On FDIs, exports and tourism:

Sri Lanka needs an integrated strategy - MTI

The key message from MTI Chief Executive’s presentation to CIM: Talking Point last week was the need for Sri Lanka to develop a holistic and highly integrated country and marketing strategy covering Foreign Direct Investments (FDIs), Exports and Tourism Promotion, as opposed to taking a narrow positioning platform perspective for these three drivers of the economy.

Referring to MTI’s Integrated Country Strategy Model the conventional approach was to question what the country can produce and export. Alternatively, the more contemporary approach, which is value driven and cost effective, is to ask what the world needs and consequently, how a country can develop competencies to meet this.

MTI Consulting CEO Hilmy Cader said the exports sector was looked at from a holistic view covering export focus, enabling environment, supply chain management, customer conversion, demand generation, value chain progression and branding to develop a competitive export strategy.

To explain the concept of developing a country tourism strategy further, Hilmy Cader, used the MTI 4R Model to illustrate the process that could be applied.

It is only after a diligent analysis of the Reasons, Region, Rivalry and Relevance, that we should attempt to answer strategic questions that will form the Tourism Strategy for a country. To understand the Reasons segment, one could question which tourism segment should Sri Lanka target?

Similarly, which regions or countries should Sri Lanka target? In turn, the Rivalry segment, asks with whom will we compete with and on what basis? Moreover, the relevance is understood by asking what should be our value proposition and what types of infrastructure and services should Sri Lanka develop, he said.

As illustrated in the 4R model, Reason implies that being a derived demand product, the global travel trade (of which tourism is an integral part of) is broadly segmented based on the intent to travel, which results in tourism segments such as leisure, business, MICE and more.

Alternatively, Region means that the tourists Sri Lanka could target could come from different parts of the world, each offering opportunities and challenges for Sri Lanka to convert and satisfy these groups.

Each would have its own characteristics and preferences, for instance, Europeans prefer Asian destinations as well as continental destinations like Spain, Portugal for the sun and fun, he said.

The following section on Rivaly relates to the increasingly more countries competing for the global tourism dollar, each with a specific value proposition and targeting specific customer segments. Therefore, when a customer plans her holidays, Sri Lanka would be competing with different countries and regions.

Therefore, a sound Tourism Strategy needs a thorough analysis of the countries that will compete with Sri Lanka for the tourism dollar. This could range from Kerala (for Ayurvedha) to Malaysia (for conferences). The final segment on Relevance has the understanding that each of the market segments and target markets would be looking for a relevant value proposition that the country should offer.

This could range from sophisticated conference infrastructure (Hong Kong, Singapore, Dubai) to City Shopping and Gourmet (Malaysia for Arab Tourists in the summer) to Beach Sports (Croatia). Building such infrastructure takes time and significant investments! Therefore Sri Lanka needs to take stock of what we have to offer - given the needs of the customer, Cader said.

It is the inter-play of these 4Rs that will determine the Destination’s Tourist Strategy and it is an ongoing process of iteration and fine-tuning - based on the challenges and changes taking place in the global tourism market inter-play of decisions.

Finally, Hilmy Cader cited many illustrations of how the Country Strategy is converted to results. For example, the encouragement of local firms to be multi-nationals (like what India, Brazil, Mexico and Taiwan have done, who dominate the list of the Top 25 World Class Multinationals).

Turning his attention to Sri Lanka, Cader cited many ways in which the Sri Lanka Country Strategy can be enabled.

One such possibility is to go beyond the conventional investor who comes with the business expertise and the funding by targeting sovereign funds, mutual funds, private equity and venture capital, he said.

With regard to tourism specifically, Sri Lanka needs to ‘test-drive’ conventions and business tourism, helping the global business community to ‘touch and feel’ the product.

In addition, Sri Lanka could tap into the hearts and wallets of Sri Lankan professionals that are non-resident in Sri Lanka, taking a cue from how well the Non-Resident Indian community has been harnessed by India.

Moreover, there is a critical need to invest in R&D, which is the real differentiation and consumer value - as opposed to the shallow of definition of adding value only by packing and brand naming it, he said.

One must ensure that Sri Lanka’s internal branding is carried out to ensure the external brand experience meets the brand promise made by Sri Lanka, thereby ensuring investors and tourists experience the promise made. The State of Kerala and Singapore are good examples of countries that have embarked on this, ranging from setting up Tourist Police to Training Tour Guides.