Chapter 4 - Strategic Imperatives for Tourism SMEs in Europe

Abstract

The most recent accession of new member states to the European Union (EU) has generated a wealth of opportunities for tourism SMEs to exploit the potential demand from international tourism. At the same time, however, it has increased the level of competition amongst European tourism SMEs, which need to employ appropriate strategies to achieve their business objectives in such a competitive market. While the literature on strategic management is growing, it is still at an embryonic stage in relation to the SME sector. The strategic management theories developed within the context of large enterprises are frequently inappropriate for application within the sector of SMEs (Jones, 2003). Indeed, small firms are not scaled-down versions of large corporations (Bridge, O’Neil, & Cromie, 1998) and differ greatly both in employee collectivization (numbers and training), organizational configuration (make up and structure) and operational manner. The unique characteristics of the tourism sector within the New Europe also call for developing strategies that can address the new challenges that are present in this new competitive landscape. In particular, tourism SMEs based in the new member states — which mostly represent transition economies — possess less experience in competing in the European market. Consequently, they need to accelerate their learning curve if they are to match the strategic capabilities of tourism SMEs operating in the established EU states and to effectively compete in the European and global markets. Central to this learning process is gaining an understanding of the dynamic external tourism environment, the new and emerging stakeholder priorities and the development of capabilities and competences that would enable those SMEs to compete on an equal footing with the established European tourism SMEs. With a particular focus on the new EU member states, this chapter discusses the fundamental strategic issues and imperatives that tourism SMEs need to consider if they are to compete effectively in the New Europe. The enhancement of SME competitiveness is