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*Corresponding author: Norwegian School of Management BI,
POB 580, N-1302, Sandvika, Norway. Tel.: #47-6755-72-39; fax:
#47-66-981-938.
Tourism Management 22 (2001) 445}461
Strategic success in winter sports destinations: a sustainable valuecreation perspective
Arvid Flagestad*, Christine A. Hope
Norwegian School of Management BI POB 580, N-1301 Sandvika, Norway
University of Bradford, Management Centre, Emm Lane, Bradford, West Yorkshire, BD9 4JL, UK
Received 23 November 1999; accepted 28 June 2000
Abstract
According to annual reports of European and North American ski resort corporations, winter sports destinations are facing
stagnating markets and at the same time challenges in the management of environmentally sensitive mountainous areas and villages.The survival and development of winter sports destinations are to a large extent centred around strategies for creating competitive
advantage and at the same time meeting the criteria of sustainable tourism laid down by the WTO. In this paper, performance on
these two dimensions is combined into the concept of strategic performance. Sustained value creation is suggested as a goal of
strategic performance in winter sports destinations.Two new models related to the strategic analysis of winter sports destinations are
developed. The"rst is a suggested con"guration of value creation in winter sports destinations*the `value fana*and the second is
a conceptual organisational model providing a framework for analysis at strategic level of such destinations. The models have
emerged from examining the central body of literature in the "eld of strategic management. Development of the models is part of
ongoing research into what kind of organisational structure of winter sports destinations will lead to superior performance in terms of
strategic success. Here the concepts of the `community modela and the `corporate modela of destination management are
introduced. 2001 Elsevier Science Ltd. All rights reserved.
Keywords: Winter sports destinations; Sustainable competitive advantage; Strategic management; Destination management; Organisational struc-
ture; Value con"guration; Value creation
1. Introduction
The World Tourism Organisation (WTO) o!ers the
following o$cial de"nition of sustainable tourism (WTO,
1993):
`Sustainable tourism is de"ned as a model form of
economic development that is designed to:
Improve the quality of life of the host community
Provide a high quality of experience for the visitor, and
Maintain the quality of the environment on whichboth the host community and the visitor depend.a
In this paper, the authors consider how theories of
strategic management may be applied to Winter Sports
Destinations in order to aid them achieve strategic suc-
cess in line with the WTO's de"nition of `Sustainable
Tourism.a
Two new models are developed: the `value fanawhich
explains the creation of value in a destination and a con-
ceptual model of a winter sports destination for strategic
analysis purposes.
2. Theories of strategic management
Strategic management is concerned with `2 the man-
agement processes and decisions which determine thelong-term structure and activities of the organisationa(Constable, 1980 in Thompson 1993, p. 6). Porter (1996,
p. 77) states that strategy at the general management level
is `2de"ning and communicating the company's
unique position, making trade-o!s, and forging "t among
activitiesa. In their discussion of"rms'strategy (Rumelt,
Schendel, & Teece, 1994, p. 9) o!er the following descrip-
tion of strategy:
Because of competition,"rms have choices to make
if they are to survive. Those that are strategic include:
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Fig. 1. A model for building competitive advantage from strategic management theory.
organisation economics (IO) concerning market power
and pro"tability. His work on competitive strategy fo-
cuses in a new and sophisticated way on the environment
of the "rm. `The essence of formulating competitive
strategy is relating a company to its environmenta(Por-
ter, 1980, p. 3). Porter considers the environment as an
area of intensive rivalry between buyers, suppliers and
competing"rms driving industry competition. Thus his
concept of `
the "ve competitive forcesa
(Porter, 1980) isa basic tool of strategy analysis and formulation by
means of his perception of structural determinants of the
intensity of competition. In order to counter the competi-
tive forces Porter describes the three generic strategies:
overall cost leadership, di!erentiation and focus. Porter's
(1980, p. 37) term di!erentiation means creating
`2something that is perceived industry wide as being
uniquea. Porter has the basic view that each function and
activity a"rm performs*as well as interaction between
these elements*may be a source of competitive advant-
age. For the purpose of analysing the "rm and identifying
sources of competitive advantage Porter introduces the
concept of the value chain (Porter, 1985, p. 33) which `2disaggregates a "rm into its strategically relevant activ-
ities in order to understand the behaviour of costs and
the existing and potential sources of di!erentiationa.
2.3. The RBV and the Porter perspective (IO): two
complementaryxelds of strategic discussion
It is suggested here that the RBV and Porter perspect-
ive (IO) may be seen as complementary streams of theory
in strategic management and in the development of sus-
tainable competitive advantage as shown in Fig. 1. This
has also been pointed to in di!erent ways and with
various degrees of emphasis by some strategy authors
(Amit & Schoemaker, 1993; Barney, 1986, 1991; Conner,
1991 (analyses of di!erences and similarities); Foss, 1996;
Foss & Eriksen, 1995; Ghemawat, 1991; Grant,
1995; Mahoney & Pandian, 1992; Schoemaker & Amit,
1997). However, both areas (IO and RBV) have their
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Table 1 (continued )
Activities, resources and capabilities in the destination value
creation process
Key insights from the literature
Tourism literature:
Bieger (1996)*Role of DMO, destination management function
Evans, Fox, and Johnson (1995)*The role of quality elements in destinations
Freyer (1993)*DMO, political and non-pro"t management organisationGoeldner (1996)*More systematic approach to management is needed. Envir-
onmental ethics
Gunn (1994)*Positive externalities
Inskeep (1991)*Co-ordinanating role of DMO
Kaspar (1995)*Limits of DMO, management function, harmonisation of
goals
Staub (1990)*Corporate management applied to the destination
Zelfde et al. (1996)*Major di!erences in management systems
Clusters/alliances/relations Kay (1995)*Innovation, relational contracts, external architecture
Porter (1990)*Clusters foster innovation and upgrading
proponents and there is no sign of a unifying framework
for strategy research. Barney (1986), for instance, claims
that competitive success is more likely to arise from
resources controlled by the "rm than from analysis
directed towards the competitive environment of the
"rm. `Lurking behind this sense is a perspective in which
di!erences among "rms are taken to be the result of
unavoidable heterogeneity in specialised factors or factor
combinations rather than of purposeful di!erentiationa(Rumelt et al., 1994, p. 7 in Ghemawat, 1991). This
citation encompasses the essence of creation of competi-
tive advantage; in the RBV"rmdiwerencesemerge from(unavoidable) heterogeneity of resources, whereas the IO
perspective focuses onpurposeful diwerentiation.(L+wen-
dahl & Revang, 1997, p. 3, italics added) coin the essence
in the evolution of strategic management in stating
that
2the di!erence (in organisations) is based on unique-
ness of how they organize customers and assets and the
way they are continuously improving these relationships.
A"rm may still achieve sustainable competitive advant-
age if it is able to utilize assets in an inimitable way, even
if they are available to their competitors as well.
The contribution from the industrial organisation (IO)
analysis framework (characteristics of the industry and
the "rm's position within the industry, here centred
around Porter), helps in particular to strengthen the
dimension of relevance of resources (Grant, 1995), or as
expressed by Schoemaker and Amit (1997, p. 6), resources
being `2 in line with industry's strategic industry fac-
tors (developed at market level)a and selected in an ap-
propriate combination in order to achieve competitive
advantage.
3. Strategic success in winter sports destinations
3.1. Dexnition of a winter sports destination
A winter sports destination may be de"ned as `a geo-
graphical, economic and social unit consisting of all
those "rms, organisations, activities, areas and installa-
tions which are intended to serve the speci"c needs of
winter sports touristsa. (Adapted from Bieger, 1996;
WTO, 1993). Bieger (1998) notes that destinations can be
seen as the tourist product that in certain markets com-
petes with other products, and argues that `because themarkets linked to the products are quite stable, destina-
tions may be seen as strategic business units from a man-
agement point of viewa(MuK ller, Kramer, & Krippendorf,
1991; Bieger & Schallhart, 1997 in Bieger, 1998, p. 7,
italics added). The perception of a destination as a stra-
tegic business unit is, however, only clear when the desti-
nation's role as an organisation for service production is
emphasised as in the de"nition of a winter sports destina-
tion suggested above.
3.2. Juxtaposing `destinationaand xrma; the issue
of strategic success
The above conceptualisation of a destination has
much in common with the conceptualisation of `the
"rma within the strategy literature. However, there are
di!erences as well as similarities. Similarities appear
when applying a resource-based perspective to a destina-
tion. For example, the destination*as an analogy to
Penrose's (1959) `"rma*could be considered a `bundle
of resourcesa and to Porter's (1985, 1991) `"rma as
a `collection of interrelated economic activitiesa. Porter's
(1996) conceptualisation of `con"guration of activitiesa
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as the essential strategic task could also be valid for the
destination, similar as it is to the "rm, in relating the
destination to its competitive environment. Both the des-
tination and the "rm are units related to a competitive
market for value creation. These conceptualisations logi-
cally connect destinations to, for example, the classic
SWOP framework (Andrews, 1971) for strategic analysis.
It is therefore suggested that theories of strategic man-agement in general are relevant sources of knowledge
applicable to winter sports destinations as strategic
business units.
However, di!erences emerge when juxtaposing `"rmaand `destinationaon the issue ofboundaries. A `"rmaas
a strategic business unit has in terms of organisational
economics (Foss, 1997) typically clearly de"ned bound-
aries through ownership or control structures whereas
a `destinationamay have rather vague boundaries. Des-
tination boundaries are, following the above de"nition,
decided by customers'needs and not necessarily by sup-
ply side structures. Another fundamental dissimilarity isezciency, which might be de"ned di!erently in a "rm and
a destination. E$ciency goals have to be related to a set
of individuals and options (Milgrom & Roberts, 1992)
which makes a destination di!erent from a "rm in terms
of, for example, types of ownership to assets (Williamson,
1985), social structures, community involvement and
stakeholder relations.
Although the body of strategic literature developed for
the "rm is important and relevant the existence of dis-
similarities has implications in limiting the ability of
strategic management theories developed for the "rm to
incorporate the scope of strategic management at desti-
nation level. At the heart of strategic management of the"rm is the creation of sustainable competitive advantage
(Porter, 1985), around which most of the strategic litera-
ture is also centred. Strategic success in a destination
implies that the market performance oriented term `sus-
tainable competitive advantagea has to be seen in the
context of a wider set of dimensions connected to e$cien-
cy and the lack of clear boundaries as mentioned above.
In this paper the authors suggest that the term sustained
value creationa rather than `sustainable competitive ad-
vantagea adequately re#ects the combined community,
stakeholder and business goals of `strategic successa in
a destination. `
Sustained value creationa
, as a repres-entation of `strategic successain a destination is further
expanded on in the following section.
The use of the term sustainable competitive advantage
in a destination context also has some semantic
implications in the view of the authors. The term `sus-
tainablea in destination circumstances is often used in
connections like `sustainable developmenta, `sustainable
tourisma, `sustainable environmenta and `sustainabil-
itya and is thus semantically associated with environ-
mental issues in the widest sense (ecology, social
structure, culture).
3.3. Strategic success linked to sustainable tourism
development (STD)
The WTO de"nition of sustainable tourism develop-
ment (STD) cited in Section 1 of this paper, is interpreted
by the authors as strategic success has to be related to
economic development, into which quality of life for the
local community, quality of visitor experience and envir-onmental concern are integrated.
The literature on winter sports destination develop-
ment (e.g. Krippendorf, 1987; Gill & Hartmann, 1991;
Todd & Williams, 1996) is clear on the point that sustain-
able development, or more speci"cally management re-
lated to sustainability of the environment in the widest
sense, should be an uncompromising underlying condi-
tion for investment in tourism, particularly when tourism
is considered a driving force for economic development.
Poon (1993), for instance, argues that sustainability of the
environment should have the highest priority in tourism
development. In relation to the life cycle of a destinationexploitation of the environment is a potential reason for
a decline in competitiveness (Butler, 1980). The environ-
ment is considered to include the ecology of the natural
surroundings, the culture and heritage and the social
structure. In a community approach to tourism develop-
ment, Murphy (1985) argues that tourism should be
managed as a renewable resource industry, involving
community decision making. Community stakeholder
involvement is important for success in destination devel-
opment (Williams & Gill, 1991). An example of commun-
ity decision making is provided in Moser and Peterson
(1981). The balance between protection of the environ-
ment and being competitive in the market could behypothesised to be the essence of destination develop-
ment. This point is developed as a component of
`Tourism Development's Magic Pentagon-Pyramida(MuK ller, 1994).
A too narrow focus on economic development com-
bined with inappropriate strategies and planning has
often led to undesired consequences (noted by many
authors, for example Krippendorf, 1987; Buhalis, 1999).
Forsyth (1996 in Welford, Ytterhus, & Eligh, 1999) con-
cludes from an industry study that only a few companies
see development of sustainable tourism as their respons-
ibility. Strategic success is therefore closely linked witha conscious and ethically sound management at destina-
tion level of the issues of sustainability in the widest
sense.
Sustainability has been the focus of much tourism
research in the 1980s and 1990s but was parti-
cularly emphasised in Agenda 21 at the 1992 Rio
Conference of the World Commission on Environment
and Development (WCED) (the `Brundtland Commis-
siona). Governments and non-governmental organisa-
tions have since started a process which will lead to
a `Global Code of Ethics for Tourisma (MuK ller, 1999).
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Fig. 2. A dynamic model of strategic success in winter sports destina-
tions.
Fig. 3. The strategic performance pyramid of winter sports destination
management.
Also in the "eld of strategy and strategic management,
the concept of ethically sound behaviour has in recent
years become an increasingly important topic in guiding
the management of organisations.
Flagestad and Hope (2000) have developed a model ofstrategic success which is reproduced in Figs. 2 and 3,
based on MuK ller's (1994) Tourism Development's Magic
Pentagon-Pyramid. They argue that in supply driven
destinations, economic prosperity carries relatively more
weight than subjective well being of local residents and
employees, optimum satisfaction of guests, unspoiled na-
ture and culture. Together these dimensions create what
they refer to as `sustained value creationa.
They de"ne strategic success as characterised by
a position of sustained value creation demonstrated
through enhanced economic prosperity and wellbeing of
the host population and optimum satisfaction of cus-
tomer requirements, with no concomitant damage to the
cultural and natural environment. Sustained value cre-
ation in a perspective of the sustainability constant capital
rule would mean that economic prosperity should be
based on value creation that adds to prosperity after
compensation for the depreciation on the value of man-
made and natural capital (Pearce & Atkinson, 1992 inTurner, Pearce, & Bateman, 1994).
4. Structure of destination management
As noted by many prominent authors in the "eld of
strategic management, for example Rumelt et al. (1994),
Constable (1980), Porter (1980, 1985) and Williamson
(1985), choice of organisational design and structure is
a signi"cant element related to strategic success.
In the same way that there are a variety of ways in
which "rms organise themselves, ranging from bureau-cratic, multi-tiered organisations to co-operatives and
more loosely coupled networks, there are also various
ways in which destinations are `organiseda or
`manageda. In this section two extremes of destination
organisational structures are identi"ed; the `community
modela and the `corporate modela. Thereafter forces
driving development of organisational structures in desti-
nations are discussed.
Kaspar (1995) terms the destination as the point of
crystallisation of demand. Kaspar creates thereby the im-
plication that demand is oriented towards the destination
as such and not to the individual enterprises. Kaspar
argues that the organisational structure or administra-tive framework of the destination may be seen to have
similarities to the"rm and that the service providers of
the destination may be viewed as pro"t centres managed
within a company because they come under the umbrella
of a local destination management organisation. Bieger
(1996, 1998) expands this conceptualisation of a destina-
tion into a strategic business unitas the destination con-
tains all the facilities necessary for guests during their
stay and therefore is a genuine product and competitive
unit in tourism. Similar opinions are put forward for
instance by Weiermair and RaKdler (1994), Keller (1995)
and MuK ller et al. (1991). The destination as a strategicbusiness unit has according to Bieger a competitive posi-
tion characterised by the destination being in competi-
tion with other destinations in certain markets.
The authors of this paper suggest that this concep-
tualisation leaves the destination with strategic choices
similar to those described by Rumelt et al. (1994) in their
fundamental description of the concept of strategic
management of "rms referred to earlier in this paper.
However, the actual dimensions subject to strategic man-
agement, as well as the goal, may have di!erent charac-
teristics in a destination from those in a "rm.
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concept has the same characteristics as the `corporate
modela(see Fig. 4).
The corporate model of a destination implies that the
destination is strategically `corporate drivena due to
a dominant corporate player as described above.
However, only an extreme case would imply that the
destination is totally incorporated, which is considered
only to be a theoretical case related to winter sportsdestinations.
Many ski corporations in North America are publicly
listed shareholding companies (for instance Vail Resorts
Inc, Intrawest, American Skiing Company). The ongoing
reengineering mentioned above of some European desti-
nations, has to a large extent, been inspired by North
American ski corporations. For example Bieger (1998)
points to Flims-Laax-Falera (Weisse Arena) in Switzer-
land as a case study in this respect. In Sweden SaK len-
StjaKrnan is a similar case (Annual Report 1998/99,
SaK lenStjaKrnan).
4.3. What drives change of organisational structure in a
destination?
A fundamental question when looking at organisa-
tional structures in this paper is how to bring about an
organisational structure at destination level which has
a concern for the welfare and quality of life of the people
within a system based on the principal task of bringing
about an organisation aimed at improving economic
e$ciency?
In recent years the perfect market and general equilib-
rium proposed by the neo-classical market model havebeen overtaken by the discovery of various realistic forms
of market failure (Jacobsen, 1993). The neo-classical the-
ory was used to prove that the market through a system
of properly determined prices can solve the organisation
problem (Milgrom & Roberts, 1992). Looking at the
European*and in particular the Scandinavian*scene of
winter sports destinations, it is tempting to quote Alfred
Chandler who observed that new organisations*espe-
cially "rms*historically often were organised when
people found that market outcomes were ine$cient
(Milgrom & Roberts, 1992, p. 73).
In the following sections two theories associated withmarket failure are discussed in relation to how the organ-
isational structures of a winter sports destination emerge.
Firstly, in the theory of transaction costs,organisation is
seen as a response to market failure. However, the pres-
ent authors, while acknowledging the impact of transac-
tion costs at destination level, suggest there are limits to
the application of the theory. Secondly, the impact of
externalities between economic actors in a destination
due to market failure is believed by the authors to be
a more signi"cant driver of organisational change in
winter sports destinations.
4.4. Transaction costs in a destination
Transaction costs analysis, originating from Coase
(1937) and Williamson (1975) could provide an interest-
ing approach to explaining the development of organisa-
tional structures in destinations. Proponents of this
approach argue that the theory holds that `2organisa-
tional structure and design are determined by minimisingtransaction costsa(Milgrom & Roberts, 1992, p. 29). The
same authors, however, point to the fact that it may be
problematic to apply this approach correctly to all eco-
nomic organisations. The authors of this paper would
hypothesise that reduction of co-ordinating costs (a type
of transaction cost) in areas of marketing, booking, in-
formation, events, etc. would motivate more e$cient
organisational structures operating at lower costs at des-
tination level. Reduction of transaction costs could be
hypothesised to be one of the motives behind the devel-
opment of companies within the destination consolidat-
ing, for example, the operation of all the ski-relatedactivities in one single company (uphill transportation,
snowmaking, security, ski schools, ski rentals, etc.). In
a destination context there are, however, production
units largely independent of all others which do not need
to be co-ordinated (the bed base, restaurants, bars, retail
shopping, etc.). Or there are areas of interdependence
where due to the existence of understanding and routines
(big events, etc.) between destination players a reduction
oftransaction costsis unlikely to be achieved by introduc-
tion of some kind of hierarchical structure. The extent to
which organisational design at destination level can be
explained by the motive of reducing transaction costs has
hardly been discussed in the literature and is certainly anarea for future research.
4.5. Creation of externalities
The fact that investment in one activity in a destination
may a!ect other activities in a positive or negative way,
creates what in economic theory is called externality. An
applicable de"nition of externalities is: `2factors which
may result in a bene"t or cost to a "rm or society which
originate, in part, from outside the "rm or as an adjunct
to productive activitya(Pass, Lowes, Pendleton, & Chad-
wick, 1995). It could be argued that bene"ts are morelikely to be gained from internalising externalities than
through reducing transaction costs due to the nature of
production units within a destination as complementary
resources. The complementary character of the indi-
vidual business units (service providers) of the destina-
tion is an essential and genuine attribute in the
destination production system (Kaspar, 1995).
The discrete business units in a destination generate
various numbers of customers and when one activity
creates far more demand for another activity than
vice versa it leads to `positive externalityafor the latter
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Fig. 5. The value con"guration of a winter sports destination; `the value fana.
needs to be transformed into value conxguration analysis
and suggest three distinct value con"gurations: the value
chain, the value shop (problem solving activities, e.g.
medical treatment) and the value network (mediating
activity, e.g. telecommunications company).
The value creation process in a destination is not well
explained by the chain con"guration basically because of
the non-sequential production process in a destination.
In the chain, the output of one activity is the input of the
next activity. In a destination value to the customer isachieved through the collection of discrete service
providers; a `networka(Stabell & Fjeldstad, 1996, 1998).
The con"guration logic suggested in their value network
may be adapted to develop a value con"guration related
to a destination value creation system. However, it
should be noted that the research activity by Stabell and
Fjeldstad is related to a demand side network whereas
a destination primarily represents a supply side network.
It is suggested here that the value con"guration of a des-
tination can be illustrated through the `value fana pre-
sented here in Fig. 5. The value fan is built on the
terminology of Porter's value chain.
5.1.1. Primary activities of a destination
According to Porter's terminology, these activities are
concerned with transferring value to customers. In a des-
tination the dominant mechanism for the value transfer is
the collection of complementary:business units (ski area
operator, hotels, restaurants, entertainment, local trans-
port, medical service, police, etc.),which consequently in
the `value fanaconstitute the primary activities.
The value con"guration of each business unit is
embedded in the value system (Porter, 1985) of the
destination and has for instance, inter-linkage through
externalities, but each individual business unit has its own
discrete value con"guration. (for example the value con-
"guration of the medical service o$ce may be di!erent
from the value con"guration of a cafeteria).
5.1.2. Support activities of a destination
These are identi"ed by searching for activities and
conditions which support the performance of primary
activities (Porter, 1985). In a destination con"guration itis suggested that the following activities should be
categorised as support activities:
con"guration management (of the tourism product);
sustainability management of the environment, overall
destination planning and design;
collective services;
destination infrastructure;
comparative advantage (natural conditions).
A summary comparison of the value chain and the
`value fanais presented in Table 3 based on an adapta-
tion of a taxonomy showed by Stabell and Fjeldstad
(1996, 1998).
6. A conceptual organisation model for strategic
management of a winter sports destination
The purpose of building a conceptual model for stra-
tegic management of the winter sports destination is
to identify how the strategic tasks (concerned with
creating strategic success) and strategic management
(implementation of strategy) of the destination relate to
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Table 3
Juxtaposing value chain (Porter, 1985) and value con"guration of a destination (`value fana) based on application of value network (Stabell
& Fjeldstad, 1996, 1998). (Taxonomy adapted from Stabell & Fjeldstad)
Chain Fan destination value con"guration
Value creation logic Transformation of inputs into products Linking complementary business units
Supply side externalities
Production and consumption are simulta-neous activities
Production is horizontally interlinked
No upstream or downstream production
Primary technology Long-linked Mediating
Primary activity categories Inbound logistics Service providers:
Operations Accommodation
Outbound logistics Restaurants
Marketing Shops
Service Ski lifts
Ski schools
Entertainment
Information
Medical service
Police
Piste securityInternal transport
PTT
Etc.
Support activity categories Procurement Con"guration mgt
Technology dev. Sustainability mgt
Human resource dev. Infrastructure
Firm infrastructure Collective services
Comparative adv
Main interactivity relationship logic Sequential Simultaneous
Parallel
Primary activity interdependence Pooled Pooled
Sequential Reciprocal
Key cost drivers Scale Scale
Capacity utilisation Capacity utilisation
Key value drivers Con"guration of the destination tourismproduct
Sustainability of environment
Capacity utilisation
Business value system structure Inter-linked chains Parallel discrete value con"gurations in
co-operating and competing relationship
the goals and activities of the destination. In constructing
this relationship the elements identi"ed through disag-
gregation of the value creating process have been applied
to a destination organisational frame based on an anal-
ogy whereby the multidivisional "rm is used as a meta-
phor. This frame suggests that activities be split into twomain levels, a strategic level and an operational level,
respectively. The conceptual model presented in Fig. 6,
allows for the application of di!erent organisational
structures of the destination.
Theoperational levelconsists of the bundle of business
units represented by the individual service providers (pri-
vate companies and public services) which deliver the
tourism product* transfer value to destination cus-
tomersa (the primary activities in the `value fana). The
operational level also includes the service units' value
contribution as related to the environment (natural, cul-
tural, and social) to the tourism product. In the value
con"guration terminology these activities are support
activities for the performance of the primary activities.
The strategic level embodies the destination strategic
organisational level and the two main strategic tasks. The
"rst of these (task 1) is the management of the conxgura-tionof the destination tourism product (the mix of `busi-
ness unitsa), and the second (task 2) is the management of
sustainable development(thesustainability elements, (natu-
ral, cultural and social elements and overall planning and
design)).
6.1. Task 1: conxguration of the tourism product of the
destination
The tourism product (supply side) con"guration of
a destination is the combination of discrete services in
456 A. Flagestad, C.A. Hope/Tourism Management 22 (2001) 445}461
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Fig. 6. Conceptual model of a winter sports destination for strategic management analysis.
terms of both quality and quantity supplied by the desti-nation's operational level of service providers. Typically,
services in this respect will consist of: the ski product (lift
systems, sports activities, ski schools, ski guides, ski
rentals, repair services, etc.); the bed product (accommo-
dation facilities, restaurants, kindergarten, etc.); the vill-
age ambience (after ski, entertainment, events, shops,
etc.); and the across destination service (banks, telecom,
transport, medical service, police, information, etc.). The
important aspect of strategic positioning is embodied in
the con"guration of the tourism product. Strategic posi-
tioning of a destination is to a large extent centred on
di!erentiation. Only one destination can, by de"nition,hold the cost leadership position.
The suggested value con"guration of the destination
(the value fan) may lead to following proposition for the
con"guration management:
The strategic success of the destination will increase
when con"guration management:
promotes investments/activities creating positive
externalities;
prevents investment/activities creating negative
externalities;
A. Flagestad, C.A. Hope/Tourism Management 22 (2001) 445}461 457
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Alan MuKhlemann at the University of Bradford Manage-
ment Centre for valuable comments on previous drafts
related to this article.
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