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Alina Gwoÿdziewicz Alina Gwoździewicz “Tourism Cluster in Cracow - application of Michael Porter’s 1 theory of clusters and focus on cluster promotion” MICHAEL PORTER’S CLUSTER THEORY Clusters - “geographic concentrations of interconnected companies and institutions in a particular field”2. Basing on a competitive advantage of a given region, companies and institutions are based in a specific place, to exploit the natural inclinations by making use of available resources, building necessary relationships, developing knowledge. Fierce competition among the firms in the area constitutes a motivation to increase the quality of production, services, know-how, which in effect leads to highest possible standards. But competing entities can also cooperate with each other on different levels (marketing, logistics, technology, etc.), which strengthens the region and the sector with positive synergies within the cluster. As a result the cluster becomes competitive nationally and globally by ensuring constant struggle for quality. This coherence of the cluster and internal cooperation is important, especially as regards service industry clusters and tourism cluster in particular. Quality of visitor’s experience, and his willingness to come back again, depends not only on the appeal of the primary attraction but also on the quality and efficiency of all the complementary businesses such as hotels, restaurants, shopping outlets, transportation etc. Their constant cooperation is essential. To analyse the clusters Porter developed, what he called a “diamond model” or “Competitiveness Diamond” – 4 sources of the competitive advantage of the location, connected with each other. Figure 1 shows these components and the interconnections between them. 1 This article is a short version of a masters thesis « Tourism Cluster in Cracow », written by the author under the guidance of Professor Jerzy Mikułowski Pomorski in the Department of European Studies 2 Porter Michael E., “Clusters and Competition”, Harvard Business School Press, 1998, Boston Figure 1. Porter’s “Competitiveness Diamond” Firm strategy, context and rivalry Input factors, Demand conditions conditions Related and supporting industries Source: Porter M., “On Competition”, Harvard Business School Press; 1998 The components of the “Diamond” with some examples of the attributes which require evaluation in order to achieve an effective and competitively appropriate view of the environment are shown below. “Clusters operate and succeed or fail in the context of a competitive environment. With respect to tourism, central competitiveness issue is how competitive the destination is as a whole rather than each individual component. In turn, the competitiveness of destinations has to be focused on achieving sustainability over time, maintaining a focus on all the components of competitiveness during medium and long term, and reinforcing the sustainable character of competitive advantages of the destination - even though these can and will change over time”3. Attributes of the Competitiveness Diamond 1. Input Factors, Conditions. The conditions of the economic infrastructure affecting tourism companies. 3 “The Cluster Consortium - Strategy in Action” 1999 2 Referring to the availability and conditions of basic factors. Including tourist attraction resources both natural and cultural, the planning of sustainable use of these resources, the territorial regulation, the availability of infrastructure and basic services, access to modern technology of lending and commercialisation of services, availability and quality of human resources, access to capital resources, etc. 2. Firm strategy, structure and rivalry. Operating conditions of the companies of the sector. This attribute looks at how the network of companies adapts to market requirements, the levels of rivalry, existing barriers of entrance and exit, legal, labour and fiscal structure, activities of local authorities, competitive strategies jointly accepted, the way of organization, the performance of management of the location, etc. 3. Demand Conditions. Trends and market conditions facing the industry. Referring to the characteristics of the demand captured by the destination: volume and seasonal conditions, socio-economic and demographic characteristics, markets of origin, tourist motivation and behaviour, level of satisfaction demanded, previous knowledge of destination, image of destination among tourists, etc. Includes also the grade of adjustment between the image of destination in tourist demand and the competitive position taken, which can be the object of investigations of a qualitative order. 4. The Cluster: Related and supporting industries. The conditions of the connected and supporting sectors. Referring to the linkages between firms and industries within the cluster, the degree of collaboration and the strength of networking organisations and associations.4 Another tool used by Porter in visualisation of a structure of a cluster is a “Cluster Map”. This analytical tool outlines the entities participating in the cluster and the linkages between them. Not only does the “Cluster Map” outline visually the organizations and entities involved in the cluster, it can be used to identify how complete or incomplete the cluster is in terms of direct and indirect suppliers and critical economic infrastructure. 4 “The Cluster Consortium - Strategy in Action” 1999 3 TOURISM IN CRACOW In the year 2000 there were approximately 4.35 million people visiting Cracow, 41,4% of this number are considered as tourists. 60% of them is coming in the summer5. The number of tourists coming to Cracow was constantly rising in last years, but has dramatically fallen in the year 2001 (3,6 million visitors)6. The relation of number of tourists and the number of one day visitors is estimated to be 1:5 in Poland as a whole and 1:1,2 in Cracow (data for the year 2000). These figures show us, that the amount of tourists coming to Cracow for longer is almost the same (only slightly lower) as the amount of people coming for just one day. Compared to data for the whole country, we can see a great difference. It is significant, that tourists come to Cracow for longer trips, they spend more than one day in the city. It is a great opportunity for the cluster to seize and a good basis to begin some campaigns aimed at maximizing spending per stay and at encouraging the people, who already are in the town, to stay longer than they were planning. In the year 2000 and 2001 most tourists spent 3 days in Cracow. However average statistical number of days spent in the city was 6. This discrepancies result from rising number of people coming to Cracow in educational and business purposes for a month or two, which overstates the statistical average7. The research of the Jagiellonian University for the Municipality of Cracow proves that 34% of tourists taking part in the survey were first-time visitors. That puts a great responsibility on authorities responsible for the image of the city - to make these people come again - and is a chance for the cluster to make them join the already large number of loyal clients (48% of visitors came to Cracow three or more times). 5 Lijewski T., Mikułowski B., Wyrzykowski J., „Geografia Turystyczna Polski”, Polskie Wydawnictwo Ekonomiczne, Warszawa 2002 6 Complete data in full version of the thesis 7 « Przyjazdowy ruch turystyczny w Krakowie 1.1.2001 - 31.10.2002 », Jagiellonian University for the Municipality of Cracow, Kraków 2002 4 Cracow is quite easy to reach, there is a lot of means of transport available for tourists, who want to visit the city. It seems interesting, that a train is the most common way to reach Cracow (32% of visitors). This might result from very low prices of this services in Poland (compared with other countries as well as with another means of transport within Poland) and a dense railway network of frequent connections. The same number: 26% of visitors comes to Cracow by car or by plane. Most of the tourists come to Cracow with friends and family (43%), who are as well their main source of information about the city (60,6% before the trip, 60% during the stay8). According to the research done by the Cracow branch of the Institute of Tourism, an average cost of a stay in Cracow (all the costs included, trip included) in the year 2000 (Polish and foreign tourists) is estimated to be 3000 zlotys (around 750 USD). Average spending in the city itself (hotels, restaurants, visiting, cultural events, etc.) equalled approximately 200 USD, which is still much higher than the average expenditure per stay for whole country (136 USD). According to the results of research of the Jagiellonian University - 73,3% of tourists, who visited Cracow in the year 2001/2002, spent less than 1000 zlotys (250USD) per day, 60% - less than 200 zlotys (50 USD), which is connected with the type of accommodation commonly used by the visitors - their friends and family. As most attractive, tourists perceived the following places: Old Town - 65%, Wawel - 56%, Cracow by night - 43%. Attractions searched for by the tourists, but not easily accessible were: the underground Cracow, the mysteries of monasteries, viewing flights with a balloon or a plane, a night in the salt mine in Wieliczka9. The questioned tourists were asked to assess individual elements of the overall tourism product. The results show that the state of public toilets and general sanitary state of the city are major concerns of visitors of Cracow and constitute a challenge for the city authorities. The atmosphere of the city and Polish hospitality won the 8 Ibidem 9„ Przyjazdowy ruch turystyczny..” , op. cit. 5 most points among the components of the overall Cracow tourism product10. The only thing to do is to encourage these positive phenomena to grow and prevent the authorities from enacting too strict the rules, which could result in spoiling the ambiance. Regardless all the inconveniencies and high prices, 93% of foreign tourists and 85% of Polish visitors would recommend Cracow to their friends. It is worth noticing that foreign visitors are more convinced (only 6% does not know if they would).
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