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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:

0261-5177/01/$- see front matter 2001 Elsevier Science Ltd. All rights reserved.PII: S 0 2 61 - 5 1 7 7 ( 0 1 ) 0 0 0 1 0 - 3

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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


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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;


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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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