Building competitive advantage through innovations
An innovation diagnosis of the Prins Bernardhoeve and the Frisian Expo Centre
Niels Dijkstra
Table of contents
Appendix I World Trade Centre, Leeuwarden (WTC) ………p.3
Appendix II Capability analyses PBH and FEC ………p.4
Appendix III MSc BA on Strategy and Innovation ………p.7
Appendix IV World Trade Center ………p.8
Appendix V Research process ……….p.9
Appendix VI Activities of the PBH and FEC according to SBI classification ……p.13
Appendix VII Organization scheme T&E organization ………p.14
Appendix VIII Holder structure of the PBH and the FEC ……….p.15
Appendix IX-1 Five-Forces Model of Competition ……….p.16
Appendix IX Interview scheme ………p.19
Appendix X Other types of innovations ……….p.23
Appendix XI Products of the PBH and FEC ………p.26
Appendix I World Trade Centre, Leeuwarden (WTC)
1The local authority of Leeuwarden received in 1999 a license to build and exploit the World Trade Centre concept. This license is provided because of the successful development of the “European Agri-Nutri Trade Centre” (EATC
2) by the management of the PBH and FEC. The EATC e.g. supports international trade and offers office space to firms in the Agri-Nutri industry. The attention of the exploitation of the WTC will particularly be focused on the existing trade and industry of Groningen, Friesland and Drenthe and new companies in The Netherlands as well as in foreign countries. The WTC will serve, as discussed in appendix IV, as an initiator and facilitator of activities, like seminars, (market) research, export missions, knowledge sharing, etc. in order to support its members.
The WTC Leeuwarden is located at the accommodation of the FEC and is becoming more and more prominent in WTCA because of its active attitude, company support, activities (like trade fairs) and its knowledge platform in the area of Agri-Nutri related issues.
However, until today the WTC Leeuwarden offers only a part of the in appendix I and IV mentioned services.
Services & facilities of WTC’s:
• Trade Information & Market Research – WTC’s provide up-to-date information about their respective regions, including local products and services, market conditions, government regulations and business culture. WTC’s supply detailed profiles of local business contacts, including manufacturers, distributors and services providers. They also perform market research tailored to specific needs.
• WTCA OnLine - The WTCA's internet website (http://www.wtca.org) is a one-stop trade information hub for posting and reviewing trade opportunities, and communicating easily with newly found business prospects. Its strength comes from the combined power of nearly 300 WTC’s producing trade leads and other vital information.
• Trade Shows & Exhibit Space - Supported by highly professional staff and geared to take advantage of the prime location that a WTC provides. WTCs take a leading role in hosting trade-oriented events. This is where the Prins Bernhardhoeve and the Frisian Expo Centre become important.
• Business Services - WTCs offer state of the art support facilities. This includes video conferencing, Internet access, word processing and more. Flexible arrangements for temporary office space, meeting rooms, secretarial services and translation capabilities are also available.
• Trade Education Services - There are also regular speaker programs on timely topics chosen by WTCs. WTCs offer practical international trade courses about key local and global business issues. Interactive discussions about international topics are offered through a series of seminars and workshops.
• Group Trade Missions - Includes taking part in outbound missions to explore new markets and receiving incoming business groups.
• WTC Clubs - Promote business networking by providing comfortable lounge and dining services for members and their guests. Offer private rooms with general office services for various types of business gatherings. Networking forums are arranged on specialized subjects to facilitate business contacts.
1 Abstracted from: concept projectplan WTC Leeuwarden: op weg naar een intergraal handels- en dienstencomplex van (inter) nationale allure, 6 oktober 2003
2 The EATC was a sub-member of the WTCA before the new license was given out
Appendix II Capability analysis PBH and FEC Step 1: Analyzing the strengths with the VRIO-analysis
Distinctive competences (DC) and Sustainable distinctive competences (SDC) are needed for companies to gain above normal profits (section 3.3). These competences are derived from the table below. The resources or competences are compared with primarily the main competitors, the “Martini plaza” and “Evenementenhal Hal Hardenberg”. Note that the distinctive competences derived from section 4.2 are depicted again.
Strength Va lu a b le Ra re Im it ab le Or g ani za ti ona l
DC SDC Access to complementary assets yes yes yes no yes no Communication employees is open and
informal
yes no no no No no
Drive and flexibility of employees
3yes yes yes yes yes yes Entry barriers industry are high yes no yes yes no no
Large parking places yes yes yes yes yes yes
Location FEC in a capital city yes no yes yes no no Knowledge creation through networks yes no yes no no no
PBH on central location yes no yes yes no no
Some small stylistic innovations yes no no no no no Some successes not understood by
competitors yes no yes no no no
Strong reputation as organizer yes yes yes no yes no Strong network of clients yes yes yes no yes no The large size of the halls (only PBH) yes yes yes no yes no The multi-functionality of the halls (only FEC) yes no yes yes no no The small size of the firm yes no yes yes no no
Table 4.8.2 Overview of analyzing the strengths using the VRIO-analysis
From the above analysis five (sustainable) distinctive competences can be derived, namely:
1. Access to complementary assets 2. Drive and flexibility of employees 3. Large parking places
4. Strong reputation as organizer 5. Strong network of clients
6. The large size of the halls (only PBH)
3 Note that three strengths are merged into one.
Step 2: Classification of the weaknesses into three categories
Structural weaknesses indicate the direction in which a resource or competence needs to be developed. It is therefore likely that these indicate areas of desirable development.
Furthermore, hygiene weaknesses are areas wherein the PBH and the FEC has to develop as well.
Weakness Category:
Fragile knowledge-base Hygiene weakness
Internal and external relationships (trust) diminished Hygiene weakness
Halls PBH location unpractical Structural weakness
Management not focused at innovation creation Structural weakness No financial resources available Structural weakness
Reputation has become less strong Hygiene weakness
Structure for innovation creation is missing Structural weakness Consequences of failure or success are unclear Symptom of weakness Crucial tacit knowledge has vanished Symptom of weakness Disturbed communication management and employees Symptom of weakness Employees are focused on processes Symptom of weakness Focus management on creating sales revenue Symptom of weakness Little freedom to implement new ideas Symptom of weakness Management changes task descriptions often Symptom of weakness No climate that encourages openness, creativeness and
thinking beyond the norm Symptom of weakness
No communicated vision, goals and strategy Symptom of weakness No entrepreneurial/ adaptive culture Symptom of weakness No innovations in co-operation with external stakeholders Symptom of weakness No intensive use of ICT applications Symptom of weakness No policy for continuous product development Symptom of weakness No policy has been made to meet the need for experiences Symptom of weakness
No policy to do research Symptom of weakness
No policy to enhance informal value appropriation Symptom of weakness No policy to use knowledge organizations Symptom of weakness No real innovations in the past years Symptom of weakness No reward systems to enhance innovation creation Symptom of weakness No rules and procedures to guide innovation creation Symptom of weakness There is not a policy for formal knowledge sharing Symptom of weakness Value of fairs has been decreased Symptom of weakness
Table 4.8.3 Division of the weaknesses
The PBH and FEC have the following structural and hygiene weaknesses:
1. Fragile knowledge-base
2. Internal and external relationships (trust) diminished 3. Halls PBH location unpractical
4. Management not focused at innovation creation 5. No financial resources available
6. Reputation has become less strong
7. Structure for innovation creation is missing
These weaknesses are resources and competences which have to be developed into
strengths.
Step 3: Classification of the opportunities into two categories
In the table below opportunities are divided into portfolio areas and capability areas (section 3.3). The capability areas indicate potential development areas
Opportunities Area
Emerging 50+ age people Portfolio area
Innovating becomes important to attract customer Capability area
Knowledge suppliers adds value Portfolio area
Large pool of private and public knowledge Portfolio area
Need for experiences during fairs Capability area
Need for personal communication Portfolio area
Shift from national fairs to regional fairs (only FEC) Portfolio area Shift from sales orientation to information orientation goals Portfolio area Substitute products become less powerful Portfolio area Upcoming role of ICT as marketing tool Capability area
Table 4.8.4 Analysis of the opportunities
From the above analysis 3 opportunities arise:
1. Innovating becomes important to attract customer 2. Need for experiences during fairs
3. Upcoming role of ICT as marketing tool
New distinctive competences have to be developed to meet the above opportunities.
Step 4: Further analysis of the threats
The threats in the SWOT-matrix are analyzed in this step. Because every threat is important at itself, no distinction as in the steps before can be made. Therefore the main threats are summarized below.
1. Customer expectations change more rapidly 2. Margins are under pressure
o Local governments supports competition o Internal rivalry has been intensified o High negotiation power capable workforce o High negotiation power of branch organizations o Internet as substitute product
3. No government support
o No government support innovation creation o Weak appropriability regime
o Local governments support competition 4. Shift from national fairs to regional fairs (only PBH)
o Regional fairs become smaller
o Industries relevant to PBH its trade fairs decline
Appendix III M.Sc. BA on Strategy and Innovation
Just a few managers are familiar with the Master of Science Business Administration (MscBA) on strategy and non-technical innovations; therefore a short summary of this very master is given.
In the MscBA Strategy and Innovation, the focus is on the strategic management of non- technical innovation. Non-technical innovation accounts for a large share of the innovative developments in business. However, courses in innovation as well as courses in strategy usually are focussed on technical innovation. This MSc BA on Strategy and Innovation fills this gap by focusing all courses specifically on strategic management of non-technical innovation. The MScBA Strategy and Innovation will prepare the student for strategic challenges of the present-day knowledge-based economy. The industries the MscBA will centre on are the cultural industries (e.g., music, media) and the service industries (e.g., professional services, entertainment).
Mandatory courses
Managing non-technical innovation
In the module “Managing Non-Technical Innovation” a student learns to recognize the diversity of innovation patterns in industries and their dependence on factors, such as market conditions The focus is on how firms in a particular industry manage non- technical innovations, and what explains the diversity between firms within an industry and firms between industries.
Strategy in the knowledge-based experience economy
The module “Strategy in the Knowledge-Based Experience Economy” provides a student with crucial insights in relevant strategic theories and concepts, like the resource-based view, networking, managing hypes and bandwagon effects, selection systems, trend and scenario analysis, and the staging of experiences.
Value appropriation of non-technical innovations
In the module “Appropriability of non-technical innovations”, the focus is on the management of intellectual capital. Lessons will be learnt about the effectiveness of the mechanisms that firms use to protect themselves against imitation.
Innovation and entrepreneurship
In the module “Innovation and Entrepreneurship”, lessons will be learnt about issues
such as venture capital, factors explaining success or failure of new ventures, the
development of intra- and entrepreneurship, and the management of professionals and
processes of change.
Appendix IV World Trade Centers
Because the WTC in Leeuwarden is part of the worldwide network of WTC’s, the concept of a WTC’s is introduced, firstly. Sequentially, the WTC in The Netherlands is discussed.
World Trade Centers Association (WTCA)
4The WTCA is a not-for-profit, non-political association that promote the WTC concept and develops inter-WTC cooperative programs. WTCA membership includes nearly 300 WTC’s in almost 100 countries. Over 750,000 companies are affiliated with WTCA members worldwide.
The purpose of the World Trade Centre is to have information available to businesses in a timely and coordinated manner. Exporting for companies increases because of the immediate accessibility to valuable expertise and energy created by a dynamic market place of (inter)national trade activity.
World Trade Centres are more than a building or an organization; a World Trade Centre brings together business government agencies involved in (inter)national trade, provides essential trade services and stimulates the economy of the region it serves. A WTC puts all the services associated with global commerce under one roof. A WTC address gives a business prime and continuous access and exposure to all the services, organizations and individuals essential for success in world trade or so to say; trade on location. The president, Guy F. Tozzoli, of the WTCA explains the above with: "A World Trade Centre in any city is a business shopping centre, complementing and supporting the existing services of private and government agencies".
Services & Facilities of WTC’s
5A WTC offers its members and residents a wide range of facilities and services. Ever since WTC services are reciprocal, members can access them at all operating WTC’s around the world. The services and facilities that are offered to companies seeking to expand (inter)national markets are listed below and extensively explained in appendix I:
• Trade Information & Market Research;
• WTCA OnLine;
• Trade Shows & Exhibit Space;
• Business Services (office facilities);
• Trade Education Services;
• Group Trade Missions;
• WTC Clubs.
With its unique concept, the WTCA has been a world leader in creating innovative service for (inter)national business.
World Trade Centre, The Netherlands
6Currently, there are 7 organizations with a WTC-license active in The Netherlands, namely Amsterdam, Rotterdam, Eindhoven, Schiphol, Almere, Heerlen and shortly Leeuwarden. Due to their different background, each organization interprets the WTC- concept in a different way. This is expressed in differences in organizational structure, activities and policy. The relation between these organizations is the worldwide (national) network, in which these firms try to reciprocally strengthen each others competences.
4 Abstracted from the official website of the WTCA: http://www.wtca.com
5 Abstracted from the official website of the WTCA: http://www.wtca.com
6 Abstracted from: concept projectplan WTC Leeuwarden: op weg naar een intergraal handels- en dienstencomplex van (inter) nationale allure, 6 oktober 2003, p.5-6
Appendix V Description research process (09-02-2004)
This appendix provides an overview of how this master thesis should be structured, methodologically. The process is given how the researcher - Niels Dijkstra - will come to an answer of the stated research question. This research is carried out to provide information for solving the problems or opportunities set by the management of the PBH and FEC and the outcome should offer information, which will guide the management decisions of the general manager.
Deduction and induction process
Styles of thinking are perspectives of filters for determining how we view and understand reality. They affect what we accept as truth and specify how thoroughly information received has been tested before it can be supported. Scientific inquiry (thinking), which is the case here, is grounded in the deduction process. This process is used for the development and testing of various propositions largely through the double movement of reflective thinking
7.
Reflective thinking consists of sequencing induction and deduction in order to explain inductively a puzzling condition. In turn, the hypothesis (theoretical research questions) is used in a deduction of further facts that can be sought to confirm or deny the truth of the hypothesis
8. So, in case of this master thesis induction is used to answer questions from the reality (problems or opportunities set by the management of the PBH, FEC and WTC case) by means of the theory. In turn, deduction is used to answer questions rising from the theory, like definitions of innovation patterns. This process leads successively to following phases of the master thesis
9.
Chapter I Introduction
(1) Defining the management dilemma
According to Cooper and Schindler, a useful way to approach the research process is to define the basic management dilemma that generates the general research question. So, first the management dilemma must be defined and based on that, the research question can be formulated. This management dilemma is a symptom rather than a problem or opportunity of the actual problem where the PBH, FEC and WTC is dealing with. In this phase symptoms are gathered and defined by means of orienting interviews or secondary data, like news papers or previous research.
(2) Defining the research (sub-) question
Based on the defined management dilemma or corrected symptoms, the research question can be defined. The purpose of doing so is to clarify the possible management actions that might be taken to solve the management dilemma. Once a research question has been formulated, other (sub-) research questions can be created by breaking down
7 Cooper and Schindler, Business research methods, 2003
8 Leeuw, Prof. Dr. Ir., A.C.J., Bedrijfskundige methodologie, 2001
9 Cooper and Schindler, Business research methods, 2003
Theory
Reality Deduction,
testing Induction,
Conformation
Figure V.2 deduction and induction process
Concept
Concept Concept
Figure V.2 Construct
the original question into more specific ones. This phase involves interviews with information gatekeepers and brainstorming with experts, like the involved professor and the general manager of the PBH, FEC and WTC.
(3) Construction of definitions
In this phase definitions must be given of the topics concerned, in order to communicate with the reader - the general manager and professor involved - on the same wavelength.
Definitions are one way to reduce this danger. Definitions for this master thesis will be found in the scientific literature. Sometimes more than one definition of a topic can be given, but in that case the author will choose, supported with arguments, for one definition, which will be used throughout this master thesis. Nonetheless, definitions may be adequate for general communication but not for research. In this master thesis concepts and constructs must be measured, and this requires more rigorous definitions.
Chapter II Theoretical background (4) Theory: concepts and constructs
When doing research, the question what is important to understand, explain, and predict phenomena. The question e.g. what organizational structure is most effective in a firm which organises trade fairs in a dynamic environment can be explained by concepts, constructs, and rigorous definitions. In this phase these components, or building blocks, are exclusively provided by scientific theory.
A concept is a generally accepted collection of meanings or characteristics associated with certain event, objects, situations, or behaviours. Classifying and categorizing objects or events that have common characteristics beyond any single observation create concepts. These concepts are abstracted from the (sub-) research
questions which where formulated in the previous chapter. The concepts described represent several levels of abstraction, that is;
the degree to which consensus is made about a concept. A car is a clear concept, because there is no discussion that is has 4 wheels, a motor and a steering wheel. However, concepts like personality are more difficult to agree on and much more difficult to visualize. Such abstract concepts are often called constructs.
A construct is an image or idea specifically invented for a given research and/or theory building purpose. Constructs are built upon the more simple concepts used, which are often interrelated. When these concepts and constructs are supportively related, a conceptual scheme is made.
In this master thesis the concepts and constructs are used to
present a theoretical solution (framework) for the management dilemma or a theoretical answer to the stated research question. For example, the previous mentioned question - what organizational structure is most effective in a firm which organises trade fairs in a dynamic environment - can be answered with, what kind of organizational structures are present in the literature, what is according to the theory effective in such an environment, etc. So, after formulating concepts and construct and discussing them, a theoretical solution can be given in order to solve the management dilemma. As soon as a theoretical solution is prepared, questions about the reality of the PBH, FEC and WTC rise.
In this phase scientific literature is studied to understand, explain, discuss, and formulate concepts and constructs.
(5) Theoretical research questions
In this phase the management dilemma, the research question and a (or some)
theoretical solution are given. Hence, theoretical questions can be asked about the
current situation of the PBH, FEC and WTC, like to what extend does concept A occur
within these companies? This phase involves brainstorming, based on the developed
theory, with experts, like the involved professor and the general manager of the PBH, FEC and WTC.
Chapter III Results
(6) Empirical testing of the theoretical research questions
Because companies are involved, this phase provides an industry analyses to set the environmental situation. Therefore a Porter and PEST analysis will be executed.
Sequentially, the previous mentioned theoretical questions will be answered using data from these companies. In fact, the same process of concepts and constructs, which are used in the previous chapter, is used to investigate the current situation at the PBH, FEC and WTC: the theoretical outcome will be a checklist to analyse these firms or management dilemma. These analyses (industry and firm analyses) will result a SWOT matrix, which in turn provides a confrontation matrix. The confrontation matrix will be starting point of the next chapter, where the discrepancy between the theoretical solution of the management dilemma and the current situation at the PBH, FEC and WTC is discussed.
In this phase there are various methods of collecting information. Methods that will be used for this master thesis are described below. First, there are several ways to find data about the PBH, FEC and WTC and its industries. Some sources are specific to these firms;
others provide more general information, like the environment of the firm. Examples of such sources are the “CBS” and research conducted by the respective firms. Second, interviews will be conducted. Interviews are used to get more insight in the companies and its activities. The type of questions will be open formulated, which can result in a lot of information. The interviews will be semi- structured, which means that topics and questions are fixed to certain degree in order to anticipate on new information or the behaviour of the respondent
10.
Chapter IV Discussion and recommendations (7) Discussion and conclusions
In this phase a match is made between the developed theory and the current situation of the PBH, FEC and WTC. This makes sense because the ability to make rational decisions, as well as to develop scientific knowledge, is measured by the degree to which one can combine facts and theories. This discussion involves the discrepancies between what is set by the theory as desirable and the situation as it is at these firms. These discrepancies are points of improvement and input for further strategy development.
This phase involves brainstorming, based on the developed theory and the outcome of phase 6, with the earlier mentioned experts.
(8) Recommendations
Finally, recommendations can be drawn. Based on the outcome of the previous phase, possible solutions of how to deal with the discrepancies can be given and this, in turn, results into an answer of the stated research question. This will be the end of the master thesis.
10 Baarda, dr. D.B. en dr. M.P.M. de Goede, Methoden en technieken, 1997
Time schedule: deadlines
In the underneath figure the research process of this master thesis is illustrated.
Furthermore, deadlines are given for concept as well as final chapters. A chapter is considered finished as soon as the professor agreed upon the quality of this part of the master thesis.
There are two reasons why the first part of this master thesis takes more than averaged time. First, until the 15
thof April another course (10 ECT’s) at the university has to be attended. Therefore, 2/3 of the time will be used for the course and 1/3 of the time will be used for this master thesis. Second, in my opinion, the first part of writing this master thesis is time consuming due to fact that a lot of library research has to be done.
Furthermore, defining the management dilemma means that you need to have a lot of knowledge of the companies concerned. This is time consuming as well. From the 18
thof April until the 1
stof July, 40 hours can be used weekly on doing this master thesis.
Defining Management Dilemma Defining research questions
Construction of definitions
Industry analyses Reality: concepts & constructs
Confrontation matrix
Discussion Conclusions Recommendations Theory: concepts & constructs Theoretical research questions
Figure V.3 Research process and time schedule
15th of March: concept 1st of April: final
Deadlines
30th of April: concept 7th of May: final
1st of June: concept 7th of June: final
14th of June: concept 21st of June: final
1st of July:
Final Master Thesis
Appendix VI activities of the PBH and FEC according to SBI classification
The PBH and FEC are classified as a provider of business services (SBI code: ZD 7487.2).
In the underneath enumeration all the activities of the PBH and FEC according to the CBS website (www.cbs.nl) are provided. This is the so called SBI classification.
• Beheer van markthallen
• Beheer van marktplaatsen
• Beurzen (organiseren van; handels-, vak-, jaar-, ruilbeurzen e.d.)
• Braderieën (organiseren van)
• Exploitatie van tentoonstellingsgebouwen (al dan niet het organiseren van tentoonstellingen)
• Handelsbeurzen (organiseren van)
• Jaarbeurzen (organiseren van)
• Markten (organiseren van; antiek-, auto-, occasion-, vlooien-, zwarte-)
• Markthallenexploitatie (not subject of this Master Thesis)
• Modeshows, organiseren van (not subject of this Master Thesis)
• Organiseren van beurzen, tentoonstellingen
• Organiseren van markten en braderieën
• Organiseren van modeshows (not subject of this Master Thesis)
• Ruilbeurzen (organiseren van)
• Tentoonstellingen (organiseren van)
• Vakbeurzen (organiseren van)
• Weekmarkten (organiseren van)
Appendix VII Organization scheme T&E organization
Counsel of commissionaires
Board of directors
HRM, Finance & organization Corporate communications
Exploitation of accommodations Trade Fair and Exhibition management
Marketing
Secretariat
Business development
Unit management
Team I Team II Team III
Source: organizational structure Ahoy, Actueel No. 1, 2001 (abstracted from SBM)
• Project manager
• Project assistant
• Sales accountant
• Communication manager
• Administrator
• Other
Appendix VIII Holder structure of the PBH and the FEC
The Prins Bernardhoeve is owner of the World Trade Centre Leeuwarden and is shareholder of the Frisian Expo Centre. The local government Leeuwarden privatized the Frisian Expo Centre, however, it still has 75% of the shares. The Prins Bernardhoeve can be marked as a foundation (stichting), legally.
Although the local government Leeuwarden is main shareholder, the Prins Bernardhoeve is the actual supervisor of the Frisian Expo Centre. In the figure below the holder structure of the Prins Bernardhoeve and the Frisian Expo Centre are illustrated.
Prins Bernardhoeve
(corporation)
Frisian Expo Centre WTC Leeuwarden
100% shareholder 2525% shareholder
Local Government Leeuwarden
75% shareholder
Figure VIII.1 holder structure of the PBH and the FEC (source: PBH)
Figure IX-1.1 (source: Porter 1979)
Appendix IX-1 (template) Five-Forces Model of Competition
Template for doing the Five-Force analysis (copied directly from Besanko (2000)) Factors affecting Rivalry among existing
competitors
To what extent does the pricing rivalry or non-price competition (e.g. advertisements) erode the
profitability of a typical firm in this industry?
Characterization
(Current) Future trend
Degree of seller concentration?
Rate of industry growth?
Significant cost differences among firms?
Excess capacity?
Cost structure of firms: sensitivity of costs to capacity utilization?
Degree of product differentiation among sellers? Brand loyalty to existing sellers? Cross-price elasticity’s of demand among competitors in industry?
Buyers' costs of switching from one competitor to another?
Are prices and terms of sales transactions observable?
Can firms adjust prices quickly?
Large and/or infrequent sales orders?
Use of "facilitating practices" (price leadership, advance announcement of price changes)?
History of "cooperative" pricing?
Strength of exit harriers?
Factors affecting the threat of entry
To what extent does the threat or incidence of entry work to erode the profitability of a typical firm in this industry?
Characterization
(Current) Future trend
Significant economies of scale?
Importance of reputation or established brand loyalties in purchase decision?
Entrants' access to distribution channels?
Entrants' access to raw materials?
Entrants' access to technology/know-how? Entrants' access to favourable locations?
Experience-based advantages of incumbents?
"Network externalities"; demand-side advantages to incumbents from large installed base?
Government protection of incumbents?
Perceptions of entrants about expected retaliation of incumbents/reputations of incumbents for "toughness"?
Factors affecting or reflecting pressure from substitute products and support from
complements
To what extent does competition from substitute products outside the industry erode the profitability of a typical firm in the industry?
Characterization
(Current) Future trend
Availability of close substitutes?
Price-value characteristics of substitutes?
Price elasticity of industry demand?
Availability of close complements
Price-value characteristics of complements?
Factors affecting or reflecting the power of input suppliers
To what extent do individual suppliers have the ability to negotiate high input prices with typical firms in this industry? To what extent do input prices deviate from those that would prevail in a perfectly competitive input market in which input suppliers act as price takers?
Characterization
(Current) Future trend
Is supplier industry more concentrated than industry it sells to?
Do firms in industry purchase relatively small volumes relative to other customers of supplier? Is typical firm's purchase volume small relative to sales of typical supplier?
Few substitutes for suppliers' input?
Do firms in industry make relationship-specific investments to support transactions with specific suppliers?
Do suppliers pose credible threat of forward integration into the product market?
Are suppliers able to price discriminate among
prospective customers according to ability/willingness to pay for input?
Factors affecting or reflecting the power of buyers
To what extent do individual suppliers have the ability to negotiate low purchase prices with typical firms in this industry? To what extent do purchase prices differ from those that would prevail in a market with a large number of fragmented buyers in which buyers act as price takers?
Characterization
(Current) Future trend
Is buyers' industry more concentrated than industry it
purchases from?
Do buyers purchase in large volumes? Does a buyer's purchase volume represent large fraction of typical seller's sales revenue?
Can buyers find substitutes for industry's product?
Do firms in industry make relationship specific investments to support transactions with specific buyers?
Is price elasticity of demand of buyer's product high or low?
Do buyers pose credible threat of backward integration?
Does product represent significant fraction of cost in buyer's business?
Are prices in the market negotiated between buyers and sellers on each individual transaction or do sellers
"post" a "take-it-or-leave it price" that applies to all
transactions?
Appendix IX (template) Interview scheme
Geachte respondent,
In het kader van mijn afstudeerproject aan de Rijksuniversiteit Groningen, heb ik in samenwerking met Dhr. A.A. de Jong, een onderzoek opgezet om inzicht te verschaffen in hoe de Prins Bernhardhoeve en het Frisian Expo Centre een duurzaam concurrentievoordeel kunnen opbouwen d.m.v. het creëren van innovaties. Dit laatste betekent zoveel als het in staat zijn om steeds weer nieuwe beurzen en tentoonstellingen of onderliggende processen te ontwikkelen om daarmee uiteindelijk de concurrentie een stap voor te blijven.
Met uw medewerking draagt u een stukje bij aan de wetenschap en uiteindelijk aan het verder ontwikkelen van uw bedrijf op het gebied van processen en diensten.
Voor ons gesprek heb ik het interviewschema bijgevoegd, zodat u een idee heeft waar het interview over gaat. Heeft u eventuele vragen, dan kunt u mij mailen of bellen op 0651744014.
Bij voorbaat dank voor uw medewerking en ik kijk uit naar informatief gesprek op woensdag, 19 mei aanstaande.
Met vriendelijke groet, Niels Dijkstra
Interviewschema
In dit interview ga ik er vanuit dat de PBH en het FEC één organisatie zijn. Echter zijn er verschillen tussen de bedrijven op het gebied van locatie en doelgroep, dus wanneer u kans ziet om per bedrijf antwoord op de vraag te geven dan is dat geen probleem.
Verder lijken niet alle vragen direct relevant voor uw functie te zijn, maar om onderwerpen vanuit meerdere perspectieven te kunnen bekijken, wil ik u toch deze vragen stellen. Daarnaast garandeer ik u dat in mijn rapportage uw naam niet wordt gekoppeld aan de door uw gegeven antwoorden. Hierdoor blijft u in zekere zin anoniem.
Tot slot wil ik u erop wijzen dat dit een diepte-interview is, waardoor het inderdaad klopt dat er veel vragen worden gesteld. Dit is noodzakelijk om een goed beeld van uw organisatie te krijgen.
Vraag 1 Waardecreatie Vraag 1a
Wat zijn de concurrentievoordelen van de PBH en het FEC, oftewel waar zijn jullie beter in dan de concurrentie? Concurrentievoordelen worden ook wel Unique Selling Points genoemd.
Vraag 1b
Welke projecten zijn in de afgelopen 3 jaar succesvol gebleken en waar blijkt dat uit?
Bijvoorbeeld boven normale winst, stijgende bezoekersaantallen, etc.
Vraag 1c
Waar in uw bedrijf wordt het meeste waarde gecreëerd en waarom? Bijvoorbeeld marketing, organisatie van evenementen, management, etc.
Vraag 1d
Op basis van welke aspecten (kenmerken) bepalen bezoekers en standhouders dat het
de moeite waard is om naar de PBH en het FEC te gaan en waar blijkt dat uit?
Vraag 2 Innovatie
Innovatie betekent, met betrekking tot dit onderzoek, “iets nieuws in de branch wat meestal niet technisch is en wat gewaardeerd wordt door de bezoekers en standhouders”.
Vraag 2a
Kunt u een aantal innovaties noemen die de PBH en het FEC in de afgelopen 3 jaar hebben ontwikkeld?
Vraag 2b
Wat heeft de bezoeker en standhouder van deze innovaties gemerkt? Immers van innovaties achter de schermen merkt een klant niets.
Vraag 2c
Om wat voor soort innovatie ging het? Bijvoorbeeld innovaties in producten (nieuwe beurzen), processen (nieuwe systemen), nieuwe manieren van samenwerken of nieuwe manieren om de klant te bereiken, etcetera.
Vraag 2d
Op welk moment besluiten jullie om te gaan innoveren? Bijvoorbeeld wanneer veranderingen in de markt optreden, wanneer leveranciers met ideëen komen of wanneer jullie zelf denken dat iets beter kan.
Vraag 3 Factoren die het creëren van innovaties beïnvloeden Vraag 3a
In hoeverre hebben u en uw collega’s kennis van de markt waardoor u “gemakkelijk”
veranderingen constateert? Een verandering in de markt kan bijvoorbeeld zijn dat doelstellingen van standhouders steeds meer gericht zijn op informeren en communiceren in plaats van verkopen. Dat zou u niet kunnen zien als u net van de basisschool kwam (opleiding, trainingsniveau).
Vraag 3b
Als u of uw collega’s dergelijke veranderingen zien, in hoeverre wordt er daarop dan ingespeeld? Kunt u voorbeelden noemen.
Vraag 3c
Heeft de PBH of het FEC mensen die de “kar trekken” of veel steun geven wanneer innovaties worden bedacht en uitgevoerd? Kunt u namen geven (waaronder uzelf)?
Vraag 3d
Wanneer jullie nieuwe ideëen hebben die kunnen leiden tot innovaties (b.v. nieuwe beurzen), gebruiken jullie dan vooraf opgestelde regels en procedures waarbinnen jullie moeten werken? Zo ja, waar bestaan die dan uit?
Vraag 3e
Hebben jullie, op papier, een functieomschrijving, zodat u weet wat er van u verwacht wordt?
Vraag 3f
Heeft de PBH en het FEC het beleid om mensen regelmatig (b.v. elke 3 jaar) binnen de organisatie van functie te laten veranderen?
Vraag 3g
Werken jullie in zognaamde multi-functionele teams waarin ieder een andere achtergrond
of functie heeft, zoals marketing, financiën, P&O, etc.? Kunt u daar voorbeelden van
geven?
Vraag 3h
Komen jullie als teams of als individu periodiek bijeen om elkaars kennis en ervaring uit te wisselen? Bijvoorbeeld door samen te brainstormen over nieuwe ideëen, door te voeren veranderingen e.d. Zo ja, hoe wordt dit vastgelegd? Bijvoorbeeld in notulen, databases, etc.
Vraag 3i
Maken jullie ook gebruik van beloningssystemen? Bijvoorbeeld werken op provisie of een eindejaarsuitkering wanneer de PBH en het FEC het goed hebben gedaan? Zo ja, waar worden jullie op beoordeeld?
Vraag 3j
Een organisatie heeft middelen nodig om te kunnen innoveren. In hoeverre en wanneer is geld beschikbaar? Maken jullie gebruik van jullie reputatie om bezoekers en standhouders te werven? Kunnen jullie gebruik maken van technologische middelen, zoals ICT.
Vraag 3k
Werken de PBH en het FEC samen met klanten, leveranciers, concurrenten of branchorganisaties om innovaties (b.v. nieuwe beurzen, nieuwe systemen) tot stand te brengen? Kunt u vertellen hoe dat in zijn werking gaat?
Vraag 3l
In hoeverre hebben de PBH en het FEC een cultuur die het normaal acht om flexibel met de klant om te gaan en waar het vanzelfsprekend is dat de medewerkers hun blik op de omgeving (klanten, concurrenten) richten i.p.v. op de organisatie (processen, regels)?
Vraag 3m
In hoeverre heeft uw manager (of het management) de tijd om naar u te luisteren, ideëen te delen en u te ondersteunen wanneer u een eigen, nieuw idee uitvoert?
Vraag 3n
Op welke momenten heeft u contact met uw collega’s en/of managers over het werk e.d.? Bijvoorbeeld tijdens vergaderingen, op de gang, etc.
Vraag 3o
Wat is de visie van de PBH and het FEC en wat zijn de doelstellingen? En is iedereen binnen de organisatie ook op de hoogte van deze visie en doelstellingen? Dit kunnen visies en doelstellingen op directieniveau zijn, maar ook op projectniveau.
Vraag 3p
Zijn de innovaties van de PBH en het FEC gecreëerd op basis van de gestelde visie en doelstellingen?
Vraag 3q
Maken jullie gebruik van kennis van de hogescholen & universiteiten en/of consultants om efficiënter en effectiever als organisatie te zijn?
Vraag 4 Het behouden van de gecreërde waarde Vraag 4a
Maken jullie gebruik van trademarks om jullie merken te beschermen en/of van copyrights om jullie nieuwe beursconcepten te beschermen tegen imitatie?
Vraag 4b
Kunt u een aantal voorbeelden noemen van successen waarvan u (of uw collega’s)
achteraf niet kunt uitleggen waarom het een succes was? Of andersom, waarom het juist
geen succes was.
Vraag 4c
Kunt voorbeelden noemen van zakelijke relaties (inclusief collega’s) waarvan u weet dat deze gebaseerd zijn op vertrouwen?
Vraag 4d
Welke “radicale” veranderingen hebben de PBH en het FEC de laatste 10 jaar doorgemaakt? Kunt u de belangrijkste 3 noemen.
Vraag 4e
Hebben de PBH en het FEC het beleid om continue met nieuwe of gemoderniseerde beurzen en/of tentoonstellingen op de markt te komen met als doel om de concurrentie een stap voor te blijven?
Vraag 4f
Welke middelen gebruiken de PBH en het FEC om een nieuwe beurs of tentoonstelling op de markt te brengen? U kunt hierbij denken aan bepaalde marketing technieken, gebruik maken van de reputatie, gebruik maken van bestaande netwerken, etc.
Vraag 5
Tot slot, als u directeur zou zijn van de PBH en het FEC, wat zou u als eerste veranderen?
Einde interview
Bedankt voor uw medewerking.
Figure X.1 Linkages between the four dimensions of service innovation. (Source: Den Hertog)
Appendix X Other types of innovations Mapping Service Innovation
According to Den Hertog (2000) service innovation is rarely limited to a change in the characteristics of the service product itself. In fact, most innovations appear to be a mixture of major and minor changes and adaptations of existing services. In order to discuss, map and analyse the diversity of innovations in greater detail he introduces a four-dimensional model of service innovation. Though conceptual, it is concrete enough to map service innovation. The four dimensions or so to say types are presented below, followed by the linkages between them.
• New service concept. Mostly, intangible characteristics, such as new ideas of how to organise a solution to a problem. An example is a new concept of exhibitions, combining different themes and functions (e.g. not only informing but advising as well).
• New client interfaces. Design of the interface between the service provider and its clients. A clear example is the use of various (web) tools, like a lead calculator programme: fair participants can determine in advance on the website the number of visitors they would like to visit their stands and how many follow-up appointments this should lead to. This objective is related to the size of the stand and of course their marketing efforts
11.
• New service delivery system or organization. This dimension is often directly linked to the previous dimension. It refers to the internal organizational arrangements that have to be managed to allow employees to perform their job properly, and develop and offer innovative services. These are more organizational innovations (forms, capabilities, skills). Examples are e-commerce in business processes or lengthening of opening hours.
• Technological options. Although not always necessary for services innovations, technology can act as facilitator. Clear examples are the technological aspects of internet, computers, Customer Relation Management systems, etc.
The previous dimensions never take place singularly, but always in a combination of at least two dimensions. A service innovation may articulate one central aspect, however, this feature will always affect characteristics of other dimensions. That is inevitable. The
11 http://sites.vnuexhibitions.com/sites/vnuexhibitions/en/page.asp?nav_id=3912
possible linkages between the dimensions are illustrated in figure 2.4.3.2.1 (Den Hertog:
2000).
Organizational innovation
Organisational innovations are innovations that influence the strategies of an organisation or the structure of a firm (Hannan and Freeman: 1984, Debdulal Dutta:
2003). Besides, organizational innovations can in fact be considered as process innovations ever since it changes characteristics of the creation process of the service and not the service itself (Clark: 2003).
Innovation in Culture, creating fertile grounds
Kuczmarski (1996) uses another perspective on innovations. He defines an innovation as a mindset of firms. In his opinion “an innovation is best described as a pervasive attitude that allows business to see beyond the present and create a future vision”. Kuczmarski states this, because it is one thing to talk about innovations, but another thing to stake your resources (or career) on it. For organizations that can change their business mindset, however, and become really innovators, the rewards can be remarkable.
So, innovation creation must be in the DNA or culture of the organization. Culture can be described as “the collective programming of the mind which distinguishes the members of a human group from another and it includes systems of values” (Hofstede 1980). This means that innovative behaviour must be “programmed” into the mind of the members of an organization. All together, creating an innovative culture (mindset) can be predetermined as innovating to be able to innovate as a firm, and thereby, creating fertile grounds (Prahalad: 2004).
Innovation in Marketing
In addition to innovations in services and processes, there are innovations in the marketing of services as well. The development of new marketing tools and methods plays an important role in the evolution of industries (Chen: 2003). In recent years, for instance, new ways of gathering consumer information through computer software and world wide networks (CRM, internet) have enabled T&E organizations to reach exhibitors and visitors more effectively. Furthermore, objectives of exhibitors of Trade Fairs have changed recently from sales- into information- and communications objectives when attending Trade Fairs. Above all, organizations accommodate Trade Fairs to marketing communications budgets these days in stead of sales budget (ECMB: 2001), which means that the focus of innovations in marketing have to change (different target groups).
Finally, despite its obvious importance, and unlike product or process innovation, marketing innovation has received little attention in the literature (Chen: 2003).
Co-innovation in networks
Ever since Trade Fairs and Exhibitions are highly complex services, assembled by means of a network of companies (Go: 1999), like exhibitors, visitors and other suppliers, innovations in networks are of significant importance (Bossink: 2002). Innovating in networks in this sense means co-operation between companies to create innovations.
The capability of organizations to co-innovate with other organizations can be of crucial importance in sustaining and strengthening competitive markets (Bossink: 2002). Co- innovations in new products and processes occur by sharing complementary resources, knowledge and competences. More specifically, co-innovation within T&E organizations is frequently creating new concepts based on knowledge and resource sharing between a T&E organization and exhibitors (branch organizations or representative companies)
12. Experience innovation
Customer demand is shifting from a service-orientation towards an experience- orientation. Pine and Gilmore (1998) state that leading edge companies, whether they sell to customers or businesses, will find that the next competitive battleground lies in
12 Personal communication with an anonymous respondent
staging experiences. These experiences are essentially personal in nature, existing only in the mind of the individual who has been engaged on an emotional, physical, intellectual or even spiritual level (Pine and Gilmore: 1998). Hence, creating and exploiting memorable experiences through innovations is the main challenge for T&E organizations to create value and thereby sustainable competitive advantage. A clear example of experience innovation is the millionaires fair, where informing and buying was obviously not the main objective of most visitors, but the experience of feeling or acting as a millionaire for just one day. The question here is not whether to innovate but when and how in order to enter the emerging experience economy. According to Pine and Gilmore (1998) experiences occur when a company uses services as a stage, goods as a prop, to engage individual customers in a way that creates a personal, memorable event.
Furthermore, they propose a framework of how to design such memorable experiences, that is:
• Theme the experience. Creating and envisioning a well-defined theme, like Hard Rock Café or the Millionaires fair. The theme must drive all the design elements and staged events of experiences towards one unified story line that totally fascinates the exhibitor or visitor.
• Harmonise impressions with positive signals (cues). While the theme forms the foundation, the experience must be provided with permanent impressions.
Impressions are the takeaways of the experience; they fulfil the theme. To create the desired impressions, T&E organizations must introduce cues that affirm the nature of the experience to the visitor or exhibitor.
• Eliminate negative signals (cues). Each cue must support the theme, and none should be inconsistent with it. Probably the easiest way to turn a service into an experience is to provide poor service, thus creating a memorable event of the unpleasant kind. In turn, “over servicing” can also ruin the experience.
• Mix in memorabilia. Postcards, t-shirts or capes are physical reminders of visitor’s memorable experience. These goods generally sell at price points far above those commanded by similar items that don not represent an experience. If service businesses find no demand for such memorabilia, it is probably because the visitors or exhibitors did not engage to an experience.
• Engage all five senses. The sensory stimulants that accompany an experience should support and enhance its theme. The more senses an experience engages the more effective and memorable it can be. An example is the reek generators, which produces the smell of bread, Albert Hein uses.
Although the above framework is promising, Pine and Gilmore do not guarantee success
because no one has repealed the laws of supply and demand.
Appendix XI products of the PBH and FEC Trade Fairs and Exhibition at the PBH
Name of Trade Fair or Exhibition
Subject of Trade Fair or Exhibition Number of
exhibitors (+/-)
Number of visitors (+/-) Exhibition. Information platform for
consumers in the Northern part of the Netherlands who like to know more about constructing, living, gardens, etc.
(Duration: 5 days)
100 5.000
(below expectation) Trade Fair. Largest Trade Fair in the
Northern part of the Netherlands focussed at the construction industry. Constructors, manufacturers, and other supplier present their products and the latest innovations in their field. (Duration: 5 days)
180 31.521 (last year:
48.000)
Exhibition. Largest caravan- and holiday fair in the Northern part of the
Netherlands. Especially caravans and camp facilities were shown. (Duration: 7 days)
164 48.082 (last year:
56.000) Trade Fair. Information and trade platform
for the hotel, restaurant, café and catering industry (Horeca). (Duration: 4 days)
176 15.118 (last year:
28.000)
13Trade Fair. International fair focussed at
the agriculture industry. It is the largest one in the Netherlands (Duration: 5 days)
250 52.365 (last year:
51.000) Exhibition. Regional fair focussed at
information proving and advice for in particular living interior (Duration: 5 days)
105 13.023 (last year:
not known) Exhibition. Regional fair focussed at the
increasing group of 50+ year old people.
The centre of attention is the spare-time of the group. (Duration: 3 days).
85 6.535 (expected:
10.000)
Trade Fairs and Exhibition at the FEC Name of
Trade Fair or Exhibition
Subject of Trade Fair or Exhibition Number of
exhibitors (+/-)
Number of visitors (+/-) Exhibition. Regional fair focused at water
sports (boats) and the water sport holidays.
(Duration: 6 days)
340 52.906 (last
year:
46.000)
13 This is not comparable, because beer-suppliers were not included last year. Beer-supplier have a significant influence on the number of visitors)
