The aim of this study is to explore and find out the applicability of coopetition strategy among hotels in the case of London small hotels by taking the views of hotel managers/owners into consideration. To achieve this aim, a quantitative research has been designed and conducted to 75 small accommodation suppliers (hotels) located in London. In the scope of the study a questionnaire form has been developed based on literature on coopetition strategy and data were collected by face to face interviews. By using explorative and descriptive statistic techniques on collected data, the participation levels of hotel managers/owners have been defined. According to results of the research there are not strong cooperative relations amongst small hotels in London. In conclusion it is understood that competitive behaviors are more dominant rather than cooperative and coopetitive behaviors. Hotel managers/owners believe that cooperating with their rivals will improve competitive conditions of London hotel industry but in current position they aren’t cooperating and competing simultaneously. Few of the managers/owners have defined the current conditions of hotel industry as “coopetitive.
Keywords: Coopetition StrategyHotelsLondon
One of the issues intensified the debate in the literature and the dilemmas on it are competition and cooperation among businesses. There is a dead-end question “are businesses should compete or cooperate?” has been discussed by many authors and discussions are going on with new directions. However the new question is that “would it be possible to cooperate and compete simultaneously?” The word “coopetition” is seemed as the balance between the discussions on the two constructs. Coopetition is one the concepts that intense debates made on entered to business and management literature in recent years. According to traditional management thoughts this concept is firstly used by Nadar who was the CEO of Novell. Coopetition has been examined later by Brandenburger and Stuart (1996) and Brandenburger, & Nalebuff (1996) in terms of business strategy. Coopetition is defined as a strategy based on competition and cooperation relation between two or more businesses. This cooperation and competition is means cooperative movements between competitors (Gurnani, et al., 2007). Namely, if a firm cooperate with one or more its competitors while sustaining competition this case is conceptualized as coopetition. For instance, on the one hand doing co-operation on issues of purchasing and on the other hand competing on manufacturing and marketing is an example of coopetition between businesses (Laine, 2002). Although hotel businesses carrying out their activities separately from each other, they need to work together to improve the overall quality of the touristic product, and are obliged to reveal that this condition makes it difficult to distinguish between cooperation and competition between hotel businesses (Grängsjö, 2003). This case states to us coopetition strategies needs to be research between hotel businesses in particular. This study organized as defining the concept of coopetition in detail by taking theoretical and empirical papers, designing a research method and material, research section and discussions based on the results. In the research part it is aimed to find out the applicability of coopetition amongst hotel businesses in the case of small hotels located in London. The applicability of coopetition has been considered in five dimensions as perception of competition, cooperative, competitive, coopetitive behaviours and benefits of coopetition. By doing an explorative and descriptive analyzes the participation levels of hotel managers/owners to the statements directed under these five dimensions have been defined. Beside that the impacts of some demographic factors on applicability of coopetition have been determined. According to results of the research there are not strong cooperative relations amongst small hotels in London. Despite there are some limitations, it is expected that this study will contribute to exist literature on coopetition and future studies will be conducted in the hotel industry.
Literature Review and Theoretical Framework
An extensive and critical review of the literature of general business indicates that a range of different terms - coordination, collaboration, co-operation and competition - have been used to describe the working relationships between and among businesses (Wang and Krakover, 2008). Some forms of working relationship between businesses are formal whereas others are informal. In recent years the concept of co-opetition (derived from competition and cooperation) emerged in the management literature and has been widely discussed. The literature on competition emphasizes the benefits of cooperation between organizations which compete with each other. The arguments show that cooperation and competition could be carried out together. Dagnino (2009) states that competition based on cooperation means to carry out the competition and cooperation simultaneously. For the authors, competition based on cooperation appears to be good at first, but is a complicated competitive behaviour which redefines the dynamics between the organizations in practice.
In academic as well as practitioner literature, many have been credited with inventing the term co-opetition, however, its principles and practices were only fully articulated in the 1996 book,
Is it possible to carry out these different types of actions simultaneously? Which conditions are convenient for a company to doing these actions? The relationship between Kodak and Fuji Companies is a good example of co-opetitive strategy. While these two firms compete with each other in photographic paper, they make joint investments in R&D (Gnyawali et al., 2006). A coopetition strategy promotes cooperation with competitors without giving up competition. There are some approaches evaluating the benefits of competition based on cooperation for the organizations in different respects. Dagnino (2009) who considered coopetition as a way of adding value says that organizations will maximize the economic value and the value based on knowledge thanks to co-operation at different levels. When the literature on co-opetition reviewed it is seen that several authors have examined the subject from different perspectives. Chin
The leadership of the management
Relationships based on trust
Clash management system
Sharing the risk and information
Information system support
Cooperation among competitors is valuable even if they may conflict each other because of unexpected and irresistible internal and external difficulties. In the study of Tidström (2009) conducted to transportation and natural product industry in Finland it has been founded that conflict in inter-competitor cooperation can be related organizationally, relationally or externally. Organizational causes of conflict in inter-competitor cooperation can be either operational or normative, while relational causes can be strategic or normative The author has explained that there are several actors (e.g. suppliers, salesmen, customers and political actors) may influence conflicts in intercompetitor cooperation (Tidström, 2009).
When coopetition is evaluated in terms of the tourism sector some perspectives and research issues arise. For example, according to Grängsjö, (2003) owing to the complexity of the tourist product most firms in a tourist destination are interdependent on one another. As well as being competitors they also have to work together on creating the destination image to upgrade the overall quality of total tourist product. So to distinguish cooperation from competition becomes difficult in such case. Grängsjö, (2003) has underlined the reason of coopetition in terms of difficulties in marketing of a tourist destination such as there are many stakeholders have had been involved and their aims, goals and motivations co-existed. So in a geographically-limited area, different enterprises exist side by side, and are obliged to cooperate with each other. Belleflamme and Neysen (2009) proposed some conditions of coopetition in the tourism sector in terms of e-tourism applications. They mentioned electronic marketplaces (EMPs) and the online information platforms (OIPs). According to the authors whereas EMPs allow buyers and sellers to operate and to conclude online transactions, OIPs focus more specifically on the informational exchange without playing a role in the transaction. In the tourism sector both of them exist; as OIP’s online directories, web portals, classified ads and as EMP’s online booking centres or electronic travel agencies Customers can find flights, accommodation, leisure parks, restaurants and choose a product, carry out the reservation, and even secure the payment of the stay by electronic payment in portal. On the one hand, both types are characterized by the paradox of any participation in a marketplace: by offering similar goods and services, all the suppliers present on an EMP or an OIP are competitors, but at the same time they collaborate in making this virtual marketplace successful.
In a study carried out by Ingram and Roberts (2000) on the hotels in Sydney, it was stated that the cooperation between the hotels competing with each other might lead to friendships. It was emphasized that the friendships mentioned could be the ones that would improve the cooperation between competitors and be effective in making the performance of the organizations better. The benefits that competitive understanding based on cooperation will bring for hotels are as follows (Ingram and Roberts, 2000):
Improvements in performance,
Advantages that will be provided by mutual information sharing,
Eliminating the structural differences that the customers meet in the hotels,
Being able to observe the competitors in a more normative way and
Improvements in the financial outputs.
When the literature is examined it can be seen that there is a lack of research on the topic of co-opetition related with hotel businesses. Hotel businesses could be divided into two groups, i.e. hotels which attract tourists independently and hotels which depend on the attractiveness of a tourist destination. The hotels in the second group are also the components of touristic product. Touristic product can be defined as a set of goods and services such as travel, transport, accommodation, food and beverage, entertainment and souvenirs purchased by tourists mainly related to an individual's trip. Therefore, hotel businesses which attract the tourism demand depending on the tourist destination a part of touristic product. Eventually, although hotel businesses carry out their activities separately, they need to work together to improve the overall quality of the touristic product (Grängsjö, 2003). In the study conducted by Kılınç
To contribute to the knowledge and awareness about coopetition amongst London hotels,
To define the advantages of co-opetition for the hotels and
To determine the degree of cooperation with competitors in the hotel industry in London.
By taking the aim and scope of the study into consideration the hypothesis have been defined.
By using of quantitative research method and analysis techniques the values of hypothesis specified will be examined in the nature of working relationships amongst hotels in London.
This research will analyses
The population of this research is determined as the hotel located in Westminster region of London. Hotels in London are concentrated in the central area, but have increasingly been distributed more evenly across London after 2006 (London, 2006). Although leading brands have invested in London tourism market today still most hotels in London are bed &breakfast hotels, especially the hotels in Westminster. The reasons why this region selected are hotels in this region have been concentrated in geographically-limited area, closed to each other and their closeness to their customers are similar. According to the Report on Hotel Demand Study for London, there are some key challenges in relation with The Mayor of London's London Tourism Vision for the period 2006 to 2016. These are (London, 2006):
Use of the internet in booking and planning trips
New and emerging markets placing different demands
Integration with inward investment
Emergence of new technology (e.g. mobile phones, ticket-less travel)
By taking the challenges mentioned above into consideration it is expected that this research will contribute to Tourism Vision of London. Because of co-opetition strategy is seen as a way of gaining competitive advantage in global competition in this research it has been focused on coopetitive relations between London hotels.
This research has been conducted with approaches of the descriptive research which provides systematic and useful information about cases and reveals the relations between the cases (Aslanoğlu, 2012) and the explanatory research which makes the case be understood better, the problem clearer and defines the variables to be studied on (Gates and McDaniel, 2010). A quantitative research was pursued to reach the aim and objectives mentioned. The quantitative research is defined as the research type that gives the data by numbers in an observable, measurable and generalizable way by approaching the events and cases with a realistic view (Golafshani, 2003:597-598). The research design has been formed based on research aim and objectives as shown in Figure
Questionnaire form has been used as a means of data collecting so as to fulfill the aims of the research based on survey method. A survey is a list of questions arranged according to a certain aim and plan. Survey method which is a way of data collecting through correspondence is generally preferred in researches on social sciences (Yazıcıoğlu, and Erdoğan, 2004 and Bas, 2001). Why the survey technique was used in this study was that the advantages of survey technique were benefitted and the research topic was appropriate to be searched with this method. The questionnaire was prepared by considering the questionnaire preparation principles determined by Sekaran (2003) and the principles and rules in preparing questionnaires written by Baş (2001) and Yazıcıoğlu and Erdoğan (2004). In this respect, the principles such as determining the ways of expressing and evaluating and principles related with general appearance were given importance in the questionnaire. Propositions supported by the literature on co-opetition strategy and close-ended questions on certain characteristics of the hotels have been included in the questionnaire. In the questionnaire, the participation level of the hotel managers in the expressions related with possibility of co-opetition strategy have been rated on Likert Scale of 5. The questionnaire developed by scanning some specific studies in the related literature (e.g. Bengtsson and Kock 2000; Gnyawali et al., 2006; Dagnino, 2009 and Kılınç et al., 2011). Data of the research have been collected through phoning and face to face interviews with hotel managers. In the light of references on statistical analyses, the descriptive and exploratory analyses of the data obtained have been conducted. It was examined whether the factor analyses made for the expressions in the questionnaire formed a meaningful structure with the evaluation means developed for the possibility of co-opetiton strategy or not. After that, ANOVA and T tests have been done in order to determine the differentiation co-opetition strategy depending on some characteristics of the hotel businesses and hotel managers.
In this research it is aimed to find out the applicability of coopetition strategy by taking the point of views of hotel managers/owners from London small accommodation suppliers. A quantitative research has been conducted to 75 small hotel business and the results have been indicated below. Some frequencies about repliers who filled the questionnaire form prepared for data collection have been denoted as in the following. From descriptive statistics it has been seen that Male repliers are more than Females, most of repliers have Bachelor’s Degree and % 41 of them are working in the hotel industry equal or less than 5 years. It is also determined that most of participants are manager and there is equality in defining the market position of the hotel they are managing with % 34 competitive and % 35 coopetitive. On the other hand in this research some descriptive and explorative analysis done to find out the participation levels of repliers to the statements directed in the questionnaire form. Firstly Reliability statistics have been determined for 45 items in the scale and Value for Cronbach's Alpha is computed as ,870 in SPSS 20. In table
It can be seen that the highest mean for dimensions is belong to “competitive behaviors” nearly “mostly agree” and the lowest mean belong to “cooperative behaviors” “Neither agree nor disagree”. It is seen also participation levels to Simultaneous Cooperation and Competition is about “Partially agree”. In the analysis it is decided to determine the correlations between the dimensions and they have been correlated. Results have been shown in table
It can be said that there are more than one correlation between the dimensions at 0.01 level (2-tailed). The two strongest correlations are identified between CoPB and PC with rated ,532 and between CooPB and BC with rated ,456. There is only one correlation couldn’t be determined and it is between CoMB and CoPB. It is needed to find out whether there are differences in participation level to the statements based on demographics or not. Some diversity analysis has been conducted to dataset to determine these differences. In table
Based on the Independent Samples Test it can be seen from t and sign values there is no any meaningful difference in participation levels of repliers to the statements. In this case Hypothesis 2:
According to ANOVA Tests there are no any differences in participation levels of hotels managers/owner based on their education levels, their positions and working experiences in the hotel industry. Therefore
According to results in table
Conclusion and Discussions
In this study an explorative research has been performed by taking the views of managers/owners from London hotel industry. It has been reached 75 totally small hotels from London city center, especially from Edgware Road, Oxford Street and Victoria. So the results of this research should be considered in terms of small hotels in these areas. According to results of the research the current competitive conditions are being percepted as intense. Hotel managers/owners think that even their hotel is located in a very competitive environment; they don’t behave aggressively against their competitors. From descriptive statistics it can be understood that there is peaceful competition amongst small hotel in London. This can be a result of their location that most of them are next to each other. The participation levels of hotel managers/owners are not too high to the statement directed under cooperative behaviours against rivals. Even if they believe that there are some areas in which they could cooperate, there cannot be said that they cooperate as much as possible exactly. This result overlaps with the research of Kılınç et al. (2011) and it can be said that hotels don’t aware of the advantages as defined by Ingram and Roberts (2000) about coopetitive links with rivals. The mostly agreed competitive actions by hotels are providing best services to customers and advertising intensely to become the most preferred hotel amongst near competitors. By the main question of this research was whether the coopetition (simultaneous cooperation and competition) is possible or not that has been expected highly between hotels. But it is concluded that hotel managers/owner didn’t agreed strongly to the statements related with coopetition. It has been understood that hotels believe that cooperating with rivals will improve competitive conditions of London hotel industry but ın current position they aren’t cooperating and competing simultaneously. Only % 8 of them defined the current markets conditions as “coopetitive”. Based on results of the research it can be said that because of the
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20 December 2017
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Ağraş, S., & Jones, E. (2017). Is Coopetition Strategy Possible Among Hotels? Findings From London Hotels. In & M. Özşahin (Ed.), Strategic Management of Corporate Sustainability, Social Responsibility and Innovativeness, vol 34. European Proceedings of Social and Behavioural Sciences (pp. 146-159). Future Academy. https://doi.org/10.15405/epsbs.2017.12.02.13