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Cultural Competitiveness and Profitable Investment in Tourism Industry

   

Added on  2019-09-26

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Student[COMPANY NAME] [Company address]SRI LANKAN TOURISM INDUSTRY
Cultural Competitiveness and Profitable Investment in Tourism Industry_1

Sri Lankan Tourism IndustryTable of ContentsPart 1..........................................................................................................................................................21.Factor condition.............................................................................................................................72.Demand conditions......................................................................................................................103. Related and Supporting Industries................................................................................................134. Firm Strategy, Rivalry....................................................................................................................155. Role of Government.........................................................................................................................166. Role of Chance.................................................................................................................................16Part 2........................................................................................................................................................18Advantages of FDI as Mode of Entry.................................................................................................18Disadvantages of FDI as Mode of Entry............................................................................................19Market entry strategy for Sri Lanka Tourism Industry...................................................................21Part 3........................................................................................................................................................21References................................................................................................................................................241
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Sri Lankan Tourism IndustryPart 1One of the major foreign exchange earner sector and the main growth area in any of the countryis its tourism sector. The tourism sector is highly beneficial for the places with cultural andnatural resources in abundance. In the past five years, the world tourism market has depicted atremendous growth of 3.7 percent and is even further suspected to show a growth of 4.9 percentin the coming five years. It is expected that the Pacific region and Asia would record the highestgrowth. Sri Lanka arrived in the international tourism sector in the 1960s era. Due to theabundance of natural and cultural resources, the country has shown that tourism sector is one ofthe most promising sectors for the economic development of the country especially after theperiodical setbacks during the civil war along with the natural disasters and world terroristattacks (Chapman, C. ,2005). For instance, it was seen that the number of international touristsentering Sri Lanka increased in 2008 accounting for 438,475 whereas the count was 18,969 in1966. Particularly, the Travel and Tourism contribution was seen to be around 7.9% of the totalGDP of the Sri Lankan economy in 2009. In 2009, tourism contributed around 503,000 jobs,6.2% of the overall employment and these facts are expected to grow by 2020 to around 6.7% ofthe total employment. Sri Lankan Travel and Tourism economy, out of the 186 registeredcountries of the WTTC is ranked at number 87 worldwide and 110 as per the contribution oftourism to the national economies (Ranasinghe & Deyshappriya, 2012).2
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Sri Lankan Tourism IndustrySource: World travel and tourism Council Economic impact report- 2009Source: ("Sri Lanka Tourism Development Authority | Sri Lanka Tourism DevelopmentAuthority", 2016)3
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Sri Lankan Tourism IndustryThe strategic issue in the field of the tourism industry of Sri Lanka is considered to be thecompetitiveness. In contrast to the other regions in Asia and the world, the last five years of thetourism growth in Sri Lanka are found to be highly flat. The tourism sector has realized that lackof growth in due to the civil conflict in the nation and the sector has also recognized the otherserious constraints related to the tourism business and its operations in the way the business isproceeding. This can be evaluated using the Porter’s model of the competitive advantage or thePorter’s Diamond.Porter’s model of the competitive advantage which is also known as the Porter’s Diamond isused as a powerful methodology which can help to establish enterprise for achieving superiorcompetitiveness in this whole while the world of globalized economy. This model does notdefine the competitiveness of the enterprise present in a nation on the basis of the natural as wellas favorable factors nut also depends on the factors that are generated by negative and positivesynergies having an ultimate goal towards the productivity growth. The Porter’s model or the‘Diamond of National Competitive Advantage’ has presented four major elements of the nationthat will help in shaping up of the local firms to compete so as to hamper or may be support thecompetitive advantage namely: factor conditions, demand conditions, related and supportingindustries and the firm strategy and rivalry. Additionally, the role of government and the role ofchance should also be taken into account for assessing the competitive advantage of the nation(Porter, M. (1998). The competitive advantage of nations. New York: Free Press)4
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Sri Lankan Tourism IndustryPorter’s DiamondFactorsNegative pointsPositive pointsFactor conditionsCorruption, terrorism1.Improving their tourism-related infrastructure,2.Exotic beaches3.High Literacy rateDemand conditionsLow encouragement is givento the stimulation of demandas well as the innovation, theintellectual property rightsalong with the safety standards1.High Middle class, 2.Access to foreign marketRelatedandsupporting industries1.Mostly important sitesare underdeveloped2.Few developed centersfor movies, shoppingetc.3.Development of center forshopping,culturalexcursions, dining, andentertainment for tourist atthe beach resorts. 4.Embodies the rich history ofSri Lanka colonization bythe British, Portuguese andDutch. 5.The Galle Fort has evenearned the World HeritageSite due to the best exampleof European presence in allof the Asia.5
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