Innovation typology in tourism
The two main types of innovations introduced by these firms are process and product innovations. First, process innovations are mainly acquired externally and are directed towards the reduction of costs. Next, product innovations may be generated from the interaction with customers. However, product innovations are the result of problem- solving situations rather than formalized processes of innovation. Innovations in supplier dominated firms are new to organizations rather than new to the market.
In situations, in which the majority of firms that operate in a destination are supplier dominated firms, institutions play a major role in maintaining the cohesion of the tourism product. The main reason is that linkages between supplier dominated firms in a destination are low or inexistent. Collaboration is mainly hampered because firms see each other as competitors rather than collaborators. Consequently, organizations in such destinations do not benefit from synergies. As a result, the lack of cohesion influences the fragmentation of the tourism product. Therefore, the labour of institutions plays a major role in creating services at destination level, motivating sustainable development, or enhancing collaboration between actors. At the macro level, concentrations of supplier dominated SME’s can be found in traditional mass tourism destinations. Nevertheless, groups of supplier dominated firms can also be found in other alternative destinations.
Scale Intensive Tourism Organizations
Organizations in the tourism sector that can be defined as scale intensive are large firms that offer standardized products and services. Thus, firms such as hotel chains or leisure parks might be included in this category. These firms habitually have enough resources to invest in innovation. Therefore, they have the capacity to innovate regularly. Furthermore, these large firms diversify their innovation activity. Consequently, they can adapt knowledge from different sources and increment the possibilities to innovate.
Scale intensive firms have a hierarchical and managerial structure. Decisions of managers play a major role in the innovation process. Furthermore, the process of innovation is habitually formalized. Therefore, bottom-up processes are included in development processes.
In this context, scale intensive firms enhance the production of knowledge and competences inside the organization. For instance, these firms employ high qualified personnel, by offering career perspectives. Furthermore, innovation processes are based on the codification of knowledge, which enhances its transferability. Therefore, scale intensive firms have also the capacity to produce and use their own innovations.
These organizations acquire external knowledge embodied in capital goods and services from specialized suppliers. In this matter, several sectors such as IT or KIBS play a major role. Thus, scale intensive suppliers are able to adapt technology and develop it into innovations. This is mainly due to the fact that firms in this category have high levels of absorptive capacity. Nevertheless, since services are standardized, personalization is infrequent and innovations seldom emerge from the interaction between suppliers and tourists.