Case Study Sample Online

Assessment 3: Scenario workshop

Overview

Increasingly, a creation of new market value is becoming central to successful innovation. You are required to select an industry in a market of your choice in order to apply Kim and Mauborgne (1999)’s New Value Curve for creating new market value.(pdf attached)

Details

The Scenario workshop requires you:

• Identify an industry in a market where new market value creation has been undertaken
• Articulate and justify the role of new market value creation in the context of your selected industry
• Evaluate the strategies that have been used to create new market space in this industry

Essays should not exceed 1,000 words, using size 12 point font with 1.5 line spacing format. Essays must be fully and accurately referenced or they will not be graded.

Students should aim for a 10 percent to 15 percent Plagiarism similarity index with direct quotes properly referenced with quotation marks, source and page number (please contact the instructor if you need advice regarding Harvard referencing).

INTRODUCTION

The creation of a new market space necessitates out of the box thinking. Strategic plans must be designed outside typical patterns and comfort zones. Working systematically outside established boundaries, strategic managers can identify virgin territory that allows significant value addition for the company (Richards and Wilson, 2006). This type of value addition allows individual players to gain grounds and redefine the industry as a whole. The influx of travelers to Australia for adventure sports (Sigala, 2015), the cultural and historical tourism promoted by New Zealand , and so on bears testimony to the need for the modern tourist to partake in newer experiences that would enrich his thinking and outlook (Fairweather and Swaffield, 2003), (Hartman, Meyer and Scribner, 2009).

IMPACT BY SUBSTITUTE INDUSTRIES

Cross elasticity of demand is the most technical definition of the process that involves addressing competitors not only within the same industry but from diverse and distinct industries as well. For instance tourism has today diversified into several interesting dimensions that are the result of such strategic initiatives. Medical tourism, ayurveda and well being tourism, sex tourism, religious tourism, cultural tourism and adventure tourism are just the tip of the iceberg. For instance the concept of combining tourism with availing specialized medical treatments in certain countries has lead to the very popular ayurveda and well being tourism. This level of sophistication and specialization allows certain countries to capitalize on their assets and create a new market within the existing industry (Cànoves et al., 2012). For instance, regular tourists may include themselves into this niche, however, the target market segment would be a group of health conscious individuals who are ready to try out a new dimension in health and well being using Ayurveda, that provides holistic well being and medical care.

IMPACT BY STRATEGIC GROUPS

Industries can be classified into different strategic groups based on their performance and price. Looking at this rationale, tourism was traditionally divided into budget travel, family holidays and luxury vacations. Each market segment had a clearly defined market segment and an appropriate marketing strategy. However, tourism has now diversified to cater to a new value conscious market segment that enjoys innovations and new experiences (Hartman, Meyer and Scribner, 2009). Thus, a budget cruise would combine the luxury of a cruise holiday while still remaining on a budget. Similarly, with the advent of nuclear families, family holiday packages are gaining importance. These packages need to cater to a diverse group of persons across various ages and is designed to include all persons in various activities that allow them to bond rather than catering to individual preferences. Such package would include a stay in a Villa for the duration of the holiday, thus allowing the family to enjoy the thrill of extended family including a whole host of cousins, aunts and uncles alongside parents, grandparents, siblings and children. Food would be catered to by independent cooks who would pamper the culinary buds of all members of the groups. The focus of the package would be bonding rather than mere sightseeing and all activities would be centered on the theme. So shopping sprees in the shopping district would allow individuals to look out for their own tastes (LeHew and Wesley, 2007) and camping would include campfires and trips down memory lane (Moscardo, 2017).

CATERING TO A CROSS SECTION OF THE POTENTIAL MARKET

It is interesting to note that marketing is no longer done for niche market segments. For instance budget travels would love a value addition like a high end hotel accommodation or a free spa treatment thrown in with the pack, while luxury vacationers would like to enjoy newer experiences like an adventure or a new cuisine or even a new sport. Tourism is now trying to formulate individual packages rather than limit themselves to a one size fits all package that was the norm a decade ago. By allowing for products that cater to a cross section of potential and existing market segment, the tourism industry has been able to reinvent itself in tune with the modern ideology (Rátz, Smith and Michalkó, 2008). The value accorded by different classes of tourists to the same service forms the base on which this ideology rests. For instance a spa treatment would be highly appreciated by a heath conscious traveler. A person looking at an exotic experience would be inclined to try out the treatment for the new experience. The budget travel would enjoy the Spa as a special opportunity to be a part of the high life. However, a family with small children would not be able to appreciate the value addition as they would not be able to enjoy the experience. They would instead prefer a babysitting service or an outing to a children’s park instead of the Spa treatment.

COMPLEMENTARY PRODUCTS AND SERVICES

Oftentimes factors beyond the controls of the industry also exert an influence on its economic viability and sustainability. In the tourism industry an outbreak of any contagious disease would affect the movement f travels, similarly political unrest, ease of getting bookings, and peers also influence the final decision with regards to destination for most tourist. Despite the heavy advertisements, word of mouth is also critical for the success of the enterprise. The industry needs to appeal to potential customers on an emotional level to establish a mutually beneficial relationship (Bødker and Browning, 2012).

CONCLUSION

Redefinition of industry standards is the norm especially with traditional industries reaching saturation points. Tapping into newer market segments is now essential for survival in the market (Sigala, 2015). The changes in thinking and ideology of modern day travelers are also a major contributing factor to the changes being seen in the tourism industry on a global scale. The ease of movement between countries, the need for widening their horizons and the creation new experiences to enrich themselves forms the basis of the new strategic initiatives being seen across the tourism industry on a global scale