An Investigation on Two Strategic Alliances in the Business and Convention Industry: BCGA and FCCI

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Introduction

Emerging in all sectors of industry these days- from Free Trade Agreements (FTAs) to global summits- alliances are being used as a means, and a model, for coping with global integration. The benefits of alliance orientation lie in "outperforming its rivals" and "yield(ing) superior market performance in its marketing efforts" (Kandemir et al., 2006: 326). Alliances in the tourism industry are paramount for the industry's survival, but little research has been done on the dynamic process of collaborative marketing at the destination level (Fyall & Garrod, 2004; Saxena, 2005; Wang, 2008), and even less at the collaborative level of Convention Visitor Bureaus (CVBs), or the Meetings, Incentives, Conventions and Exhibitions (MICE) industry, as more popularized in Asia.

This is a highly overlooked area of research when figures tell us that the Meetings Industry's direct contributions to the U.S. economy had the economic impact of 263 billion dollars in spending; 1.7 billion in U.S. jobs; 106 billion dollars in contribution to GDP; 14.3 billion dollars in federal tax revenue; and 60 billion dollars in U.S. labor income. These figures three fold when one considers the multiplier effect of indirect spending (CIC: 2011). Though data is unavailable for impact in Asia of the Meetings Industry, one could assume similar results.

Convention industry alliances at the governmental level exist both at the regional and city levels, through such organizations as AACVB (Asian Association of Convention and Visitor Bureaus) and Best Cities Global Alliance, respectfully. Though AACVB initially formed in 1983 to create a regional cooperation alliance for Asia's convention industry, it was dormant for a ten year period and only recently came active again in 2008. This may be because alliances at the national level are harder to maintain than at the regional level. Earlier this year Seoul city hosted the signing of a formal agreement for a new city alliance, Future Convention Cities Initiative (FCCI) (Lee, 2011).

At the onset of a new alliance, issue crystallization, coalition building and purpose formulation are three processes that are identified as significant at the start of a partnership (Waddock, 1989). One of the problems with alliance research identified by Wang and Xiang (2007) is that it is often difficult to identify the features of the relationship because it is difficult to differentiate the boundaries. This research therefore takes up Wang and Xiang's challenge and concentrates on how two alliances- BCGA and FCCI- conceive their benefits of being in their alliance, to articulate these boundaries. It is important that at the onset of a new alliance, alliance members are "on the same page" and understand what is the purpose or aim of their alliance. Wang and Xiang (2007) identify these initial stages of an alliance as the 'assembling' and 'ordering' stages.

For investigating this, a survey was administered to all the members, who were city representatives, of the newly established FCCI alliance as well as to all members of the Best Cities Global Alliance, the first and oldest city alliance, for identifying how the purpose and aims of their members compared to those stated in their charter or promotional literature. Wang and Xiang's (2007) proposed Framework for Destination Marketing Alliance Formation is used to help guide this research. Research findings will help to clarify if their members are seeing eye-to-eye on the goal/ purpose of being in their alliance.

Literature Review

Strategic Alliance

In the increasingly competitive market of vying for strategic positioning, alliance formation is a natural byproduct, especially in the field of tourism, which is constantly in flux. Being able to have some support and predictability will help give an edge in the competition. Tourism destinations competitiveness can be seen on the regional, national and international levels (Presenza et al. …