Study on Key Success Factors of Leisure Agricultural Areas of International Tourism Levels from the View of Core Resources and Competitive Advantage

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Study on Key Success Factors of Leisure Agricultural Areas of International Tourism Levels from the View of Core Resources and Competitive Advantage Meng-Long Shih, Associate professor of Social Studies Education, National Taitung University, Taiwan Ke-Chung Peng and Feng-Jui Lin, professor and Associate professor of Agribusiness Management for National Pingtung Science and Technology University, Taiwan ABSTRACT With economic growth and social change, leisure activities have become a key to satisfy the public s recreational needs. Tourism industries of leisure agricultural areas combining industry, culture, leisure, and living have transformed into a drive to boost local economies. Thus, this study aimed to probe into the development factors and conditions of international tourism levels in leisure agricultural areas from the view of core resources and competitive advantage, and determine the key success factors (KSF) through AHP. The research findings demonstrated that the KSF of leisure agricultural areas of the international tourism level include: agriculture resource application, overall characteristics, product originality and development, market segmentation and positioning, resource uniqueness, environmental protection, conservation and crisis management, and traffic and signal systems, which are strengthened into three critical factors: core resources of leisure agricultural area, environmental conservation and traffic quality. Keywords: leisure agriculture, Analytic Hierarchy Process (AHP), core resource, competitive advantage, international tourism level INTRODUCTION With unique geography, as well as rich and diverse cultural and natural resources, Taiwan possesses a significant potential to develop tourism. In recent years, incomes and educational levels of the Taiwanese have increased, and leisure and tourism activities have become more popular. With advancements in transportation and information technology, international interactions have become more frequent, and thus international tourism is blossoming, which severely increases competition in the international tourism market. How to reinforce international tourism competitiveness has become an important issue to the government. With social and economic developments, and changes to the industrial structure, agriculture has been transformed from a primary industry into a diversely managed industry. Leisure agriculture is a new form of agricultural operation that combines local industry, cultural characteristics, and natural ecology. The Council of Agriculture, Executive Yuan established an overall development plan of leisure agriculture, and guided leisure agriculture operations through regional planning to improve investment, facilitate international agriculture throughout Taiwan, create job opportunities in rural villages, increase the output of leisure agriculture industries, overcome the difficulties of agricultural development, and boost local economy. In the future, the development of leisure agriculture will be based on experience, tourism, landscape, and local cultures to emphasize the diversity of agriculture in Taiwan. The government will create high-quality operational environments and plan leisure agricultural areas of international tourism level, which will become critical resources of the domestic tourism and leisure industry, and can reinforce the depth, width, and characteristics of local tourism service industries. The government has offered significant support to local tourism industries. For instance, the issuing of 180-day visa to elderly retired Japanese nationals. In addition to living convenience, complete transportation systems, modern facilities, and cutting-edge IT applications, Taiwan possesses other positive factors for tourism development. Determining methods to attract foreign holidaymakers at local leisure farms, and constructing leisure agricultural areas of international tourism levels have become very important. Proper conditions to facilitate the development of these

advantageous factors are also very urgent. This study aimed to probe into the KSF of leisure agricultural areas with international tourism characteristics from the view of core resources and competitive advantage, and propose suggestions for operation and management of leisure agricultural areas to improve international tourism competitiveness. LITERATURE REVIEW 1. Literatures on KSF The concept of key success factor (KSF) or critical success factor (CSF) was initially proposed by American economist, John R. Commons (1934), and was based on the idea of limited factors, which was applied to management and negotiation within economic systems. American scholar Chester I. Barnard (1948) used this concept in his theory of management and decision-making, and applied strategic factors to organizational management, thus attracted the attention of many scholars and further researches into this concept. This study defined KSF as follows: KSF is the key competitive advantages to be possessed by companies when facing changes of industrial environments (Ferguson and Dikinson, 1982; Boynton and Zmud, 1984; Asker, 1984; Hill and Jones, 1989; Peng, 2005). It further defined the KSF of leisure agricultural areas of international tourism levels as follows: KSF is the key competitive advantages of leisure agricultural area when facing the change of industry environment to develop an industry meeting the international tourism levels. 2. Literatures on tourism competitiveness The focuses of tourism competitiveness included a selection of tourism destinations (Tasi and Wang,1998; Martin and Witt,1988; You, 1999), and an evaluation on overall national tourism competitiveness (Chang, 1997; Shen and Tsai, 2001; Shen and Hsieh, 2002). The analytical methods included Multiple Criteria Decision Evaluation Model, DEA, consumer demand model, regression model, and AHP. The variables are as listed in the following: (1) acquisition of attraction: person-time of visitors, tourism service quality, and tourism foreign exchange profits; (2) service obtainment: numbers of available beds in hotels, convenient international fights, tourist person-time of major airlines; (3)loading, relative exchange rates, relative prices, inflation, average exchange index, international traveling cost, domestic traveling costs, and living expense level; (4) positive market image: living quality, reflection of realistic national image; (5) peace and stability: sense of security and properties, serious social crime rate; (6) cultural connection: acceptance levels of foreign cultures, cultural openness, and equal treatment of visitors. Thus, this study treated international tourism competitiveness of leisure agricultural areas as one of the principal evaluation constructs of the operation and management of international tourism levels. 3. Literatures on core resources of leisure agriculture (1) Literatures on core resources A resource-based theory was initially proposed by Wernerfelt (1984), who suggested that from the perspective of strategic decision-making, product should replace resource, and the strategies should be utilized based on the analysis of internal resources, in order to find the best usage for the resources, establish corporate competitiveness, and develop the fittest operational strategies based on the core recourse advantages. Grant (1991) proposed the strategic analysis framework of resources-specialty-competitive advantages-strategy- resources, and suggested confirming, classifying, evaluating, and comparing the resources, in order to determine the fittest usage and construct specialties and resource advantages on the basis of resources. The competitive strategies of companies are the efficient utilization of resources and specialties to establish core competitiveness and create competitive advantages. Thus, this study defined core resources of leisure farms as the rare, exclusive, and unique assets and abilities of leisure farms to create and maintain their competitive advantages. This study treated core resources competitiveness of leisure agricultural areas as one of the principal evaluation constructs in the operation and management of those with international tourism levels. (2) Evaluation items for identifying core resources of leisure agriculture Fang(1997) chose Shangrila Leisure Farm and Cown Ranch, both in central Taiwan, as the targets for study. The findings demonstrated that the key success factors were land, capital, natural resources, economic network, service

quality, leadership, pioneering spirit, and operational style. The leisure farms had different core resources, of different importance. Chen(2004), Wang and He (1997) suggested that the KSF of leisure agriculture and fishery areas referred to the uniqueness of rural landscape, low traffic, rich agricultural resources, traffic convenience in the area, food service, and complete public facilities. Wu (2002) indicated that the KSF of private hostels included location, natural resources, economic network, brand reputation, agricultural resources, operational style, and operational and managerial ability. The private hostels offering a variety of core resources and assets were more important than specialties. The importance levels were also different. 4. Literatures on industry competitive advantages (1) Theory of industry competitive advantages and strategic alliance In the theory of industry competitiveness, Michael E.P. suggested that five force models would be influenced by the overall economic environment such as demographic, social, political, legal, and technological conditions (1999). Cheng (2005) indicated that the output of competitive advantages in domestic markets should include five factors: 1) segmentation of market demand structures, 2) selected clients, 3) expected demands, 4) numbers of current and potential client, and 5) growth of internal demand market. Cheng further suggested that agricultural landscape and local culture revealed a high level of characteristics and competitiveness. Ecological tourism could be the future target of global attention and intentions for ecological traveling. According to the value chains, strategic alliance included R&D, production, and marketing alliances. The formation of any strategic alliances should be based on an organizational ecological system, which is formed upon interactions between members and the environment. With international competition and rapid technology changes, companies in the ecological system could not stand alone, they must cooperate with each other to develop and merge collectively through discussion, vision sharing, and alliance (Richard L. D., 2003). Thus, cooperative competition and strategic alliances are a part of the organizational ecological system. In sum, leisure agriculture managers should enhance their management abilities and resources, and form cooperative relationship and strategic alliance with different industries, in order to increase their competitive advantages. They can form strategic alliances with high-tech companies, biotechnology companies, international agricultural tourism institutions, and educational organizaiton. Thus, this study treated organizational operation integration and market development potential as the evaluation constructs of leisure agricultural areas. (2) Evaluation items of management strategy of leisure agriculture Based on the original strategies of the farms in the case study, Cheng (1998) analyzed the managers visions, strategies, ambition, social responsibilities to the farms, external environments, and internal resources, in order to construct corporate operational strategies. The evaluation items included products, tourist services, sales, marketing, promotions, brands, local educational units, leisure facilities, leisure environment, license, planning and design, product positioning, core specialty, core resources, and land ownership as the base for future related studies. However, Cheng did not probe into information management and organizational operations of the farms. Chen (2003) used leisure agriculture and fishery area plans from Meishan Township, Chiayi County as an example, and evaluated high-ranking support, organizational management, personnel ability, funds, brand marketing ability, private resource involvement, and tour guides ability. This evaluation model only targeted on the strategic alliance of leisure agriculture and fishery areas, as well as organizational operations and strategies, but did not focus on the core resources and information management. RESEARCH DESIGN AND METHOD 1. Research constructs Past studies have suggested different views on international competitiveness and related factors. This paper cites the definition of international competitiveness, as suggested by the World Economic Forum: international competitiveness is the ability of one nation or company, which can produce more fortunes, compared with their rivals, in the global market. Chang (1997) defined tourism competitiveness as follows: comparing with other nations, this

country has advantages to attract foreign visitors. Thus, this study defined international tourism level as follows: the competitive advantages of one nation, comparing with other countries, to attract foreign visitors. This paper aimed to integrate literature review, indices of international tourism competitiveness, tourism quality concluded in the meeting of the Doubling Tourist Arrivals Plan of the Tourism Bureau (Lou and Lan, 2005), and evaluation indices of leisure agricultural areas from 2006 and 2007, in order to probe into the related indices of leisure agricultural areas with international tourism levels. The evaluation constructs and items for the development of leisure agricultural areas with international tourism levels are as follows: (1) Competitiveness of core resources: evaluation items include agriculture resource applications, resource diversity, resource uniqueness, local festivals, overall characteristics, and product originality and development. (2) International tourism competitiveness: acceptance levels of foreign cultures, domestic living quality, consumer price fluctuation, average exchange index, and the public s sense of security and properties. (3) Customer value creation: service approachability, product experience, completeness of the service facilities, reasonable prices, brand reputation, and transaction convenience. (4) Tourism quality: traffic and signal systems, tour guides explanations, surrounding characteristics, tourism conveniences, facility maintenance and management, environmental protection, conservation, and crisis management. (5) Organizational operation integration: tourism construction, collective discussion force, regional rules, community and neighbor tourism resources, vision planning abilities, and community participation. (6) Market development potential: market segmentation and positioning, operational and management systems, international institution alliances, cooperation with domestic groups, ability to produce profits, and traffic approachability. This paper will analyze relative weights of different constructs by AHP and Fuzzy Theory. 2. Fuzzy AHP questionnaire design This study first constructed the evaluation factors and analytical hierarchical framework. The questionnaire design was based on reorganization of the variables, as suggested by related literatures and scholars findings, as shown in Figure 1, which included 6 constructs and 35 sub-constructs. The linguistic variables (i.e. extremely important to relatively important) in questionnaire design involved fuzzy concepts, which were represented by fuzzy numbers (Zadeh,1965). Thus, this study applied the fuzzy set theory and indicated the decision makers evaluations by linguistic variables to acquire the weights of the attributes. In other words, this study systematically transformed the decision makers linguistic variables according to the fuzzy linguistic scale (Chen and Hwang,1992). 3. Analysis of returned questionnaires (1) Statistics of returned questionnaires After modifying the evaluation indices and constructs based on experts opinions, this study distributed 5 questionnaires to government, with 3 returns, 4 questionnaires to academia, with 3 returns, and 5 questionnaires to industrial circles, with 4 returns. There were 14 questionnaires distributed with 10 returns, for a return rate of 71.43%. (2) Consistency validation After analysis, this study eliminated two invalid returns from the industrial circles and the government, which affected the overall consistency. The consistency rate (CR) of the 10 valid questionnaires on KSF for the construction of leisure agricultural areas with international tourism levels in overall constructs and core resources competitiveness, international tourism competitiveness, creation of customer value, tourism quality, organizational operation integration, and market development potential of the principal constructs, were less than 0.1, which indicated that the evaluation on the constructs of 10 expert survey reached an acceptable consistency level.

EMPIRICAL ANALYSIS AND RESULTS Analysis on relative weights of the indices upon the development of leisure agricultural areas with international tourism levels (1) Analytical results for the weights of the principal evaluation indices This study analyzes the fuzzy weights of 6 evaluation constructs upon the development of leisure agricultural areas with international tourism levels. According to Table 6, the weight of core resources competitiveness is the highest, indicating that the key success factors of leisure agricultural areas with international tourism levels refers to the diversity of the resources and the creativity of the developments. The weight of customer value creation is the lowest, which shows a lack in the ability of leisure agricultural areas to create additional customer value. (2) Analytical results of the weights of sub-evaluation indices The sub-constructs were further analyzed, and the relative weight and consistency levels were analyzed by Expert Choice2000. The relative weights acquired are as shown in Table 6. Evaluation constructs Competitiveness of core resources International Tourism competitiveness Customer value creation Tourism quality 0.18367 Organizational operation integration Market development potential Table 6: Fuzzy weight distribution of questionnaire evaluation constructs and items Fuzzy Fuzzy Total fuzzy Fuzzy Evaluation items weight weight weight weight*100 Sequence (1) Agriculture resource application 0.216 0.0540 5.4012 1 (2) Resource diversity 0.146 0.0364 3.6369 9 0.24967 (3) Resource uniqueness 0.169 0.0423 4.2277 5 (4) Festivals 0.089 0.0223 2.2304 21 (5) Overall characteristics 0.195 0.0487 4.8686 2 (6) Product originality and development 0.184 0.0460 4.6023 3 (1) Acceptance levels of foreign cultures 0.247 0.0333 3.3300 12 (2) Domestic living quality 0.207 0.0280 2.7990 17 (3) Consumer price fluctuation 0.138 0.0186 1.8630 27 0.13533 (4) Average exchange index 0.141 0.0190 1.9035 25 (5) Sense of security on themselves and properties 0.267 0.0360 3.6045 10 (1) Service approachability 0.201 0.0243 2.4281 19 (2) Product experience 0.183 0.0221 2.2143 22 (3) Completeness of the service facilities 0.138 0.0167 1.6738 31 0.12133 (4) Reasonable prices 0.191 0.0232 2.3151 20 (5) Brand reputation 0.157 0.0190 1.8997 26 (6) Transaction convenience 0.130 0.0157 1.5690 33 0.15733 (1) Traffic and signal system 0.222 0.0408 4.0848 7 (2) Tour guides explanation 0.185 0.0341 3.4101 11 (3) Surrounding characteristics 0.167 0.0308 3.0789 16 (4) Tourism convenience 0.097 0.0178 1.7787 29 (5) Facility maintenance and management 0.100 0.0184 1.8400 28 (6) Environmental protection, conservation and crisis management 0.229 0.0422 4.2197 6 (1) Tourism construction 0.212 0.0333 3.3284 13 (2) Collective discussion force 0.212 0.0332 3.3232 14 (3) Regional rules 0.108 0.0169 1.6904 30 (4) Community and neighbor tourism resource 0.105 0.0164 1.6433 32 (5) Vision planning ability 0.131 0.0206 2.0619 57 (6) Community participation 0.232 0.0365 3.6476 8 (1) Market segmentation and positioning 0.295 0.0448 4.4789 4 0.15167 (2) Operation and management system 0.208 0.0316 3.1616 15 (3) International institution alliance 0.090 0.0137 1.3731 35

Source: This study. (4) Cooperation with domestic groups 0.098 0.0148 1.4845 34 (5) Ability to make profits 0.139 0.0212 2.1179 23 (6) Traffic approachability 0.170 0.0258 2.5789 18 The number of key success factors is varied, and definitions are different according to the different industries. In most industries, there are 3 to 6 success factors (Daniedl,1961). According to the distribution of the weights in Table 13 and Figure 1, the scores of the first 7 factors of the combination analysis are much greater than those of other factors. Thus, this study selects the first 7 factors with the highest weights as the KSF on the development of leisure agricultural areas with international tourism levels. The meanings of the factors are as follows: (1) Agricultural resource application: leisure agriculture aims to fully exploit rural resources, boost the development of villages, increase farmers profits, and upgrade local tourism quality. Since the rural environment involves local characteristics, which can satisfy the public s demand for various activities, there is a close relationship between agricultural resources and leisure agriculture (Chen, 2006), such as agricultural experience, farming studying, and rural festivals. Leisure agricultural areas can apply the unique resources to leisure activities to display local features, in order to achieve diversity, delicacy, and uniqueness, thus enabling sustainable operations and developments. (2) Overall characteristics: leisure agricultural areas can integrate tourist attractions in the same region by serial trip and planning a smooth itinerary to avoid heavy time consumption. The signage on major roads can also be highlighted. Set trips, bus tours, information service stations, and Internet and telephone systems can allow international tourists to have a more exquisite and richer leisure experience, thus producing great consumer satisfaction (3) Product originality and development: creative industry incorporates the industry of need as well as the industry of desire. Creative industry relies on local products to delivery the beauty of culture, art, and life. The ultimate goal is to cultivate humanity and comfort for the public, which when consumed, satisfies the desires of the consumers (Cheng, 2007). Thus, leisure agricultural areas with international tourism levels should try to create the blueprint of desire under demand of international tourists, and target the industry of in-depth desire to create future leisure agricultures that promote Taiwan leisure agriculture constructs to the globe. (4) Market segmentation and positioning: agricultural areas should provide information that will attract international tourists and differentiate their features. When developing leisure agriculture, the operators should also be creative (such as water festival in Thailand and Tomato Fight in Spain), and become involved. What are possible festivals of leisure agriculture in Taiwan? They should be developed based on local culture, living styles, and customs, and highlight the best local agricultural operations, which include explanation of services, guides, experiences, and local cultural activities. Thus, only by maintaining local characteristics and applying local traditions, cultures, landscapes and natural resources, could a sustainable leisure agriculture be developed. (5) Resource uniqueness: leisure agriculture resources include five categories, which can be fully developed. Most importantly, localism should be developed, instead of imitating foreign impressions, as the KSF of leisure agricultural areas. Local cultural resources can be the base of uniqueness of all areas. (6) Environmental protection, conservation and crisis management: with industrialization and urbanization, farms are continuously changed instead of being improved, which will lead to negative results. Thus, one of the principles of leisure agriculture refers to ecological conservation of natural environment. Environmental protection is one of the inherit functions of leisure agriculture. With resource conservation, active improvement of environmental sanitation, upgrading of environmental quality and maintenance for natural landscapes and ecology, and their inhabitants, such as birds, insects, and wild animals will have a nurturing habitat. Also, tourists can experience diversity and symbiosis with the nature. Security is a significant factor influencing the international tourists intention to visit a new country, and also affects the peace and stability of the nation. This aspect is one of the important concerns to foreign visitors (Shen and Tsai, 2001). Thus, reinforcement of security in leisure agricultural areas can help tourists avoiding danger when visiting the leisure agricultural areas. (7) Traffic and signal systems: the government has recently begun actively developing leisure agricultural areas with international tourism characteristics to attract international tourists through cooperation with current international

tourism channels. However, for foreign tourists, signs, signals, and transportation system in Taiwan are unclear. Service personnel and local residents can guide international visitors with bilingual signs, and assist foreign visitors (translations and concern for their needs) as well as possible, in the visitors native language, which is an excellent way to develop international tourism levels. Regarding traveling and tour buses, Taiwan Highspeed Rail can be integrated with local tourist buses throughout Taiwan for ease of travel for foreign visitors. Air Bus Co. in Taipei City and Yilan Bus in Yilan County, which are operated separately, should cooperate to construct convenient tourism routes for visitor travel/tour itineraries. CONCLUSIONS This study attempted to construct evaluation criteria on core resources and competitive advantages to determine the key success factors of leisure agricultural areas with international tourism levels, as a reference for the government and the association of leisure agricultural area groups. In addition, this study probed into managerial reference and definitions. According to the research findings, the development of leisure agricultural areas with international tourism levels should be based on agriculture resource applications, overall characteristics, product originality and development, market segmentation and positioning, resource uniqueness, environmental protection, conservation and crisis management, and traffic and signal systems. In other words, three key factors (core resources, environmental conservation, and traffic quality in leisure agricultural areas) should be strengthened. There are many diverse and cultural rich natural resources in Taiwan and the Taiwanese should create and display their unique art and aesthetics of local culture and natural resources. Thus, unique cultural characteristics and their innovative applications will significantly impress international tourists. Leisure agricultural areas in Taiwan can highlight their value through these innovative uses of local resources, and thus construct resource uniqueness. The most significant differences between leisure agriculture and regular tourism industries is that the former is based on local agricultural industry and rural resources to provide the leisure functions (Hsiao, 1991), highlighting the flavor of unique experiences. Thus, segmentation of tourism markets is required; otherwise, leisure agriculture may become equal to other types of tourism products due to lack of uniqueness of local development. Leisure agriculture should be operated by focusing on the Taiwan imageries to improve the position of leisure agricultural areas, which include potential natural developments of local differences, and are not simply created. The uniqueness and difference are inherit advantages of such products. Therefore, leisure agriculture should target local natural and cultural resources, which become the main factors of differentiation strategy development (Chuang Shu-Tzu, 2001). Thus, the positioning of leisure agricultural areas, and constructions to highlight these differences, are key strategies of international tourism levels in leisure agriculture. Based on the above, leisure agricultural areas in Taiwan should increase their diversity and added-value through R&D and innovative creativity, which further integrates organizational abilities to expand marketing channels and introduce Taiwan s leisure agriculture to the world. Therefore, innovation and development in leisure agricultural areas are key success factors for future operations. With the rise of environmental conservation consciousness and the concept of sustainable development, the conservation of ecological resources in leisure agricultural areas are increasing in value. In order to attract foreign tourists, these areas must actively improve the environmental sanitation, increase environmental quality, maintain natural ecology, and allow foreign visitors to recognize and appreciate the importance of environmental protection and ecological conservation by the education and explanation. Thus, the role of leisure agriculture in environmental protection and conservation is highly critical. However, security management for international tourists remains a key issue to develop leisure agricultural areas with international tourism levels. After internationalization, eco-friendly traffic convenience in leisure agricultural areas of Taiwan will be one of the primary concerns of foreign tourists. Traffic quality of these areas includes two aspects: 1) facilities: the comfort of roads and transportation, and it relies on improved assistance of government and the capabilities of the tourism companies; the quality and security of facilities of buses in Taiwan are more valued; 2) intangible values: the travel

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