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  1. 1. Information Technology & Tourism, Vol. 5 pp. 13–23 1098-3058/02 $20.00 + .00Printed in the USA. All rights reserved. Copyright © 2002 Cognizant Comm. Corp. www.cognizantcommunication.com NETWORKING TOURISM SMEs: E-COMMERCE AND E-MARKETING ISSUES IN REGIONAL AUSTRALIA PATRICE BRAUN School of Business, University of Ballarat, Ballarat, Vic 3353, Australia Networks, knowledge, and relationships have become crucial assets to business survival in the new economy. Research indicates that network building is a major new source of competitive advantage and an essential regional and indeed global management requirement. Because regional policies en- courage interfirm alliances and the development of regional economic communities, the fostering of a culture of connectivity, networking, learning, and trust between regional Australian small and me- dium-size tourism enterprises (SMTEs) may offer a potential solution to the possible loss of competi- tive advantage for Australian tourism enterprises. It is suggested that SMTEs would benefit from increased information flow through regional networking and cooperative e-marketing campaigns to enhance market visibility, global positioning, and strategic leverage in the new economy. Network structures Networking SMTEs e-Commerce e-Marketing Regional Collaboration Trust Introduction technological paradigms (Konstadakopulos, 2000). To achieve success in this techno-economic innova- The knowledge economy is a strategic combina- tion paradigm requires new ways of thinking for all.tion of many factors with new knowledge platforms In order to compete in the knowledge economy,and relationships underpinning competitive advan- companies must be prepared to use technology-me-tage. Enabled and driven by connectivity, the knowl- diated channels, create internal and external value,edge economy is challenging the fundamental bases formulate technology convergent strategies, and or-of established government frameworks, conventional ganize resources around knowledge and relation-business practices, and traditional marketing disci- ships (Rayport & Jaworski, 2001). Governmentsplines. One can view the knowledge economy as a must seek to define appropriate combinations ofrelational space in which the synergy of coopera- technologies, policy settings, and capacity buildingtive behavior (in the form of collective learning) fa- based on networked information technologiescilitates actions in a dynamic marketplace laden with (APEC, 2001). On the marketing side, communica-Address correspondence to Patrice Braun, School of Business, University of Ballarat, PO Box 663, Ballarat, Vic 3353, Australia. Tel:61-3- 5327-9465; Fax: 61-3- 5327-9405; E-mail: p.braun@ballarat.edu.au 13
  2. 2. 14 BRAUNtion and customization are among the new demands namic and maximized regional assets (Amin, 1999;of the knowledge economy, whereby mass markets Cooke, 1996), innovation programs are designed toare a phenomenon of the past and interactive mar- stimulate learning, innovation, and regional devel-kets of one are the future (Wind & Mahajan, 2001). opment. The latter have also proven advantageous One consistent pattern in the new economic busi- towards enhancement of business performance, col-ness process is the complex networks of interaction, laboration, and networking (Cooke & Wills, 1999;whereby emphasis on collaboration between firms Henderson, 2000). Indeed, what was once endog-is placed as the key for new models of innovation enous regional development has evolved into an(Marceau & Dodgson, 1998). Research indicates that exogenous network or associational developmentnetwork building is not only a major new source of paradigm (Amin & Thrift, 1995; Cooke, 1996;competitive advantage for any company, but a cru- Cooke & Morgan, 1998; Diez, 2001; Morgan 1997;cial asset to business survival and an essential glo- Nouwens & Bouwman, 1995).bal and, indeed, regional management requirement(Chisholm, 1998; Davis & Meyer, 1998; Martinez- Networks of InteractionFernandez, 1999; Milton-Smith, 1998; Porter, 1998). Network formations may vary from existing clus-The very awareness of competitive international ter consortia to loosely coupled business systems,opportunities, and threats, has put regional interests, online networks, or emerging grass-roots economicand hence the interests of small and medium-size community developments. No matter what the for-enterprises (SMEs), back on the agenda (APEC, mat, generally their aim, and the aim of regional2001; Boekholt, 1997). Regional innovation and policies, is to develop a more effective and prosper-growth theories in particular are focusing on the ous business sector through interfirm cooperation,emergence of networks and the development of re- knowledge, and resource sharing (Chisholm, 1998;gional economic communities, whereby policy mak- Diez, 2001). In the context of emerging technolo-ers concerned with the performance of regional gies and related knowledge–economy business mod-economies are seeking to foster a networked com- els of linking stakeholders in dynamic clustersmunity culture (APEC, 2001; Martinez-Fernandez, (OECD, 1999), connectivity is revitalizing conven-1999). tional reasons for clustering (e.g., creating critical mass), as it can help facilitate the knowledge-based Regional Innovation infrastructure network imperative for today’s com- Regional development literature has proliferated petitive advantage (Porter, 1998).in the last decade (Amin, 1999; Cooke & Morgan, It is believed that the prime driving force behind1998; Diez, 2001; Henderson, 2000; Storper, 1997) regional economic growth is no longer just the physi-with networking, learning, and regional development cal attributes of a region, but the social capital em-being portrayed as pivotal linkages for regional de- bedded within the region (Diez, 2001). Recogniz-velopment and growth. In what Cooke (1996) ini- ing that economic growth is accomplished bytially termed a networked regional innovation ar- designing regional policy initiatives that stimulatechitecture, a rapidly growing body of literature learning, regions are being turned into so-calledsuggests that across continents regional innovation learning regions in which socially a variety of agentspolicy makers are planning and implementing net- and institutions take part in interactive learningwork-based innovation policies. Examples of the cycles (Henderson, 2000; Morgan, 1997). Thus, bynetwork trend may be found internationally on the entering into an interactive learning process, regionsEuropean Commission and the APEC action agen- can create competitive advantage. Although it maydas to build flexible partnerships and regional net- be argued that by developing infrastructure and byworks (APEC, 2001). Stimulated by research pio- sharing new technologies, regions are able to reduceneered in regional settings both in Europe and uncertainty for their industries and produce positiveAmerica, where evaluated regional economies dem- economic results, measuring the success factors ofonstrated that learning and knowledge transfer such linkages as networks, learning, and regionalthrough “networking” made the regions more dy- development is still in its infancy. Despite this popu-
  3. 3. NETWORKING TOURISM SMES 15larly adopted regional development agenda, little Albeit somewhat slow in the uptake and initiallyempirical evidence is available as to its merit trailing business-to-consumer (B2C) and consumer-(Maskell, 1997). to-consumer (C2C) systems, travel and leisure book- Having examined the adoption rate of regional ing sites, retail, and business-to-business (B2B) e-innovation systems, Bergman (2001) asserts that commerce exchanges, often referred to as portals,policies that work indirectly through the market are rapidly becoming the norm in Australia (Wil-structure of regional economies are preferable over son, 2000). The popular media predicted that by 2001direct intervention through innovation agencies. more than 80% of large Australian organizationsFocusing on the dynamic nature of the new economy, would support industry-specific B2B portals or someothers (Maskell & Malmberg, 1999; Storper, 1997) form of online clustering to accommodate B2B re-point out it is the capacity to learn and adaptation sources, extranets, customer and supplier integra-rate to change that defines the success of a region. tion as well as other interorganizational processesMost important perhaps are the evaluation methods (Harpur, 2000). While such forecasts are not easilythemselves, which are in need of reassessment. verified, the prevailing view is that network exter-Evaluation models such as measuring adoption, eco- nalities such as Internet portals and new e-commercenomic impact, or monetary cost/benefit ratios are technologies are necessary to transform businessconspicuously traditional for this new generation of capabilities from a parochial to a global level (Dav-pluralist innovation policies and should be supple- enport, Jarvenpaa, & Beers, 1996; Goolsbee, 2000;mented by innovative (e.g., interactive) and partici- Murray & Trefts, 2000).patory evaluation processes (Diez, 2001). By facilitating B2C and B2B horizontal and ver- tical trading via automated e-commerce engines, the SME Networks latest IT solutions are being touted as collaborative e-commerce solutions in which strategic industry Australian industry sectors that will most likely alliances are key. Companies such as SAP promotebenefit from networking and related expansion into global solutions through customized supply chainthe e-commerce arena are expected to be those that interfaces in which “customers, employees, suppli-offer products and services that are amenable to e- ers and business partners work together in one vir-commerce. These sectors include information tech- tual business environment as if they were all onenology, tourism, entertainment, banking, and finance company” (SAP, 2000, p. 16). Many such business(NOIE, 2000a). The entertainment and tourism sec- applications revolve around supply chain partneringtors are currently peaking 5% higher than other approaches and tend to focus on the needs of largeAustralian industry sectors. The tourism sector per- enterprises rather than on the needs of the tradingformance level may in part be attributed to the fact community (Forrester Research, 2001a).that large Australian tourism enterprises have em- Although technology providers are breaking outbraced information and communications technolo- of the corporate straightjacket and appealing togies such as global reservation systems (Applebee, SMEs to tap into networked business solutionsRitchie, Demoor, & Cressy, 2002), and in part to the (Hayes, 2001), such environments are not likely toreduced cost of distribution Web-based travel ser- be conducive to SME network adoption, or the fos-vices provide (Pappas, 2001). Whereas intermedi- tering of collaborative networks, without address-aries such as travel agents were once indispensable, ing the needs of the trading community (Braun,travelers can now enter their preferences—such as 2001). B2B marketplaces tend to create value inan airline, destination, desired travel times and generating lower prices for buyers and streamliningdates—directly into a selected online booking sys- buyer and supply chain operations, neither of whichtem, which then processes the information and de- are core objectives for nonaligned service industrylivers a choice of options along with a secure trans- SMEs such as Australian tourism operators. In ad-actions environment. Australian airline Qantas dition, the B2C market the focus of today’s e-com-asserts that 70% of its airline ticket sales (which in- merce customer has shifted from early adopter firmscludes phone reservations and Web-based transac- to proven value and brand companies, which favor-tions) now take the form of e-tickets (NOIE, 2000b). ably positions many of the larger companies with
  4. 4. 16 BRAUNan off-line established customer base and recognized ture and critical mass of personnel. In contrast, abranding (McKinsey, 2000). SME networks may dismal 4% of small and medium-size tourism enter-never be in a position to challenge large firms as prises (SMTEs) with an Internet presence were tour-equals in the e-commerce marketplace, but even ism and travel businesses. It was hence seen as im-within regional competitive domains, issues such as perative that SMTEs invest in skills and alliances tonetwork brand establishment and value for custom- exploit new technologies and emerging markets toers would need consideration. avoid potential loss of competitive advantage (CRC Adoption of networked technologies by SMEs is Tourism, 1999). A more recent study conducted indirectly related to the size and nature of SMEs and the Canberra region (Applebee et al., 2002) con-largely depends on their perception of affordability cluded that uptake had increased but that industryand opportunities for their business (OECD, 2000). knowledge relating to the Internet still needed con-In European studies on SME positioning in the new siderable expansion. Larger SMTEs used the Interneteconomy (Cooke & Wills, 1999; Fariselli, Oughton, more than small SMTEs and nonusers had strong& Picory, 1999), SME networking appears contin- negative perceptions on the effectiveness and adop-gent on favorable economic climates (e.g., govern- tion of information and communication technolo-ment-sponsored external networks), with such in- gies (ICT). While studies on the adoption of ICTstitutional factors directly affecting the relationships are important, too few attempts have been made toamong different economic actors (Cooke & Wills, analyze the drivers leading to ICT changes in the1999; Fariselli et al., 1999). In Britain commercial tourism landscape (e.g., strategic, environmental, andapplication service providers are facing an uphill marketing-based drivers), which would considerablybattle with British SMEs showing no signs of inter- broaden the research platform (Tremblay, 2002).est in networked technologies (Forrester Research, In the travel industry networks and new consortia2001b). seeking aggregate selling and sourcing capabilities Australian SMEs, which make up 96% of all Aus- are largely driven by the airline industry, which seekstralian enterprises in the private nonagricultural sec- extended global reach through strategically alignedtor (Australian Bureau of Statistics, 2000), are likely partnerships and cost-saving synergies in servicesto display similar reticence towards adoption of net- such as baggage handling, catering, engineering, andworked solutions. New millennium research (NOIE, maintenance (Pappas, 2001). Large players with2000b) indicates that SMEs still hesitate to invest economies of scope are clearly in a position to domi-their time and money in a rapidly changing economy. nate the market, but under the right circumstancesThe study cites issues such as fear of isolation, com- the role of regional tourism and SMTEs can be sig-petitor use of the Internet, alienating intermediar- nificant (Buhalis, 2002; Prosser, Hunt, Braithwaite,ies, uncontrolled growth, lack of technology skills, Bonnett, & Rosemann, 2000). In a decentralizedand lack of a strategic sense of how to move for- industry climate with low entry barriers, Australianward as significant uptake barriers (NOIE, 2000b). SMTEs can develop new service industry enterprises,The cost of access to telecommunications networks create regional employment (Barry & Robins, 2001),is relatively higher in rural areas, proving to be an- and attain a regional profile. SMTEs tend to operateother limitation on the uptake of e-commerce in re- in isolation and many are still uncommitted to in-gional areas (“Regional Centres,” 2000). These bar- dustry initiatives such as accreditation, training, mar-riers tend to foster an element of inertia among keting, and visitor satisfaction (Tourism Victoria,Australian SMEs in adopting technology solutions. 2001). Hence, value adding to their business throughAustralian SMEs also perceive innovation policies the uptake of technology and partnership buildingas pertaining to large firms and are hence suspicious to create competitive advantage is not a priority. Inof e-commerce regulations (NOIE, 2000b). addition, connectivity is not as prevalent in regional A 1999 national tourism online scoping study and remote Australia as infrastructure representa-(CRC Tourism, 1999) found that large companies tives would like us to believe. While new genera-were adopting Internet technologies as a natural evo- tions of connectivity based on satellite and radiolution of their business strategies with technology wave technology have great potential for regionalchanges being facilitated by their existing infrastruc- Australia, today’s level of regional and rural con-
  5. 5. NETWORKING TOURISM SMES 17nectivity is still a long way from broadband capac- on social contexts (Brown and Duguid 1998). A keyity and, for often geographically dispersed tourism social concern inhibiting cooperation is lack of trustoperators, from reliably sharing resources and data. (Australian Bureau of Industry Economics, 1995). Since joining an interfirm network will constitute Trust, or the lack thereof, is more likely to be anan enormous conceptual leap into the future for many issue in networks than in one-on-one linkages, be-SMTE managers, more attention will need to be paid cause the latter tend to be formulated as informalto inhibitive uptake factors such as lack of infrastruc- rather than formal agreements (Australian Bureauture, fear of competitors, and lack of strategic direc- of Industry Economics, 1995).tion in the new economy (Crase, Lamb, & Patullock, There is a considerable body of literature on in-2000). Considering that moving up the value curve terfirm trust. SME fear of opportunistic behaviorin the knowledge economy is likely to comprise a from competitors has alliance literature scholarssteep learning curve for all (Earl, 2000; Ghoshal, (Gulati, 1995; Fukuyama, 1995) stress the impor-Bartlett, & Moran, 1999), e-commerce novices will tance of trust and personal interaction in interfirmneed substantial encouragement and support to make alliances. Not all researchers believe that alliancesthem willing to take the e-business plunge. SMTE necessarily have to be based on trust, as long as sys-value creation should initially focus on e-business temic mechanisms are in place that allow stakehold-awareness among individual SMTEs to reduce iso- ers to have confidence that alliance partners willlation and maintain core market reach in a rapidly exhibit cooperative rather than opportunistic behav-changing economy (Braun, 2001). SMTE capacity ior and not take competitive advantage of knowl-building will not only make e-markets more acces- edge-based exchanges (Beamish, 1987; Das & Teng,sible, but also generate long-term support towards 1997). Others argue that trust can be built duringproactive economic intervention and partnership the relational exchange (Gulati, 1995; Ring & Vanbuilding (Forrester Research, 2001a). de Ven, 1992). Alternatively, the trust may be his- torical and already in existence between individuals Partnership Building of different firms with interaction taking place in an atmosphere of continued trust building between In the past, Australian SMEs have not been known stakeholders (Konstadakopulos, 2000).for their collaborative approach to business (Aus- As noted earlier, strategic alliances in travel andtralian Bureau of Industry Economics, 1995). How- tourism occur predominantly between big playersever, a relatively recent study of 2500 Australian (Pappas, 2001) (e.g., between airlines and hire carSMEs on their involvement in business networks companies, between airlines and major credit cardnoted a significant level of interest in networking or companies). In such alliances each business partyformulating networks in the future, indicating that has crucial roles to play, and must do so in an atmo-networking is likely to become important in the busi- sphere of trust, unity, and collaboration. Airline al-ness future of Australian SMEs (Dean, Holmes, & liances in Australia have predominantly been basedSmith, 1997). Two types of business networks, for- on specific agreements that do not require the ex-mal and informal networks, were identified whereby change of sensitive commercial information andformal networks constituted formal arrangements have operated without strong commitment (Tourismbetween companies to consolidate resources and Futures International, 1999). Partnership and trustinformal networks were seen as loose arrangements building requires prolonged socialization andfacilitating information exchange. Service compa- externalization to assure stakeholder sinceritynies were notably more likely to be involved in for- (Nonaka & Takeuchi, 1995). Anecdotal evidence ofmal and informal networking than manufacturing SMTEs in regional Victoria suggests that trust rela-companies. tionships among regional actors are parochial and Lack of suitable partners, lack of time, and lack built on long-term relationships. Steeped in socio-of financial assistance were cited as inhibiting fac- cultural ties, the level of socialization andtors for collaboration (Dean et al., 1997). Partner- externalization appears to depend on individualship building between firms is not solely contingent SMTE positioning within the destination hub andon sourcing funding or technology partners, but also its access to embedded information channels.
  6. 6. 18 BRAUN With networking on the rise, the opportunity ex- tomer tastes and circumstances, they are in dangerists to cultivate a new ethos of connectivity, social- of being isolated and out of touch with changingization, and trust between Australian SMTEs, but market dynamics. To avail themselves of new datasuch a collaborative or network culture would need mining technologies and updated market research,to be fostered. Informal processes such as attending SMTEs would do well to partake in cooperativeseminars, local or regional association meetings, and online initiatives.online chats with other firm managers can establish Cooperative marketing in the print and other con-a high level of interfirm relationship building (Leana, ventional media has been in place in the State of1999). Incremental and more formal levels of col- Victoria since the inception of a Regional Coop-laboration can be introduced once SMTEs are re- erative Marketing Program (RCMP) in 1993. Theceptive to transform relationships into dynamic co- program was developed by Tourism Victoria, theoperation between trusted SMTE partners within State’s peak tourism body, as part of its strategicoptimized information sharing environments. Such direction to develop integrated marketing cam-information partnership environments should have paigns for all its product regions and gain com-clearly defined collaboration benefits for participat- petitive advantage through regional cooperation.ing SMTEs (e.g., saving time and resources yet re- Over the years Victorian product regions have aug-taining locus of control) and be linked to tangible mented their visibility by developing cross-mediarewards (e.g., enhanced market visibility), global marketing campaigns, producing high standardpositioning, and strategic leverage in the new collateral conform with state funding guidelines,economy through cooperative marketing incentives. and by harnessing regional industry dollars through brochure advertising sales. While the RCMP may SMTE Cooperative Marketing be termed a success by the latter standards, pro- gram participation proved too costly for many The digital marketplace not only brings rapid pro- SMTEs, which in some product regions resulted inliferation of new products and services, but also new limited industry participation and program depen-ways of marketing. Information technology is slash- dency on local government contributions. Last yearing marketing cost, removing intermediaries, and the RCMP framework was remodeled to augmentredefining marketing relationships (Häubl & Trifts, industry participation by relaxing collateral pro-2000; Rayport & Jaworski, 2001). Like the afore- duction guidelines and related pricing structuresmentioned economic and policy practices, market- and to stimulate cross-regional collaboration bying in the cyber age requires dynamic and innova- modifying the funding distribution (Tourismtive strategies. Victoria, 2001). All markets are complex no matter what mecha- As part of their cooperative campaign offering,nisms are used by the buyer. Keeping up with rap- product regions have been actively courting indus-idly changing marketing trends is a challenge for all try members to participate in new communicationsfirms but is particularly confronting for resource- channels (e.g., offering e-commerce services viaand time-poor SMEs. Whereas SMEs were once able their respective product region Web sites). By in-to intuitively grasp their market, emergent digital cluding Web services in their cooperative campaigns,technologies are increasingly altering market seg- product regions hope to get more operators on board,mentation and market predictability, making small obtain a bigger piece of the state cooperative fund-firms more vulnerable to market changes (Gaulden ing pie, and increase market share. Because no& Jackson, 2001). RCMP regional Web directives are in place, product For SMTEs the dominant functions of an online regions are implementing ad hoc Web services andtourism business remain product promotion and in- participation schemes. In fact, regional e-commerceformation (Applebee et al., 2002; CRC for Sustain- developments are in direct contrast to Tourismable Tourism, 1999). Because SMTEs are relatively Victoria’s own lagging objectives to build a com-new to the virtual world and have neither the exper- prehensive statewide site with listing, booking, andtise for continuous digital brand building nor the transaction services for Victorian tourism firmsresources for compiling a complete picture of cus- throughout the product regions.
  7. 7. NETWORKING TOURISM SMES 19 Because increased numbers of SMTEs are seeking Most B2B portals still lack information exchangea Web-based presence for information and marketing or interaction between stakeholders. However, therepurposes (Applebee et al., 2002), regional programs is a recent and rapid rise of interest in so-called en-are not only competing with their own state peak body terprise portals (Harpur, 2000), which sport verticalfor the SMTE marketing dollar but also with numer- B2B functions—including information taxonomy,ous independent commercial Web developers. Gen- content aggregation, publishing and industry links—erally SMTEs are not in a position to afford listings as well horizontal personalization and virtual com-on multiple Web sites, and anecdotal evidence in re- munity functionalities. By satisfying both relationalgional Victoria suggests that this smorgasbord of Web and transactional needs and fostering relationshipsofferings has only added to technology uptake con- and networks of interest within these e-market placesfusion for SMTEs with limited knowledge of e-com- (Armstrong & Hagel, 1996), SMTE portals have themerce and small marketing budgets. potential to engage SMTEs and become competi- While independent Web developers can offer com- tive online networks.prehensive Web services and a degree of tourism Earlier discussed network solutions appear illmarketing, collaborative marketing is not a core suited for SMTE collaboration, and product regionobjective. Cost versus prominence of listing on the portals would need to provide suitable SMTE train-vast Tourism Victoria site and participation require- ing programs and beneficial economic frameworksments such as accreditation by 2003 may ultimately for SMTEs to be willing to participate. Cooperativeprove fatal for the state site. Having access to one- marketing programs would either need to raisestop-shop marketing services within their product enough funds to provide these services or they mightregion programs, which have established links to consider an alternative business structure (e.g., build-state and national tourism marketing bodies, could ing a virtual cooperative).present better value for money for SMTEs. How- Cooperatives are voluntary associations of indi-ever, because SMTEs think with their hip pocket, viduals and small business owners formed to meetregional marketing bodies responsible for product common economic, social, and cultural needs (In-region marketing campaigns would need to aggres- ternational Cooperative Alliance, 1995); they meritsively market such benefits. another look in the digital economic light. Coopera- tives date back to the 1840s when British socialistsTourism Cooperatives set up the Rochdale Cooperative in response to changing economic times during the Industrial Revo- With the rise of portals and Internet-based mar- lution (James, 1999). Their crucial feature is the linkketing, Victorian product regions are in an excellent between investment and return through participationposition to apply upstream reach and product rich- and ownership.ness by extending their tourism marketing programs Australian cooperatives, which are predominantlyinto Web-based cooperative marketing campaigns. associated with primary industries, have been on theGiven that the regional tourism strategy (Tourism wane due to industry deregulations and reduced lev-Victoria ,2001) and general marketing trend is to- els of support (James, 1999). Restructuring of tradi-wards relationship marketing, whereby firms adopt tional cooperative structures into shareholder-owneda mix of cooperative and competitive strategies with companies, which can attract outside investment andboth clients and competitors (Young & Wilkinson, be listed on the Australian Stock Exchange, has,1997), joining a regional industry B2C portal can however, provided a welcome boost to ailing Aus-be advantageous for regional Victorian SMTEs in tralian cooperatives (Baker, 1998).terms of pooling resources to conduct market re- Nelson (1999) compares today’s learning organi-search and accessing market reach incentives, yet zations to early cooperative models, which made aeffectively compete with rival SMTEs. When such commitment to ongoing learning in order to com-an industry portal is designed for concurrent B2B pete in a difficult business market and achieve com-functionality, SMTEs can value add to their busi- petitive advantage for their cooperative organizationness by accessing industry communication, support, by being risk-takers, partnership builders, profit-and best practice content (Braun, 2001). sharers, niche marketers, and investor-controlled
  8. 8. 20 BRAUNbusiness innovators (Nelson, 1999). He might have perpetuate trust amongst regional SMTEs, which inextended his comparison to industry networks, new- turn will produce know-how and regional economicgeneration cooperative structures similarly commit- sustainability. Adding appropriate digital technologyted to resource sharing and knowledge innovation solutions to successful cooperative practices shouldin an unpredictable economy. Electronic technolo- result in a regional SMTE portal model that accom-gies are already being used to improve communica- modates cooperative e-marketing objectives withintion efficiency and effectiveness of cooperatives a structure that allows SMTEs to save time, save re-(Nelson, 1999). Product region marketing coopera- sources, retain locus of control yet benefit from col-tives in Victoria looking to enter the e-commerce laborative initiatives.arena would potentially benefit from formulating a Because a cooperative portal has the potential tocooperative or electronic business alliance for re- emulate all the benefits of a traditional cooperativegional competitive advantage (Wilson, 2000). and achieve competitive advantage through niche How does a virtual tourism cooperative equitably marketing, e-commerce procurement, SMTE infor-capture value for regionally dispersed tourism op- mation exchange, and knowledge management, e-erators with different income potential? There are cooperatives may well emerge as a significant 21stmany ways to structure a cooperative B2C and B2B century SMTE online model.portal (Kerrigan, Roegner, Swinford, & Zawada,2001) and create an environmental fit to suit seg- Suggestions for Future Researchmentation, differentiation and position (Wilkinson& Young, 1998). A traditional way is to link invest- This article has discussed how fostering of a cul-ment and return with participation and ownership. ture of connectivity, networking, learning, and trustA regionally dispersed shareholder-owned structure between regional Australian SMTEs may offer a po-might also wish to explore outside investment, ad- tential solution to the possible loss of competitivevertising, and sponsorship structures. Another way advantage in the new economy. Because networkingis to base subscription on the number of hospitality and cooperative relationships are considered primeservices the participating SMTE runs and the num- determinants of commercial success, Australianber of users for each. Yet another approach is to tie SMTEs have the opportunity to both collaborate andcooperative membership fees to use of cooperative compete by joining a regional marketing portalservices (e.g., number of transactions, level of par- founded on cooperative principles such as sharingticipation in cooperative marketing campaigns) or resources and exchanging industry knowledge.the size of the SMTE employee base using coopera- Having drawn on the interdisciplinary fields oftive services (Kerrigan et al., 2001). networking, trust, and cooperative structuring, it is Defining the right portal model for regionally dis- suggested that overcoming potential loss of com-persed SMTEs is a difficult task. Given the reluc- petitive advantage for SMTEs in the digital economytance of SMTEs to enter e-commerce and embrace will require strategic SMTE community buildingnetworked solutions, there is much to be learned with connectivity, collaboration, and trust as pivotalfrom the communication and trust-building experi- building components. As with any new model, thereences of stakeholders in existing cooperatives. Stake- is the danger that significant additional factors mayholders need to develop a clear understanding of not have been taken into consideration. While thiswhat they can gain from collaboration and what can article demonstrates that in the new economy thekeep them from being successful. By extending col- focus has to remain on individual SMTE needs ratherlaborative marketing to the Web, it is necessary to than on networked technologies, there is much scopetake stock of the benefits of collaborative marketing for further cross-disciplinary research within bothby exploring a common sequence of issues, ques- theoretical frameworks and practical applications.tions, and challenges and by identifying the motiva- SMTE positioning in the global marketplace, pub-tion for collective action, key activities, available lic versus privately networked SMTE technologies,resources, and stakeholder interests. Once individual SMTE relationship marketing, and industry-basedand collective goal orientation is realized, partici- SMTE capacity building are all timely research di-pation in a regional industry cooperative is likely to rections for the knowledge economy.
  9. 9. NETWORKING TOURISM SMES 21 Biographical Note Thuringowa, Qld, September 8–12. Brown, J. S., & Duguid, P. (1998). Organizing knowledge.Patrice Braun holds a Masters by Research degree from James California Management Review, 40(3), 90–111.Cook University of North Queensland in information delivery Buhalis, D. (2002). Conference reports. Tourism Manage-via the Internet for community use. Ms. Braun is an e-business ment, 23, 427–428.lecturer and consultant and is currently undertaking doctoral Cooke, P. (1996). The new wave of regional innovation net-research in regional connectivity and electronic commerce with works: Analysis, characteristics and strategy. Small Busi-a focus on the adoption of e-commerce and e-marketing tech- ness Economics, 8(2), 159–171.nologies towards competitive advantage for small and medium- Cooke, P., & Morgan, K. (1998). The associated economy.size tourism enterprises in regional Australia. Firms, regions and innovation. 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