Nico Kerssensin luento Turun amk:ssa 16.4.2012 Olsen’s model

To remain successful one must be aware of the events (congresses, tournament etc.) that happen in the environment now and in the future. What will happen is the main question in order to remain competitive.

Olsen model:
Predict future events
Because they dictate future products (competitive methods)
Choose to invest in right products in right time
This is hard to do!

There are 5 levels of environment: remote, task, industry, firm and functional.

Remote:
Predicting the future (revenue management)
DESTEP (demographical, economical, social culture, technological, ecological & political)
o Technological e.g. long playing record -> compact disk -> mp3
Change has become more dynamic, faster and more drastic

Remote – finance:
Kondratieff cycle (long cycle, 30-70 years), caused by major events in history
o 1780 industrial revolution
o 1850 railways
o 1900 electricity
o 1950 electronic devices and cars
o 1990 information technology
o What will be the next major event in 2020?

Juglar cycles 7-11 years
o “Pigs cycle” or “business cycle”
o Good selling prices attract farmers to breed pigs -> more capacity -> more and more capacity -> overcapacity -> low prices -> financial collapses -> less capacity -> normal selling prices
o This is to be repeated every time

-> Flexibility is needed in order to adjust to economic reality

Remote – economic power
World is changing
History shows the rise and fall of many cultures (Ancient Greeks & Romans)
Economic power went from old world to USA

Euro to dollar predictions
Goldman Sachs predicts 1,14 dollar/euro
While others predicts 1,80 dollar/euro
From America perspective: a 200€ Amsterdam room costs: 228 or 360!

Sustainability
Major problems:
o we are running out of fossil fuels, we have climate change, greenhouse effect, nuclear disasters, the world population grows and most of them wants a car, running out of daily food, lack of water, empty seas…

Opportunities:
o Green key (hotel industry certification)
o Save energy and money
o Create a competitive advantage
o Practice what you preach!
o In the future the only way of working is sustainable way

Sustainability and economy
Economy is about scarcity (make products more expensive) for example water is becoming scarcity
Prices of commodities like water and fuel will rise extremely before alternatives are well-developed.

COMMENTS ON THE LECTURE:

Nico spoke well, really slowly, which helped us to follow the speech.

I think that the lecture was a bit too bombastic. It went up to 1780's to industrial revolution and even though I understood the point that there has been different events that have accelerated change, I think that different examples could have been taken to the presentation, something more closer to what we could predict e.g. in the hotel industry.

Of course it's important to follow what's happening in the world and try to make so called safe risks, but if one works in the hotel industry and water is running out of the world, it's not important what decision you've made in the pass (except sell the hotel), the hotel will be bankrupt.