropriate platforms. But, what about broader issues arising from developments not so close to home? Should you rely on local government officials or politicians to represent your interests? Are you happy to let them lobby on behalf of your business? Is your point of view being put clearly and persuasively? The answer to these questions would indicate whether or not someone was interested in participating in a self-help approach to MOA. Participants will often preselect themselves on the basis of having more than a passing interest in current affairs locally, as well as nationally and internationally. They
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Market opportunity analysis: D Brownlie
step
2:
Primary
issue
generation
. ~
brainstorming
step Primary and
3:
issue
evaluation
*
classification
Potential Iteration
Statement and
ranking
evaluation Potential
I
I step Statement
8: integration
iteration
I
t-
Figure 1. Market opportunity
analysis by numbers.
will also show an interest in how developments in those affairs might enhance or impede the growth in local tourist traffic. As a training device, the approach requires that participating managers, if they do not have this familiarity, should be directed towards relevant sources of information as a starting point. These may be provided by means of documentation, or by sharing information and understanding verbally. Participants will usually express a strong need for help in evaluating the likely impact of complex issues such as the Single European Market. But, as a result of such preparatory steps, they should gain deeper insights into broad economic and social implications and regulations associated with, say, the focal issue of the Single European Market. Any detailed business analysis and strategy development that might follow would then be better informed, The early
Tourism Management 1994 Volume 15 Number I
steps in the process can also be repeated at a later stage to investigate further any other specific issues which arise during the course of the overall business analysis. Figure 1 illustrates the principal features and processes associated with the self-help approach. Implementation involves a series of steps which are now described in some detail as they have been applied in the case of exploring the implications of the issue of the Single European Market for a small group of tourism businesses. The process employs some of the elements of a typical large company approach to MOA. It can also draw on the iterative and consensus-building qualities of the Delphi technique,‘s where participants are given the opportunity to respond anonymously to questioning about their views on, say, the impact of specific issues on sectors of the local tourism industry. Associated methods of brainstorming may also be used to explore possibilities. The process really begins with the first meeting at which the participants meet each other and introduce their businesses and the various issues of concern to them. The meeting can take place at the premises of one of the participating businesses. The operation of the self-help approach is described in some detail and the modest resource requirements of the exercise agreed. A timetable of activities is agreed. A small fund may be set up to disburse any expenses that may be incurred by the activities of the group. Every effort should be made to minimize this through using the facilities of the businesses where possible. Focal issues of importance to the participating businesses should be discussed and an agenda of those to be explored agreed. Step 1: Initial issue presentation At the next meeting the work of the group begins in earnest. Each chief executive, or a senior member of the management team of the participating organizations, makes a presentation of the enterprise’s past, current and prospective strategies and policies. Initial views on how post-1992 will impact on their organizations are also sought. Where possible they should also provide a current and prospective review of the enterprise’s strengths, weaknesses, opportunities and threats. Clearly, some confidentiality is required and should be assured to all participating organizations. The Delphi approach can help provide this. The pressure of disclosure can be partly relieved through selecting participating organizations on the basis of being non-directly competitive in terms of product or service/market operations. It is also important to ensure that this first presentation captures the broad meaning and impact of the Single European Market, along with a critical evaluation of the enterprise’s position with regard to it. This exercise sets the scene for the subsequent
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Marketopportuniryanalysis:D
Brownlie
analysis. At this stage participants require an openness as well as a willingness to listen and contribute to each other’s presentations. In this way the participants gain some understanding of the situation facing each business. The presentation may be accompanied by a supporting document, which should be circulated to all participants prior to the group event. It is important that this scene-setting exercise provides an accurate reflection of the current status of the business and incorporates functional perspectives. It must therefore be the responsibility of the senior managers. In this case of a solely owner-managed tourism enterprise, care must be exercised to ensure that a broad view is taken. All those taking part in the self-help process should have been circulated by the leader with relevant background information concerning the focal issue and its likely impact on, say, local tourism levels in terms of flow and expenditure patterns. Information centres on the Single European Market are dotted around the UK and they, the EC, the Department of Trade and Industry, or the various Regional and National Tourist Boards might supply relevant literature. For other issues some preliminary research will need to be done to collect the necessary background data either from published sources, or from appropriate opinion leaders. It is important to take care not to overload the participants with too much general information at this stage. Previously unseen documents should be brought to the group’s attention, or expert speakers invited to address the group on a particular question. A small fund may need to be established to cover the costs of purchasing such documentation and for disbursing other expenses that might be incurred in collecting and disseminating relevant data. Step 2: Primary issue generation The initial presentation is made to all those participating in the self-help process. This should include a senior manager of the other participating companies as well as senior representatives of any industry influencers such as tourism consultants, researchers and government specialists who might be willing to participate on a voluntary basis, perhaps as facilitators or advisers. The group as a whole then generates, via a structured brainstorming session, the primary issues facing each of the participating businesses with reference to the focal issue. Results should be recorded by participants on a flip-chart and/or white-board for subsequent consultation. At this stage in the process an experienced facilitator could help to maintain the sense of direction and focus, whilst remaining impartial, particularly where outspoken, or otherwise domineering individuals threaten to interfere with group progress unless their contribution is carefully controlled. Again, a Delphi-
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type approach can help moderate the influence of overly vocal participants. It is possible to break into syndicate groups for this task and to meet in a plenary session for further discussion and brainstorming. Each group would focus on one business and one member of the group should be a representative of the business. Step 3: Primary issue evaluation and classification Having generated a host of primary issues for each organization, these should then be evaluated and categorized into general headings - for example, finance, communications, customer service and marketing - which seem to make sense to the managers of the appropriate tourism organization. For procedural reasons around six or eight general headings should be generated and each previously defined primary issue should then be assigned to the appropriate heading by the respective managers with comments from other participants. Before any agreement is reached, there may be some debate concerning the definition of the general headings and the assignment of primary issues. This is to be encouraged. A note should be taken of the definition arrived at in each case. The evaluation should simply filter out unimportant or inappropriate headings and issues. It need not be a formal analytically driven evaluation. An approach based on management judgement is to be encouraged and the key matter is to engender a sense of priorities. Debate about the final classification is also to be encouraged so that the preconceived notions of each participant are subject to the scrutiny of the group. Step 4: Issue explosion On an individual basis each participant should then write a question, or comment, concerning the generated primary issues on a ‘post-it’ note. There need be no limit to the number of comments, other than any time limit which must be imposed on this stage by the leader or facilitator. However, comments must be brief, hence the specification of the ‘post-it’ note. This should produce a series of questions/ comments/subissues which begin to probe the validity of, and implications associated with, the primary issues. This is done for the primary issues under each of the general headings. The participants may also comment on any heading or associated primary issue. For example, if under the focal issue of the Single European Market one of the primary issues was communication, one might ask: Should front of house and reception area staff have a second or third language? What foreign-language facilitates should we provide? And in what languages? Do we need a fax and/or telephone lines dedicated to European Travel Agencies?
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Market opportunity analysis: D Brownlie l
What background information can we get on a potential distributor of, or agent for our promotional material in Eastern France? How reliable is the organization? What goals should we set?
By numbering and placing each primary issue under a particular heading on a separate flip-chart page, and by insisting that participants write only one question/comment per separate ‘post-it’ page which indicates the general heading by a number, then all that has to be done is to stick each comment to the appropriate primary issue sheet. Step 5: Issue explosion
evaluation
and classification
At this stage the individuals come together again and the group is then divided into mixed syndicates, with each one receiving a primary issues heading. Where participant numbers are low then only two or three syndicates will be possible. If this is the case, then they receive more than one primary issues heading per syndicate. Each syndicate takes its allocated heading along with all the generated comments, questions and critical remarks. They then review the material and discuss the more critical points which have been made. Having conducted this review the next step is to categorize the material into subheadings. For example, if the global heading is communication, then all questions and comments relating to language may be grouped together, as could those concerning technology. This is repeated until all the primary issues have been dealt with. Step 6: Statement generation The next stage involves the generation of statements associated with the previously classified questions/ comments. This is done by each syndicate group for their assigned issue heading only. Around six to eight key statements per issue should be the target. For example, under the issue termed ‘communication’, a statement may read as follows: the company should provide French and German language training for all sales staff; the heritage centre should produce guidebooks, information panels and scripts in French, German, Japanese and Italian. It is essential that the statements do not drift into questions. Each statement will be rated so that they must be in a form which allows the respondent to assume that by disagreeing with the statement the opposite will apply. Step 7: Statement ranking When each of the headings has around six or eight statements associated with it, the syndicate work is complete and the participants will then return to the plenary group for the next step. The upper limit to the number of statements to be associated with the headings is a matter for the judgement of the leader/facilitator. It depends on the size of the
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syndicate groups and the nature of the businesses under consideration. Each issue, along with its associated statements, can then be displayed for all to see. The leader/facilitator prepares each syndicate’s offerings on a flip-chart, with the agreed general heading at the top and the statements listed below to the left. To the right of each statement will be a previously prepared weighting scale. It allows participants to record their view of the importance of each statement to each business’s position with respect to, say, the Single European Market. The participants do this individually using a scale from one to five, where a score of one represents a statement of little importance to the business, and a score of five an issue of great importance. A ranking approach can also be used here. It is at this stage possible to use a mini-Delphi approach to come to some consensus view on the relative importance of various issues. The consensus view can then be collected. As well as measuring the importance of the statements it is also possible to ask individual participants to record the extent to which they agree with the consensus evaluation of each statement. The management team of the firm under consideration can separately record their scores on both counts for the purpose of comparison. A diagram can easily be produced that displays visually the level of agreement around the consensus on the importance of each statement. At this stage it is best to take the findings and produce a semi-formal summary report. This should contain the issues, subissues and associated statements, along with the results of the scoring and the Delphi, where employed. Step 8: Headings/statement integration The management teams of each business can now consider the findings. All issues should be considered together so that an integrated view can be taken. The issues and associated statements should be evaluated in light of the ‘total view’. The team should then make a presentation of their reaction to the findings, indicating areas of agreement and disagreement and being prepared to explain and elaborate points of difference. It is now possible to commence the formulation of a tentative strategy. The senior managers can utilize the earlier findings and construct an action plan which details preliminary steps to be taken to put the business in a position of some advantage with respect to the focal issue. At this stage there is still a lot of work to be done to formulate a detailed plan. Some areas will require further consideration and research. Step 9: Allocation of tasks Based on the precious evaluation, each participant should identify specific tasks that should be accom-
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Market opportunity analysis: D Brownlie
plished. Each task will be designed primarily to increase the knowledge base associated with the issues and key statements that have been raised for the business. Individual managers in the participating organizations should be identified and charged with a particular task and a deadline set for reporting back prior to the next meeting of the group. Step 10: Reporting back The final stage of the self-help process will take place some time after the formal session outlined in steps 1 to 9 above. The managers will then meet again, after an agreed interval, for a feedback session based on the previously allocated tasks. This feedback will be considered and may subsequently form the basis of a strategy for dealing with the focal issue, along with an integrated implementation plan. The formulation of this material will be the responsibility of the top manager and his or her senior management team, where one exists. They may possibly seek the assistance of external agencies for specialist knowledge and guidance. By this stage the various tourism businesses will be in a position either to proceed alone on the basis of the momentum set up by the group, or to set up another review meeting to further explore matters that have arisen. Additional operational guidelines The self-help process is designed to be run over a period of some six to eight hours, which can be split into two four-hour sessions. This excludes the final stage (reporting back) which should last about four hours. It is envisaged that a group of tourism businesses adopting the technique would enlist the services of external facilitators with knowledge of this or similar techniques, who would lead the process. The opening session is crucial to the effective conclusion of the process. The scene-setting presentations should attempt to cover each business’s current situation as clearly and concisely as possible. They should also provide a summary of the possible implications of the focal issue for each tourism enterprise, at least as far as the management team currently understand them. The amount of management time devoted to the preparation of this material depends on how readily available the necessary information is. In many instances this information will not be to hand and the managers from each participating business may have to spend several hours thinking through their position. But this is all part of the learning experience. Issue generation and analysis will be greatly enhanced when the participants have been well briefed. Towards the end of the session participants are required to rank the issue-related statements which have geen generated by all the syndicate groups. To ensure the success of the rating activity it is essential
44
that the leader/facilitator ensures that the syndicate groups have generated statements, not questions. Unresolved questions can be dealt with outwith this part of the exercise if they are considered to raise important issues for the business. By this time the self-help process will be engaging participants and should be self-starting. The participants will be moving towards owning various elements of the focal issue and hopefully a strategy which could be developed should be beginning to take shape in the minds of the managers. This team-building aspect of the exercise is probably as important as the development of the plan itself. It may ultimately lead to some form of cooperative marketing effort directed at raising the profile of a particular tourist attraction/destination among a specific group of potential tourists, or influencers. Lastly, the various self-help events have the support and commitment of each enterprise’s top managers. They must find the time to prepare the introductory scene-setting brief, attend and contribute to the activities and promote the active research of allocated tasks. In short, they must be seen to be actively involved in the process of evaluating marketing opportunities for the business.
Conclusions This self-help approach to MOA is intended to provide small tourism enterprises with a flexible and practicable diagnostic aid. The results of its use should inform the subsequent formulation of strategy and related action plans. It must be emphasized that the aim is not to develop a detailed strategy by means of the self-help approach. Rather it is to open an enterprise’s eyes to the potential opportunities and threats associated with the nominated focal issue. The product of the approach should be an action plan which details how the organization will go about addressing specific issues, questions and related tasks which must be dealt with prior to formulating a detailed strategy for taking a position with respect to an emerging issue. The approach may be employed to facilitate business planning in general. Although the approach is set in the context of the operating constraints of small tourism enterprises, there are several important enabling conditions that must be met before the approach can be applied. They largely concern the setting up of the group of businesses that will collaborate in the self-help approach. Forming the group is probably the key step. A small but highly motivated and participative group of business people is needed and must be brought together to listen and to share confidences with other business people. It is not always easy to find such a group. The overall process does require to be led and facilitated. This role can be taken by various people, but a trained facilitator is probably
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Market opportunity analysis: D Brownlie
best. The process is not cost free. But the costs that are generated can be minimized by using the facilities of the participating businesses and sharing any additional costs. Thus, although the technique has been found to be effective for small enterprises, there are important enabling conditions to satisfy. The exploratory and flexible qualities of the process can help to involve managers in the development of a procedure that suits their needs, whilst making use of their knowledge, skills and experience in a systematic way. It can also avoid unduly emphasizing analytical skills which participating managers rarely possess. The self-help approach is workable in the context of small enterprises and it is sufficiently stimulating and systematic to get the ball rolling in a meaningful way without expensive consultancy or detailed research.
References ‘F. Aquillar, Scanning the Business Environment, Macmillan, New York, 1967; S. Jain, ‘Environmental scanning in US corporations’, Long Range Planning, Vol 17, No 2, 1984, pp 117-128; M.J. Baker, Marketing Strategy and Management, Macmillan, London, 1992. ‘G. Johnson and K. Scholes, Exploring Corporate Strategy, Prentice Hall, Enalewood Cliffs, NJ, 1993: R. Mills, The Tourism System, Prentice-Hall, Englewood Cliffs, NJ, 1992. 3D. Brownlie, ‘Environmental analysis’, Chapter 6 in M.J. Baker, ed, The Marketing Book, Butterworth Heinemann, Oxford, 1991, pp 101-127. %. Douglas, ‘Approaches to assessing international marketing opportunities for small and medium sized companies’, Columbia
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Journal of World Business, fall, 1982, pp 26-32. 5Op tit, Ref 3. 6L. Fahey, W. King, and V. Narayanan, ‘Environmental scanning and forecasting in strategic planning - the state of the art’, Long Range Planning, Feb, 1980, pp 32-39; R. Woodruff, ‘A systematic approach to market opportunity analysis’, Business Horizons, August 1976, pp 57-58; D. Montgomery and C. Weinberg, ‘Toward strategic intelligence systems’, Journal of Marketing, Vol 43, fall, 1979, pp 41-52. 7C. Stubbart, ‘Are environmental scanning units effective?‘, Long Range Planning, June, 1982, pp 139-145. ‘P.S. Thomas, ‘Environmental scanning - the state of the art’, Long Range Planning, Vol 13, 1980, pp 20-28. gD. Brownlie, J. McCalman, R. Paton and G. Southern, ‘Management development in Glasgow: facts and fictions’, Research Report to The Training Agency, 1990. “‘Op tit, Ref 4. “Op tit, Ref 9. “Op tit, Ref 7; op cit. Ref 8; J. Difenbach, ‘Corporate environmental analysis in large US corporations’, Long Range Planning, Vol 16, No 3, 1983, pp 107-l 16. 13Y. Godiwalla, W. Meinhart and W. Warde, ‘Environmental Scanning - does it help the chief executive?‘, Long Range Planning, Ott, 1980, pp 87-99; R. Robinson and J. Pearce, ‘The impact of formalised strategic planning on financial performance in small organisations’, Strategic Management Journal, Vol 4, 1987, pp 197-207. 140p tit, Ref 9. “B. Nanus, ‘Quest - quick environmental scanning technique’, Long Range Planning, Vol 15, No 2, 1982, pp 34-45; J. Murphy, ‘Identifying strategic issues’, Long Range Planning, Vol22, No 2, 1989, pp 101-105. ‘=Op tit, Ref 3. 17European Commission, Completing The internal Market, White Paper, 1985. “D. Brownlie and M. Saren, ‘A review of technology forecasting techniques and their application’, Management Bibliographies and Reviews, 1984.
4.5
Market opportunity analysis A DIY approach for small tourism enterprises
D. Brownlie
This paper describes a simple but effective approach to the analysis of the market environment. In making this claim it departs from the existing literature in two major respects. First, it attempts to take a reasonably involved marketing technology and find a way of simplifying it and making it workable in the context of the smaller enterprises that predominate in the tourism sector, with all the resource constraints that entails; and second, it sets the application of the derived approach in the context of a self-help, or do-it-yourself management learning activity. A process is described that has been tested with the managers of numerous small enterprises as they struggle to come to terms with the implications for their business of various key strategic issues.
Successful marketing strategies are rarely developed through guesswork. A well-tested set of procedures is available to help minimize the need for guesswork in assessing market trends for opportunities, and in planning marketing responses to them.’ The basis of market opportunity analysis (MOA) is simple enough to understand and certainly germane to all commercial organizations, irrespective of their size or sector. Table 1 outlines an ideal procedure which is typical of those discussed at some length in strategy textbooks.* As will be seen, it involves the regular collection of data about pre-defined markets of interest to the enterprise. This would include data about existing and potential customers, competitors, agents and suppliers. It also involves the regular collection of data about the prevailing political, D. Brownlie is Lecturer in Marketing, University College Cork, Cork, Ireland. Submitted November 1992; accepted June 1993
0261-5177/94/010037-09 0
1994 Butterworth-Heinemann
Ltd
economic, legal, demographic, cultural and technological circumstances which largely set the context within which the tourism enterprise operates and in which the markets of interest might grow and develop, or decline. Data are also collected about broad macro-issues which transcend particular consumer or geographical markets and that look likely to alter the context within which the firm operates. Table 2 summarizes the broad responsibilities of those who would take charge of scanning the market environment in a large organization.3 Broadly speaking, those responsibilities should still apply to small organizations, although the scale and scope of the operation and its emphases would obviously vary to suit the needs and resources of the small organization.4 The conventional approach to MOA has it that data are collected periodically through the various mechanisms of environmental scanning outlined in Table 3. After analyses and assimilation they are then to be disseminated throughout the organization for further interpretation and elaboration. In this way top managers are to be kept well informed of events and trends in the business environment so that better informed and timely decisions can be taken and plans laid.5 Yet, as Tables 1 and 2 will suggest, particularly to the impecunious small-business person in tourism, such reported applications describe a costly and sophisticated analytical procedure which, in addition to being extremely information intensive, also depends on there being a team of dedicated analysts and planning boffins to make it work.‘j They also require a managerial cadre that has the time and
37
Market opportunity analysis: D Brownlie Table 1. A typical sequential scanning procedure.
model of the ideal environmental
1. Monitor broad trends, issues and events occurring in the firm’s task environment. This can be complemented by means of identifying a core list of relevant publications and assigning them to volunteers who report important articles to environmental analysis for further study. Selected areas of the remote environment should be reviewed from time to time. External consultants may be employed, as they often are in identifying and evaluating candidate diversification or acquisition opportunities within the markets or technologies unfamiliar to the firm. 2. Identifytrends, etc, which may have significance for the firm. An analysis team of senior executives should determine and implement the criteria by means of which relevance is established. Weak signals may not be amenable to screening in this way. 3. Evaluate the impact of significant trends, etc, on the firm’s operations in its current product markets. Those having a significant impact will either be via threats or opportunities.Line managers should participate in the evaluation. 4. Forecasf the possible future directions of the significant trends, etc, and examine the new opportunities and threats they appear more likely to generate. Both analyst and strategist should be involved in making the choice of environmental analysis and forecasting techniques. 5. Evaluate the impact of these threats and opportunities on the firm’s long-term strategies. 6. Reportthe progress of specific environmental analysis projects, in addition to the regular monitoring activities, on a periodic basis.
inclination to wade through reports and work out what it all means for their little patch. It has not proved an easy task to set up such systems and supporting structures, often because sceptical operations managers find it difficult to see how the data that are generated are directly relevant to the job they do.’ Clearly, there is a problem of understanding to be addressed here through management development and training. In the absence of this, formal and sophisticated environmental scanning will find it difficult to gain legitimacy outwith the portals of the planner’s ivory tower.8
Focus on small tourism enterprise For small enterprises, including those operating in the tourism sector, the link between business development and management development is clear and direct: the consequence is that useful techniques have to be explored and discovered in a partnership with managers, and not prescribed on the basis of what consultants say other larger organizations might do.9 So, in the context of finding a way to help small tourism enterprises analyse developments in their markets and to identify opportunities, it is not enough to promote a particular analytical technique or research method, leaving individual managers with the choice of trying to implement it themselves, or employing a consultant to do so. Practicable results can be achieved by working with the managers of small tourism enterprises to help them discover what approach best suits their needs and available resources. lo This approach is known to be particularly effective where the managers of several small enterprises collaborate in a joint MOA effort, as is often the case in the tourism industry at a local level.
38
Short-term fire-fighting pressures are extreme in the small tourism enterprise. They make great demands on thinly spread management resources, usually denying the opportunity for the skills of managers to grow with the business. This has to be borne in mind when developing an approach to MOA that the owner/manager can realistically expect to implement. ‘i He or she needs simplified and readily applicable versions of the MOA techniques that larger firms have found to be successful. They also need the opportunity to share their problems and ideas with like-minded people, to learn from their experiences and even pool ideas and experiences in cooperative marketing ventures, Many firms, both small and large, have found it prohibitively expensive to obtain regularly and use the primary research that seems to drive the customized environmental scanning systems beloved of large organizations. ‘* Indeed, recently the value and efficacy of those sophisticated approaches to analysing the market environment has been questioned on the grounds that they are unwieldy and often fail to get the commitment and involvement of line executives, who typically baulk at the perennial inaccuracy of information generated at great expense.‘” Small tourism enterprises rarely take steps to acquire information or skills that do not have immediate application to the solution of a specific technical or managerial problem14 - unless, of course, they are urged to do so by some other agency, and at its expense. Many have neither the resources nor the inclination to plan staff development according to the human resources model, never mind opening up new markets with the provision of novel services. Management development for them is business development. It must be directly related to getting a job done and enabling the growth of the enterprise. And so small tourism enterprises do tend to pick up off-the-shelf training and development as and when they need it, usually at the behest of an initiative arranged by a Tourist Board. Of course, undue attention to the needs of the moment denies the firm the benefits of forward planning. It is possible for the managers of small tourism Table 2. Typical environmental scanning responsibilities. To monitor trends, issues and events in the business environment and to study their possible impacts on the firm’s operations To develop the forecasts, scenarios and issues analyses that serve as inputs to the firm’s strategic decision making To provide a destination to which environmental intelligence can be sent for interpretation, analysis and storage To construct a means of organizing environmental information so that a library or database on environmental developments can easily be accessed To provide an internal consulting resource on long-term environmental affairs To disseminate information on the business environment by means of newsletters, reports and lectures To monitor the performance of environmental analysis activities and to improve it by applying new tools and techniques
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Market opportunity analysis: D Brownlie Table 3. Sources of information on the business environment. Location
Types
Sources of information on business environment
Inside the company
Written
Internal reports and memos, planning documents, market research, MIS
Verbal
Researchers, salesforce, marketing, purchasing, advisers, planners, board
Combination
Formal and informal meetings, eg working parties, advisory committees
Written
Annual reports, investment reports, trade association publications, institute yearbooks, text books, scientific journals, professional journals, technical magazines, unpublished reports, government reports, unpublished papers, abstracts, newspapers, espionage
Outside the company
Verbal
Combination
Consultants, librarians, government officials, consumers, suppliers, distributors, competitors, academics, market researchers, industry bodies, journalists, spies, bankers, stockbrokers Formal and informal meetings, membership of government working parties and advisory boards, industry bodies, trade associations
enterprises to take charge of the process of MOA themselves, without relying on the sophisticated systems and procedures which have been found to have some value for large organizations. Indeed some authors have presented simplified versions of those systems and procedures whose implementation does not demand the human and capital resources of large organizations. l5 The procedure that is described below provides a user-friendly diagnostic aid with which managers of such organizations can assess their position with respect to key issues in their business environment. Based on the results of this diagnostic review they can then be helped to begin the process of policy formulation and subsequent implementation. What follows is an outline description of how the process can be used. Its application is illustrated in the setting of helping the managers of small tourism enterprises to think through how they should be responding to the challenges and opportunities associated with the liberalization of the European market, post-1992. In this case a key issue has already been defined. The strategic issue: preparing for the Single European Market During the last five years, agencies of the UK government, trade associations, chambers of commerce and many other bodies have taken strenuous efforts to inform UK industry and commerce about the Single European Market. Saturation advertising and public relations campaigns have helped raise awareness and information has been made widely and easily available through those agencies. With all this media activity, the managers of many small enterprises have been made aware of what was going to happen around 1993 but numerous studies found that few were taking positive steps to prepare their
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organizations for the Single European Market. Many large enterprises had already set in motion elaborate projects to examine the market opportunities and to lay plans for exploiting them. Of course, they have access to the necessary resources, influence and expertise. But what of smaller enterprises, including those in tourism? What steps could they take to plan for the open market? Clearly the first consideration is that of motivation, ie an openness, or receptiveness to signals about the changing business environment. In the context of the large organization, a formal environmental scanning system might bring an emerging issue to the attention of top management and this might, in turn, trigger a formal investigation where top management considered it necessary. Alternatively, signs of an emerging issue might be picked up by senior managers through their personal network of contacts in other organizations. And where the source was reliable and authoritative, and the information significant, further steps would be taken to explore the issue in some depth. So, the signal has to be received from a credible source and be seen to be of some relevance to the organization before further action is taken to collect more information. But, by whatever means the initial signal is collected, there still has to be a willingness to look and listen. So, the first step is to capture the willingness through understanding. And there is nothing to remind you of the value of looking and listening quite like the sudden shock of an unexpected crisis, or your seething envy at the thought of how a close competitor capitalized on an opportunity you did not even see. Assuming the motivation is there, the next step would be to gather information on various aspects of the market environment. But which aspects are relevant? Textbook approaches talk of the social,
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Market opportunity analysis: D Brownlie
technological, economic and political factors which drive change in the market-place. Businesses are urged to tune their environmental scanning antennae to those factors. But, given their severe resource constraints, this organizing framework does not seem appropriate for small enterprises. The notion of an ‘issue’ seems to capture, with greater parsimony, the sense that in real markets those factors are inextricably interwoven into irresistible forces that must be recognized by movable businesses. Seldom does environmental change come in waves of social, technological, economic and political upheaval. So information should be sought about ‘issues’ of importance to the business presently and in the foreseeable future. This information may take the form of published material and the opinions of informed commentators and other business people. This is basically what a sophisticated environmental scanning system would do too.16 However, in the latter case someone would already be responsible for monitoring pre-defined issues. The small-business person needs to allocate this task to someone too usually him or herself. In the case of the so-called 1993 issue, the Department of Trade and Industry in the UK and the European Commission both provided information in the form of published documents which suggest that, to get the ball rolling, an audit of the firm’s activities is conducted. It goes on to advise that the next step is 1985 to obtain a co y of the European Commission’s White Paper R and its supporting documentation. The owner/manager must then extract from the 286 proposals contained in this paper those that seem relevant to his/her firm; then work through what they might mean for the firm; and then devise a course of action by means of which to put what seem like appropriate steps into force. By the time the manager of the 15bedroom hotel in the small picturesque fishing village, 30 miles from the nearest town, has reached this step, he or she has already, or is seriously contemplating abandoning the weighty document in order to relieve the rapidly mounting pressure to keep the business going by serving behind the bar, or dealing with a guest complaint about the water pressure in the shower. He or she may already feel that taking the time needed to become well informed on the Single European Market is grossly indulgent. A way of saving time is needed.
Implementation The implementation of the self-help approach MOA is based on two enabling circumstances: l
40
to
The setting up of a self-help network to facilitate a collaborative effort by a group of managers of small tourism enterprises who share an interest in evaluating their organization’s position with re-
spect to a set of focal issues that look likely to influence their businesses. Network members have, or if not, are provided with, a basic knowledge and understanding of the constituent elements of each focal issue and how it is likely to emerge. Bringing together a group of interested and participative business people is a vital first step in the process. Someone will have to take the initiative in setting the process in motion by organizing an initial event. The role can typically be taken by one of the local business people wishing to learn more about an issue and who is willing to canvas support among other interested parties. It can also be taken by an external facilitator from the support agencies available to the tourism sector at the local, or national level. A suitable means of communication with potential participants needs to be established, either employing telephone, fax, direct mail, meetings, or some combination of these. Those contacted should be running businesses that cater for the tourist sector. They should initially be invited to a meeting to discuss the possibility of forming a group of senior business people with an interest in setting up a self-help mechanism by means of which to evaluate particular market developments and to explore their impact on different tourism businesses in a defined geographical area. Interested parties can then be invited to join in the initial activity. The aim is to build up a group representing no more than eight to 10 non-directly competing tourism businesses and for a team of one or two senior managers to represent each business in the group’s activities. Suitable venues and times and other such arrangements also need to be coordinated. In some ways the process represents what would happen automatically if, for example, a planning application had been submitted to establish a gravel quarry near a site of natural beauty. Some local business people would stand to gain, others would stand to lose. The various groups would organize themselves on the basis of self-interest. Local trade associations and enterprise groups might combine their efforts to ensure that their interests were heard on the appropriate platforms. But, what about broader issues arising from developments not so close to home? Should you rely on local government officials or politicians to represent your interests? Are you happy to let them lobby on behalf of your business? Is your point of view being put clearly and persuasively? The answer to these questions would indicate whether or not someone was interested in participating in a self-help approach to MOA. Participants will often preselect themselves on the basis of having more than a passing interest in current affairs locally, as well as nationally and internationally. They
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Market opportunity analysis: D Brownlie
step
2:
Primary
issue
generation
. ~
brainstorming
step Primary and
3:
issue
evaluation
*
classification
Potential Iteration
Statement and
ranking
evaluation Potential
I
I step Statement
8: integration
iteration
I
t-
Figure 1. Market opportunity
analysis by numbers.
will also show an interest in how developments in those affairs might enhance or impede the growth in local tourist traffic. As a training device, the approach requires that participating managers, if they do not have this familiarity, should be directed towards relevant sources of information as a starting point. These may be provided by means of documentation, or by sharing information and understanding verbally. Participants will usually express a strong need for help in evaluating the likely impact of complex issues such as the Single European Market. But, as a result of such preparatory steps, they should gain deeper insights into broad economic and social implications and regulations associated with, say, the focal issue of the Single European Market. Any detailed business analysis and strategy development that might follow would then be better informed, The early
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steps in the process can also be repeated at a later stage to investigate further any other specific issues which arise during the course of the overall business analysis. Figure 1 illustrates the principal features and processes associated with the self-help approach. Implementation involves a series of steps which are now described in some detail as they have been applied in the case of exploring the implications of the issue of the Single European Market for a small group of tourism businesses. The process employs some of the elements of a typical large company approach to MOA. It can also draw on the iterative and consensus-building qualities of the Delphi technique,‘s where participants are given the opportunity to respond anonymously to questioning about their views on, say, the impact of specific issues on sectors of the local tourism industry. Associated methods of brainstorming may also be used to explore possibilities. The process really begins with the first meeting at which the participants meet each other and introduce their businesses and the various issues of concern to them. The meeting can take place at the premises of one of the participating businesses. The operation of the self-help approach is described in some detail and the modest resource requirements of the exercise agreed. A timetable of activities is agreed. A small fund may be set up to disburse any expenses that may be incurred by the activities of the group. Every effort should be made to minimize this through using the facilities of the businesses where possible. Focal issues of importance to the participating businesses should be discussed and an agenda of those to be explored agreed. Step 1: Initial issue presentation At the next meeting the work of the group begins in earnest. Each chief executive, or a senior member of the management team of the participating organizations, makes a presentation of the enterprise’s past, current and prospective strategies and policies. Initial views on how post-1992 will impact on their organizations are also sought. Where possible they should also provide a current and prospective review of the enterprise’s strengths, weaknesses, opportunities and threats. Clearly, some confidentiality is required and should be assured to all participating organizations. The Delphi approach can help provide this. The pressure of disclosure can be partly relieved through selecting participating organizations on the basis of being non-directly competitive in terms of product or service/market operations. It is also important to ensure that this first presentation captures the broad meaning and impact of the Single European Market, along with a critical evaluation of the enterprise’s position with regard to it. This exercise sets the scene for the subsequent
41
Marketopportuniryanalysis:D
Brownlie
analysis. At this stage participants require an openness as well as a willingness to listen and contribute to each other’s presentations. In this way the participants gain some understanding of the situation facing each business. The presentation may be accompanied by a supporting document, which should be circulated to all participants prior to the group event. It is important that this scene-setting exercise provides an accurate reflection of the current status of the business and incorporates functional perspectives. It must therefore be the responsibility of the senior managers. In this case of a solely owner-managed tourism enterprise, care must be exercised to ensure that a broad view is taken. All those taking part in the self-help process should have been circulated by the leader with relevant background information concerning the focal issue and its likely impact on, say, local tourism levels in terms of flow and expenditure patterns. Information centres on the Single European Market are dotted around the UK and they, the EC, the Department of Trade and Industry, or the various Regional and National Tourist Boards might supply relevant literature. For other issues some preliminary research will need to be done to collect the necessary background data either from published sources, or from appropriate opinion leaders. It is important to take care not to overload the participants with too much general information at this stage. Previously unseen documents should be brought to the group’s attention, or expert speakers invited to address the group on a particular question. A small fund may need to be established to cover the costs of purchasing such documentation and for disbursing other expenses that might be incurred in collecting and disseminating relevant data. Step 2: Primary issue generation The initial presentation is made to all those participating in the self-help process. This should include a senior manager of the other participating companies as well as senior representatives of any industry influencers such as tourism consultants, researchers and government specialists who might be willing to participate on a voluntary basis, perhaps as facilitators or advisers. The group as a whole then generates, via a structured brainstorming session, the primary issues facing each of the participating businesses with reference to the focal issue. Results should be recorded by participants on a flip-chart and/or white-board for subsequent consultation. At this stage in the process an experienced facilitator could help to maintain the sense of direction and focus, whilst remaining impartial, particularly where outspoken, or otherwise domineering individuals threaten to interfere with group progress unless their contribution is carefully controlled. Again, a Delphi-
42
type approach can help moderate the influence of overly vocal participants. It is possible to break into syndicate groups for this task and to meet in a plenary session for further discussion and brainstorming. Each group would focus on one business and one member of the group should be a representative of the business. Step 3: Primary issue evaluation and classification Having generated a host of primary issues for each organization, these should then be evaluated and categorized into general headings - for example, finance, communications, customer service and marketing - which seem to make sense to the managers of the appropriate tourism organization. For procedural reasons around six or eight general headings should be generated and each previously defined primary issue should then be assigned to the appropriate heading by the respective managers with comments from other participants. Before any agreement is reached, there may be some debate concerning the definition of the general headings and the assignment of primary issues. This is to be encouraged. A note should be taken of the definition arrived at in each case. The evaluation should simply filter out unimportant or inappropriate headings and issues. It need not be a formal analytically driven evaluation. An approach based on management judgement is to be encouraged and the key matter is to engender a sense of priorities. Debate about the final classification is also to be encouraged so that the preconceived notions of each participant are subject to the scrutiny of the group. Step 4: Issue explosion On an individual basis each participant should then write a question, or comment, concerning the generated primary issues on a ‘post-it’ note. There need be no limit to the number of comments, other than any time limit which must be imposed on this stage by the leader or facilitator. However, comments must be brief, hence the specification of the ‘post-it’ note. This should produce a series of questions/ comments/subissues which begin to probe the validity of, and implications associated with, the primary issues. This is done for the primary issues under each of the general headings. The participants may also comment on any heading or associated primary issue. For example, if under the focal issue of the Single European Market one of the primary issues was communication, one might ask: Should front of house and reception area staff have a second or third language? What foreign-language facilitates should we provide? And in what languages? Do we need a fax and/or telephone lines dedicated to European Travel Agencies?
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Market opportunity analysis: D Brownlie l
What background information can we get on a potential distributor of, or agent for our promotional material in Eastern France? How reliable is the organization? What goals should we set?
By numbering and placing each primary issue under a particular heading on a separate flip-chart page, and by insisting that participants write only one question/comment per separate ‘post-it’ page which indicates the general heading by a number, then all that has to be done is to stick each comment to the appropriate primary issue sheet. Step 5: Issue explosion
evaluation
and classification
At this stage the individuals come together again and the group is then divided into mixed syndicates, with each one receiving a primary issues heading. Where participant numbers are low then only two or three syndicates will be possible. If this is the case, then they receive more than one primary issues heading per syndicate. Each syndicate takes its allocated heading along with all the generated comments, questions and critical remarks. They then review the material and discuss the more critical points which have been made. Having conducted this review the next step is to categorize the material into subheadings. For example, if the global heading is communication, then all questions and comments relating to language may be grouped together, as could those concerning technology. This is repeated until all the primary issues have been dealt with. Step 6: Statement generation The next stage involves the generation of statements associated with the previously classified questions/ comments. This is done by each syndicate group for their assigned issue heading only. Around six to eight key statements per issue should be the target. For example, under the issue termed ‘communication’, a statement may read as follows: the company should provide French and German language training for all sales staff; the heritage centre should produce guidebooks, information panels and scripts in French, German, Japanese and Italian. It is essential that the statements do not drift into questions. Each statement will be rated so that they must be in a form which allows the respondent to assume that by disagreeing with the statement the opposite will apply. Step 7: Statement ranking When each of the headings has around six or eight statements associated with it, the syndicate work is complete and the participants will then return to the plenary group for the next step. The upper limit to the number of statements to be associated with the headings is a matter for the judgement of the leader/facilitator. It depends on the size of the
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syndicate groups and the nature of the businesses under consideration. Each issue, along with its associated statements, can then be displayed for all to see. The leader/facilitator prepares each syndicate’s offerings on a flip-chart, with the agreed general heading at the top and the statements listed below to the left. To the right of each statement will be a previously prepared weighting scale. It allows participants to record their view of the importance of each statement to each business’s position with respect to, say, the Single European Market. The participants do this individually using a scale from one to five, where a score of one represents a statement of little importance to the business, and a score of five an issue of great importance. A ranking approach can also be used here. It is at this stage possible to use a mini-Delphi approach to come to some consensus view on the relative importance of various issues. The consensus view can then be collected. As well as measuring the importance of the statements it is also possible to ask individual participants to record the extent to which they agree with the consensus evaluation of each statement. The management team of the firm under consideration can separately record their scores on both counts for the purpose of comparison. A diagram can easily be produced that displays visually the level of agreement around the consensus on the importance of each statement. At this stage it is best to take the findings and produce a semi-formal summary report. This should contain the issues, subissues and associated statements, along with the results of the scoring and the Delphi, where employed. Step 8: Headings/statement integration The management teams of each business can now consider the findings. All issues should be considered together so that an integrated view can be taken. The issues and associated statements should be evaluated in light of the ‘total view’. The team should then make a presentation of their reaction to the findings, indicating areas of agreement and disagreement and being prepared to explain and elaborate points of difference. It is now possible to commence the formulation of a tentative strategy. The senior managers can utilize the earlier findings and construct an action plan which details preliminary steps to be taken to put the business in a position of some advantage with respect to the focal issue. At this stage there is still a lot of work to be done to formulate a detailed plan. Some areas will require further consideration and research. Step 9: Allocation of tasks Based on the precious evaluation, each participant should identify specific tasks that should be accom-
43
Market opportunity analysis: D Brownlie
plished. Each task will be designed primarily to increase the knowledge base associated with the issues and key statements that have been raised for the business. Individual managers in the participating organizations should be identified and charged with a particular task and a deadline set for reporting back prior to the next meeting of the group. Step 10: Reporting back The final stage of the self-help process will take place some time after the formal session outlined in steps 1 to 9 above. The managers will then meet again, after an agreed interval, for a feedback session based on the previously allocated tasks. This feedback will be considered and may subsequently form the basis of a strategy for dealing with the focal issue, along with an integrated implementation plan. The formulation of this material will be the responsibility of the top manager and his or her senior management team, where one exists. They may possibly seek the assistance of external agencies for specialist knowledge and guidance. By this stage the various tourism businesses will be in a position either to proceed alone on the basis of the momentum set up by the group, or to set up another review meeting to further explore matters that have arisen. Additional operational guidelines The self-help process is designed to be run over a period of some six to eight hours, which can be split into two four-hour sessions. This excludes the final stage (reporting back) which should last about four hours. It is envisaged that a group of tourism businesses adopting the technique would enlist the services of external facilitators with knowledge of this or similar techniques, who would lead the process. The opening session is crucial to the effective conclusion of the process. The scene-setting presentations should attempt to cover each business’s current situation as clearly and concisely as possible. They should also provide a summary of the possible implications of the focal issue for each tourism enterprise, at least as far as the management team currently understand them. The amount of management time devoted to the preparation of this material depends on how readily available the necessary information is. In many instances this information will not be to hand and the managers from each participating business may have to spend several hours thinking through their position. But this is all part of the learning experience. Issue generation and analysis will be greatly enhanced when the participants have been well briefed. Towards the end of the session participants are required to rank the issue-related statements which have geen generated by all the syndicate groups. To ensure the success of the rating activity it is essential
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that the leader/facilitator ensures that the syndicate groups have generated statements, not questions. Unresolved questions can be dealt with outwith this part of the exercise if they are considered to raise important issues for the business. By this time the self-help process will be engaging participants and should be self-starting. The participants will be moving towards owning various elements of the focal issue and hopefully a strategy which could be developed should be beginning to take shape in the minds of the managers. This team-building aspect of the exercise is probably as important as the development of the plan itself. It may ultimately lead to some form of cooperative marketing effort directed at raising the profile of a particular tourist attraction/destination among a specific group of potential tourists, or influencers. Lastly, the various self-help events have the support and commitment of each enterprise’s top managers. They must find the time to prepare the introductory scene-setting brief, attend and contribute to the activities and promote the active research of allocated tasks. In short, they must be seen to be actively involved in the process of evaluating marketing opportunities for the business.
Conclusions This self-help approach to MOA is intended to provide small tourism enterprises with a flexible and practicable diagnostic aid. The results of its use should inform the subsequent formulation of strategy and related action plans. It must be emphasized that the aim is not to develop a detailed strategy by means of the self-help approach. Rather it is to open an enterprise’s eyes to the potential opportunities and threats associated with the nominated focal issue. The product of the approach should be an action plan which details how the organization will go about addressing specific issues, questions and related tasks which must be dealt with prior to formulating a detailed strategy for taking a position with respect to an emerging issue. The approach may be employed to facilitate business planning in general. Although the approach is set in the context of the operating constraints of small tourism enterprises, there are several important enabling conditions that must be met before the approach can be applied. They largely concern the setting up of the group of businesses that will collaborate in the self-help approach. Forming the group is probably the key step. A small but highly motivated and participative group of business people is needed and must be brought together to listen and to share confidences with other business people. It is not always easy to find such a group. The overall process does require to be led and facilitated. This role can be taken by various people, but a trained facilitator is probably
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best. The process is not cost free. But the costs that are generated can be minimized by using the facilities of the participating businesses and sharing any additional costs. Thus, although the technique has been found to be effective for small enterprises, there are important enabling conditions to satisfy. The exploratory and flexible qualities of the process can help to involve managers in the development of a procedure that suits their needs, whilst making use of their knowledge, skills and experience in a systematic way. It can also avoid unduly emphasizing analytical skills which participating managers rarely possess. The self-help approach is workable in the context of small enterprises and it is sufficiently stimulating and systematic to get the ball rolling in a meaningful way without expensive consultancy or detailed research.
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