Every type of product or business has a series of key success factors that ensure somehow its capacity to attract clients and compete with the best products of its category, at least within a market segment. It is therefore essential to identify these key success factors for every type of product as well as the importance of each factor for the product competitiveness.
The key success factors assessment method is one of the most useful to assess product competitiveness, as it may be used both in the cases when the product is operating in the destination and when it is not operating and we want to assess the destination’s capability to develop the product successfully.
The key success factors are to be identified by a pool of experts, namely tour-operator product managers and benchmark operators. They are also those who have to determine the relative importance of each key success factor, in order to weigh every factor’s compliance in the final assessment.
Then, once the importance of each factor in the overall assessment is determined, there has to be analysis of the level of compliance of the destination for every factor in a scale of 1-10 and then assess the gap matching capability for all the factors where the assessment is lower than 10. The gap matching capability is to explain how likely the destination is to obtain the maximum assessment in the short-middle term at a reasonable cost. It may be assessed as low, medium or high to simplify the procedure.
Out of the key success factors compliance and gap matching capabilities for every factor, we make an overall assessment for each of the two types, which determine the destination capacity to compete in the business.
In the cases where the product or business is already operating in the destination, there may be use of the method of the competitive position & potential. In this case, we have to calculate the Relative market share of the destination for the product (destination revenues in the business / main competitor revenues in the sector) and the relative market share growth of the destination for this business within a rating range from 0 to 1. Weighing the Relative market share at 70% and the Relative market share growth at 30%, the destination Competitive position is obtained for the business object of assessment.
Then, the Competitive potential results from the assessment of the destination’s Service Quality, its Resources and experiences, its discomforts and insecurities, its costs and its marketing, also rating them from 0 to 1. The weighing of each of these variables is up to the consultant criteria; however, every variable is given a weight to orientate the reader.
The Service quality rating is to consider the overall satisfaction of the tourists with the service quality standards of the destination, though it can also be measured through the consultant’s assessment of the destination’s service quality standards in relation to the international standards. The Service quality suggested weight is at 10%.
The Resources and experiences rating is to consider the value of the destination’s resources related to the product, as well as its capacity to provide satisfactory and memorable experiences to the visitor. This is one of the most important factors and therefore its suggested weight is at 30%.
The Discomforts and insecurities rating is to consider all the inconveniences and risks that the visitor is exposed to during the experience. These may refer to pollution, noise, dirtiness, language barriers, lack of price transparency, transfers length, etc. The suggested weight for the discomforts and insecurities is at 15%.
The Costs rating is to consider both the price that the tourist has to pay for the experience and the negative impact that the tourism activity creates on the destination and its inhabitants. In this point it is necessary to carry out a sounder analysis on the congestion issues affecting locals’ lives, environmental issues, etc. The suggested weight is at 15%.
The Marketing rating is to consider the adequacy of the destination branding for the product, the product & brand awareness in its market, the adequacy of the product packaging, and the efficiency and effectiveness of the marketing system for this product in the destination. The suggested weight for marketing is at 30%.
Out of every rating and weighing, a final assessment is obtained for every factor, and the overall assessment is the result of the factors’ sum for the Competitive position and the Competitive potential. The Whitepaper “The 5 Competitive forces & Business Strategy” explains these two methodologies in a more visual way, and also how these Competitiveness assessments are used within the McKinsey matrix method to design the destinations Business portfolio strategy.
Would you consider other factors in assessing product competitiveness?