A study of marketing alliance formation in the hotel industry

Abstract

Marketing alliances are flourishing in the hospitality industry. However, the pace of research has not been kept up with this evolving phenomenon. Past studies on alliances focused mainly on manufacturing or high technology industries and predominately in Western countries. There has been little attempt to explain and understand the specific characteristics of alliances formed in the burgeoning hospitality industry in the Asian region. The first objective of this study is: (la) to identify the pattern of marketing alliances and (1b) its relationship with the background of hotel companies in the East Asia hotel industry. The findings of this study revealed that there is a growth trend of marketing alliances in Hong Kong, China, Taiwan and Singapore, in which Hong Kong hotel companies are most active and dynamic in alliance formation. It was found that location and management status of hotel companies accounts for the variation in the type of alliances as well as the industry sector and country of origin of alliance participants. In addition, past literature tended to understate the intricacy of the alliance formation process by examining the driving forces of alliances and neglected the existence of the opposing forces which may lead to failure of alliance formation. In fact, the research results of Rigby & Buchnanam (1994) revealed that ninety percent of the alliances negotiated have failed in producing an agreement. Nevertheless, very few studies investigated the high failure rate in the alliance formation process. The second and third objectives of this study are: (2a) to examine the motives for and barriers to the marketing alliance formation and (2b) to determine the underlying dimensions of these motives and barriers; as well as (3) to examine the impact of motives and barriers of alliance formation on the success rate of alliance formation. To accomplish the objectives, a conceptual framework is developed which suggests that both driving and restraining forces will arise and interact with each other within the alliance formation process. If the impact of driving force outweighs the restraining force, an organization will form the alliance. On the other hand, the organization will fail to form the alliance if the impact of restraining force prevails over the driving force (Lewin, 1976; Benassi, 1993). In context of this conceptual framework, two hypotheses are formed and postulated that the success rate of alliance formation will be positively and negatively influenced by the underlying dimensions of motives for and barriers to alliance formation respectively. The underlying dimensions of motives for alliance formation found in this study corroborates some of the theoretical perspectives suggested in past literature. These dimensions include 'competence'; 'image enhancement'; 'efficiency'; 'reciprocity' and 'conformity'. On the other hand, four newly emerged dimensions of barriers to alliance formation were 'incompatibility'; 'discrepancy'; 'limitations' and 'unavailability of resources'. The success rate of alliance formation is then found to be positively impacted by 'competence' and 'image enhancement' while negatively influenced by "limitations' and 'unavailability of resources'.