The supplementary role of small businesses in the travel and tourism trades.

Author:Leonard, Myron J.
 
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ABSTRACT

This study determines how big retail firms dealing primarily in serving the travel and tourism trades select and utilize small business firms to send their overflow business to, with major emphasis on referrals. In addition, the research examined how small business firms make contact with and maintain their services with big business firms. The researchers felt that the study could provide a basis for expanded efforts on regional, national, and international levels.

INTRODUCTION

"Vulnerability" refers to the degree to which a firm is dependent on other firms, groups, or individuals" (Jacobs, 1974). Although there has been a growing recognition of the "dependence" issue in the management literature, marketing experts have paid little attention to the management of a firm's vulnerability to its markets and customers; i.e., to the development of action plans and structures for reducing a firm's market-related dependencies (Boag & Dastmalchian, 1988). This is surprising, because the success with which a firm manages such dependencies is considered a critical measure of its overall success.

Competitive strategy has been in the forefront of discussion in the business literature since the mid-1970s. Porter (1985) states that competitive advantage is at the heart of any strategy, and achieving it requires a firm to make a choice about the type of competitive advantage it seeks to attain. The partnership is a major competitive strategy used by small businesses to reduce their vulnerability and "failure rate of about 70 percent" (Steiner & Solem, 1988). Partnerships are cooperative, interactive entities that require a good deal of commitment on all sides. One reason for the inadequate performance of partnerships is the failure to understand this fact. A characteristic of a good partnership is that it has the potential to benefit each of the partners; however, the potential benefit may not be the same for each partner. Sometimes a significant amount of education about these benefits or potential benefits is necessary. Large firms should learn to "speak the language" of smaller firms. Since partnership is inherently more complicated than autonomy, a critical factor is that partners be unable to address a problem on their own. They must have a sense that, through interaction with the other partners, a solution may be achieved. Sometimes this interdependence is described as "value added." If there is no value added, it is difficult to sustain partners' interest over time.

A basic reality of modern economic life is the interdependence of all business. No modern business is an entity in itself. It must buy from other firms and sell either to different business owners or to consumers in competition with a great many other businesses. This means there is a place for everyone if he or she has something worthwhile to offer in an effective, efficient way. Furthermore, numerous small enterprises are essential to enable a few large ones to concentrate on those activities where their efforts are more effective (Baumback, 1988).

OBJECTIVES

This study was undertaken to determine how big business firms dealing primarily in the travel and tourism trade select and utilize small business firms to send their overflow business to, with primary emphasis on referrals. In addition, the research examined how small business firms make contact with and maintain their services with big business firms.

RESEARCH PROCEDURE

Twelve interviews were conducted with executives of large and small travel-serving businesses located in Asheville...

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