Strategic Approach For Superior Organizational Performance Marketing Essay

The concept paper presents a survey which seeks to add to the organic structure of cognition that relates Porters generic competitory schemes and market orientation to organisational public presentation in the context of Malaysia hotel industry. Using a mail questionnaire, the survey will place the natural taxonomy of two strategic types of hotel industry, based on their usage of competitory schemes in pure signifier and market orientation of rival orientation and client orientation options. The survey will analyze specific competitory strategic types associated with specific market orientation. Data will be collected from 3 star and above rated hotels in Malaysia. Findingss of this survey anticipate making better strategic direction patterns, which may be used by the direction in the industry to explicate strategic determination in order to achieve superior public presentation and competitory advantage every bit good as enhance hotel industry ‘s fight to accomplish NKEA docket.

Field of Research: Competitive Strategy, Market Orientation, Performance

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Introduction

Cordial reception industry is playing an of import function in the touristry industry worldwide. Malayan authorities ‘s comprehensive program which converted economic position from production based to knowledge based had enabled the service industry to see balanced growing ( Razalli, 2008 ; Awang, Ishak, Radzi and Taha, 2008 ) . Malaya in peculiar has identified service sector as one of its economic pillars under National Key Economic Area ( NKEA ) undertaking. Service sector contributed RM 53,938 to Gross Domestic Product ( GDP ) and 49 % of productiveness growing in the twelvemonth of 2011 ( Productivity Report, 2011/2012 ) . One of the important constituents of touristry and service sector is the cordial reception industry ( NKEA Report, 2011 ) .

Narentheren Kaliappen, Othman Yeop Abdullah Graduate School of Business ( OYAGSB ) Universiti Utara Malaysia

Electronic mail: s93697 @ student.uum.edu.my

Dr. Haim Hilman, Corporate Planning Unit, Chancellery Universiti Utara Malaysia

Electronic mail: hilman @ uum.edu.my

In Malaysia, the hotel industry is a 1 of the possible industries which contributes to the state ‘s economic system and besides making capacity for extra occupations ( NKEA Report, 2011 ) . The study of Ministry of Tourism Malaysia shows there are 272 hotels with three to five star evaluation in Peninsular Malaysia, 104 hotels with three to five star evaluation in Sabah and Sarawak and 77 hotels with three to five star evaluation in federal districts. Therefore, there are 452 hotels with three star to five star evaluation in Malaysia. The figure of hotels supports on increasing with every twelvemonth.

1.2 Problem Statement

Hoteliers today face assorted challenges from internal and external factors in a dynamic concern environment which affect the organisational public presentation ( Razalli, 2008 ) . This terrific competitory concern environment forces the hotels to follow the finest competitory scheme and market orientation which can be the best strategic tantrum for the organisation strategic way and patterns in order to accomplish greater organisational public presentation and competitory advantage. In short, anterior surveies indicate that the research workers have conducted assorted surveies but each survey conducted on a peculiar footing. Even though, past surveies contributed valuable information to bing cognition but surveies analyzing these three concepts in context of hotel industry in Malaysia is limited. Over the past decennary, there is turning realisation of the critical part of competitory scheme ( Auzair, 2011 ; Nandakumar, Ghobadian and Regan, 2011 ; Hilman, 2009 ) and market orientation ( Voola and O’Cass, 2010 ; Aziz and Yassin, 2010 ; Zhou, Brown and Dev, 2009 ; Mueller, Walter and Gemuenden, 2001 ) on organisational public presentation. Therefore, in order to bridge the bing spread this survey will look into the importance of the strategic relationship between competitory scheme and market orientation and the effects on organisational public presentation of hotels in Malaysia.

1.3 Purpose of Study

In Strategic Management literatures, the nexus between scheme, construction and public presentation in apprehension of organisation scheme determines organisational construction and influences the organisational public presentation ( Prajogo and Sohal, 2006 ; Homburg, Krohmer and Workman, 2004 ) . This is merely called scheme execution position ( Voola and O’Cass, 2010 ) . Current survey will be conducted within scheme execution position that attempts to look into the strategic relationship between organisation scheme ( cost leading and distinction ) , organisation construction ( competitor orientation and client orientation ) and organisational public presentation. First, this survey will place the natural taxonomy of strategic types hotels, based on their usage of generic schemes in pure signifier. Then, it will analyze whether specific strategic types are associated with specific market orientation types and organisational public presentation. Finally, the managerial deductions of this survey are discussed.

2. Literature Reappraisal

2.1 Competitive Scheme

Harmonizing to Porter ( 1980 ) , competitory scheme is a model which derived competitory placement determinations to get superior competitory advantage.

The intent of making a scheme is to guarantee that direction obtains a good determination to accomplish sustainable competitory advantage and superior public presentation than their challengers. Competitive scheme will help in placing competitory strength and besides find the possible rivals in the industry ( Porter, 1980, 1985 ) . By explicating the finest competitory scheme, organisation may perchance extenuate towards effects of five competitory environmental forces viz. rivalry among existing houses, dickering power of purchasers, dickering power of providers, and possible entry of new rivals and possible development of utility merchandise / service in the industry ( Nandakumar et al. , 2011 ; Hilman, 2009 ; Porter, 1985 ) . Briefly, competitory scheme will help organisations to develop a primary attack and concentrate on the growing of the organisation in order to accomplish better public presentation. Therefore, the model of Porter ‘s generic competitory schemes could still be employed in hotel industry for bring forthing cognition, which may be used in the preparation and execution of schemes.

2.1.1 Porter ‘s generic competitory scheme

Porter ‘s Generic Competitive Strategic theoretical account ( 1980 ) assists the practicians to utilize analytical technique for seeking better understanding about their industry and rivals. Crucially, strategic be aftering leads to important benefits for the full organisational public presentation. In order to derive long-run sustainability, organisation should accurately explicate its concern schemes. Therefore, Porter ( 1980 ) proposed three generic schemes ; cost leading, distinction and focal point. Cost leading scheme and distinction scheme were the chief two generic schemes which emphasis on making competitory advantage whereas focal point scheme is a subset of the latter schemes ( Hilman, 2009 ; Seedee, Sulaiman and Ismail, 2008 ; Porter, 1980, 1985 ) . Porter ( 1980 ) mentioned that schemes are reciprocally sole and organisation will ‘stuck in center ‘ if prosecuting more than one generic strategic at the same time. This is because, there were different demands needed to put to death these schemes in the organisation. For case, different types of resources, accomplishments, organisation agreement, control processs, inducement system and direction system. Porter ‘s generic competitory scheme theoretical account is clearly illustrated in Figure 1.1.

Figure 1.1

Porter ‘s Generic Competitive Strategy

Differentiation

Cost leading Competitive advantage

Focus

Broad

Scope Narrow

2.1.1.1 Cost leading scheme

Based on Porter ( 1980, 1985 ) , cost leading scheme is about forming and pull offing concern activities in order to be the lowest cost manufacturer of merchandises or service in the full industry. Harmonizing to Frambach, Ruud, Prabhu and Theo ( 2003 ) organisations which pursue a cost leading scheme be given to be a rival orientated instead than being client oriented. Previously, Day and Wensley ( 1988 ) stated cost leading scheme requires a high degree of rival orientation. Significantly, cost leading scheme comparatively concerns more on rivals in the industry ( Prajogo and Sohal, 2006 ) . Even though, the aim is to bring forth low cost merchandises and services but the organisation still an accent on the quality and value every bit good.

Porter mentioned that, to accomplish cost leading place an organisation requires efficient graduated table installations and cost decrease through experience, tight cost, overhead cost control and cost minimisation in several countries viz. service, gross revenues, selling and research and development ( Hilman, 2009 ; Hlavacka, Bacharova, Rusnakova and Wagner, 2001 ; Porter, 1980 ) . Porter suggested that the lowest cost place in industry facilitates the organisation to support against their rivals, powerful purchasers, and providers. Bordean, Borza, Nistor and Mitra ( 2010 ) stated organisation that prosecuting cost leading may use following factors ; accurate demand prediction, high capacity use, economic systems of graduated table, technological advantages, outsourcing and learning/ experience effects. Cost advantage and economic systems of graduated table which experience by organisation will heighten the value of the concern and aid to cut down from five forces menaces ( Nandakumar et al. , 2011 ; Hilman, Mohamed, Othman and Uli, 2009 ; Porter, 1980 ) .

2.1.1.2 Differentiation scheme

Differentiation scheme is comparatively on offering superior, different and alone merchandise or service to the client by an organisation ( Hlavacka et al. , 2001 ; Porter, 1980 ) . In distinction scheme, organisation considers clients as their first precedence ( Hilman et al, 2009 ; Hyatt, 2001 ; Porter, 1980 ) . Specifically, an organisation which attempts to prosecute a distinction scheme tends to be more client oriented ( Frambach et al. , 2003 ) . The literatures showed that distinction scheme accent more on making value added merchandises or services through the singularity which contrasting to the low cost scheme. Normally, organisation which prosecuting distinction scheme charges higher monetary value for the merchandises or services due to the singularity and quality characteristics ( Hilman, 2009 ; Venu, 2001 ; Porter, 1980 ) . Customer trueness and hard to copy of singularity will make sustainable competitory advantage for organizations.In fact, distinction scheme increases clients involvement in purchasing unique and quality merchandises or services ( Allen and Helms, 2006 ; Hlavacka et al. , 2001 ; Venu, 2001 ) . For case, presently hotels are using WI-Fi as a tool of distinction ( Bordean et al. , 2010 ) .

2.1.2 Market Orientation

Narver and Slater ( 1990 ) defined market orientation as civilization, efficaciously and expeditiously created a necessary behavior for superior value to the client. Furthermore, client orientation, rival orientation and inter functional coordination are the behavioral constituents of market orientation for long term focal point and profitableness. In add-on, Narver and Slater ( 1990 ) stated that behavioral position of rival and client orientation reflect the organisational civilization within the organisational value and norms.

Based on Zhou et Al. ( 2009 ) two constituents of market orientation ; client orientation and rival orientation focused on understanding possible clients and the strength, failings, capablenesss and schemes of bing and possible rivals. Meanwhile, 3rd dimension, inter functional coordination emphasised on coordination of resources and activities in the organisation. However, the anterior research workers admitted that inter functional coordination was critical for reacting to market intelligence ( Zhou et al. , 2009 ; Kohli and Jaworski, 1990 ; Narver and Slater, 1990 ) . In add-on Zhou et Al. ( 2009 ) stated that contention exists sing the functions of client orientation and rival orientation impacting organisational public presentation. Furthermore, Day and Wensley ( 1988 ) mentioned that client and rival orientations were two of import constituents that firm utilizes to interact with the environment. Therefore, this survey will look into the effects of rival orientation and client orientation merely.

2.1.2.1 Competitor orientation

Competitor orientation observes the rivals closely, understands short term strength and failing and long term capablenesss every bit good as schemes of current and possible rivals ( Narver and Slater, 1990 ) . Based on Zhou et Al. ( 2009 ) rival orientated organisation used the rivals as a mention to place their advantage and disadvantage. Additionally, rival orientated houses emphasised on cost decrease by merely copying their rivals instead than developing advanced merchandises and services which could take to industry equilibrium ( Kumar, Jones, Venkatesan and Leone, 2011 ; Zhou et al. , 2009 ) . Based on Mueller et Al. ( 2001 ) rival orientation assisted organisation to understand the feature of competitory market. Specifically, rival orientation needed sourcing information about rivals, rival ‘s activities, offerings and market potencies ( Mueller et al. , 2001 ) . Additionally, Miller ( 1989 ) as cited in Kumar et Al. ( 2011 ) said rival orientation is necessary for an organisation which prosecuting cost leading in order to obtain new thoughts for greater efficiency. The findings of research conducted by Frambach et Al. ( 2003 ) showed there were positive relationships between cost leading and rival orientation. Therefore, intending to state that the research workers found similarities in features between cost leading and rival orientation where these elements accents on cost decrease and better efficiency than rivals.

2.1.2.2 Customer orientation

Harmonizing to Zhou et Al. ( 2009 ) client orientation emphasised apprehension of the mark clients adequately in order to make superior value for them. Furthermore, roll uping, analyzing and circulating information about the clients, assist the client orientated organisation to anticipate the client ‘s changing demands and rapidly react via invention ( Zhou et al. , 2009 ) . Customer oriented organisation makes more appealing offerings by seting the selling mix with the cognition of a clients desire ( Safarnia et al. , 2011 ; Porter, 1985 ) . In add-on, when an organisation clearly recognises the spread between clients desire and market offerings, it can expeditiously make full the spread with capablenesss and resources through successful invention ( Slater and Narver, 1998 ) .

Besides that, Zhou et Al. ( 2009 ) explained that client orientation besides enables organisations to develop a competitory advantage based on market distinction. In add-on, Slater and Narver ( 1998 ) and Day ( 1994 ) stated that client orientation extremely motivated to supply alone offerings to run into the demands of the mark clients. Findingss of the survey conducted by Frambach et Al. ( 2003 ) indicated a higher value of distinction scheme which is positively related with client orientation. The literatures showed that distinction scheme and client orientation have similarities in characteristic where these attacks emphasise on making alone merchandises or services in order to run into the clients demands and wants every bit good as achieve client satisfaction and competitory advantage.

The above literatures clearly indicated similar features between cost leadership- rival orientation and differentiation- client orientation, but really limited empirical grounds available associating to the association of above mentioned variables.

2.1.3 Competitive schemes, Market orientation and Organizational Performance

Porter ( 1980 ) mentioned that generic schemes facilitate organisation to accomplish competitory advantage. Cost leading scheme and distinction scheme enable organisations to concentrate more efficaciously and procure better public presentation than an organisation which ‘stuck in the center ‘ ( Hilman et al. , 2009 ; Porter, 1980, 1985 ) . Many surveies were found important association between competitory schemes and organisational public presentation ( Nandakumar et al. , 2011 ; Hilman, 2009 ; Seedee et al. , 2008 ; Allen and Helms, 2006 ) .

The construct of market orientation effects on concern public presentation is a affair of extended research and the association has been good established ( Razghandi, Hashim and Mohammadi, 2012 ; Ellis, 2006 ; Kirca, Jayachandran and Bearden, 2005 ) . The relationship between generic schemes and market orientation is built on consideration of market orientation as a functional degree scheme ( Frambach et al. , 2003 ) . Anterior literatures indicated that appropriate functional degree schemes contributed to the effectivity of concern schemes ( Slater and Olsen, 2001 ; Porter, 1980, 1985 ) .

Harmonizing to Frambach et Al. ( 2003 ) the extent of behavioral constituents of market orientation viz. rival and client orientation depends on the concern scheme implemented by the organisation. The consequence of the survey conducted by Lukas ( 1999 ) revealed that market oriented behaviour alteration consistently when organisations implemented assorted types of schemes.

This survey drew upon the model of scheme ( competitory scheme ) , structure/dimension ( market orientation ) and organisational public presentation. This proposed model is besides drawn based on degrees of organisation scheme which indicated concern degree scheme ( competitory scheme ) , functional degree scheme ( market orientation ) and public presentation. The model is best illustrated in the undermentioned simple paradigm.

Competitive scheme Market orientation Organizational public presentation

( Pure generic schemes ) ( Competitor/Customer )

The principle of this paradigm is that combined effects of competitory scheme ( independent variable ) and market orientation ( interceding variable ) influence organisational public presentation ( dependent variable ) .

2.1.4 Proposed Hypothesiss

The primary research inquiry of this survey is to find the extent to which specific market orientation mediates the specific competitory scheme in its relationship with organisational public presentation. Given the spread in the literature on this position, this survey intends to turn to the proposed hypotheses.

H1: Hotels prosecuting a cost leading scheme mediating by rival orientation

bring forth better organisational public presentation.

H2: Hotels prosecuting a distinction scheme mediating by client orientation

bring forth better organisational public presentation.

3. Methodology and Research Design

This survey chooses a quantitative cross-sectional study method. Therefore, the informations will be collected merely one time and stand for the issue at a specific clip. This survey is aimed to look into the influence of market orientation as a go-between in the relationship between competitory scheme and organisational public presentation.

3.1 The Sample

The unit of analysis of this survey is organisation. This survey will analyze 3 star to 5 star rated hotels in Malaysia. The current population is 452 hotels with 3 star to 5 star evaluation in Malaysia. Based on the Krejcie and Morgan ( 1970 ) tabular array, the sample size will be 210 hotels stand foring 47 per centum of entire population. The sample will be chosen from the Ministry of Tourism Malaysia directory. Furthermore, simple random trying techniques will be used to choose the samples. The respondents are from the hotels top and in-between direction, who are involved in the strategic determination doing procedure.

3.2 Research Instrumentality

This survey adapted an instrument developed and tested by Auzair ( 2011 ) . Eleven inquiries sing pure generic schemes will be used to operationalise the competitory schemes. For market orientation, instrument developed and tested by Grawe, Chen and Daugherty ( 2009 ) will be used. Ten inquiries sing rival and client orientation will be used to operationalise market orientation. For the organisational public presentation, this survey will unite instrument developed and tested by Chen, Hsu and Tzeng, 2011 ; Razalli, 2008 ; Kim and Lee, 2007 ; Evans, 2005 ; Denton and White, 2001 ; Kaplan and Norton, 1996. Twenty inquiries sing fiscal and non-financial step in balanced scorecard scene will be used to operationalise organisational public presentation. So, subjective attack will be used to find the public presentation of hotels related to their rivals over the past five old ages. Pilot survey will be conducted by administering mail studies to 30 hotels that are selected indiscriminately.

3.3 Data analysis processs

The descriptive analysis will be used to execute informations cleaning and testing to look into any abnormalcies. In add-on, T-Test and ANOVA Test will be conducted to verify non-response prejudice. This survey will utilize Cronbach Alpha to bespeak the dependability of the instrumentality. The cogency of the survey will be measured through face cogency, content cogency and concept cogency ( factor analysis ) . Therefore, the interceding function of market orientation on the relationship between competitory scheme and organisational public presentation, will be tested based on multiple arrested development suggested by Baron and Kenny ( 1986 ) . The four measure attack suggested by Baron and Kenny ( 1986 ) will be conducted to analyze the above mentioned hypotheses. Additionally, Sobel, Aroin and Goodman Test will be conducted to guarantee the go-betweens carry the influence of the independent variable to dependent variable.

4.0 Decision

This survey will find that specific competitory scheme with specific market orientation would bring forth better organisational public presentation and achieve competitory advantage. Specifically, this survey will look into the mediation consequence of rival orientation on the relationship between cost leading scheme and organisational public presentation and the mediation consequence of client orientation on the relationship between distinction scheme and organisational public presentation. This survey will supply of import information for determination devising procedure, anticipating that findings of this survey would help hotels direction to do precise determination, program, follow and implement the appropriate strategic attack in order to accomplish greater results by incorporating competitory scheme, market orientation and organisational public presentation. Therefore, these analyses will beef up hotel industry ‘s fight and organisational public presentation in order to accomplish NKEA docket.

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