Will specialization beat generalization?

A sort of summary:  At the end of the day, in this post I want to highlight …

1) In all sectors usually it’s better first generic and then specialized, BUT in tourism as I try to prove here is just the other way around!

2) In all sectors (and Social Networking Sites, E-commerce Sites, Search Engines… are a good case in point) in order to grow you have to diversify your business model. That means go to other sectors.

3) Tourism sector is seen as an interesting sector to diversify (I absolutely agree!!!) BUT remember first specialized then generic.

But Jordi! This is not an easy thing. I absolutely agree, again. For this reason you will need… Touristologists!!!

Ready? Steady? GOOOO!!!

A few weeks ago I read this article.  Do you agree with this summary?  “Facebook will be the generic Social Networking Site (SnS), specialized ones will appear and they will win most of the market share” It sounds very similar to Tourism from my point of view!!!

The other day I talked about first specialized then generic. That makes sense to me in the tourism sector as I strongly try to prove, but usually it’s the other way around in other sectors where the generic way is a better beginning.

I believe that Social Networking Sites (SnS) it’s an interesting case in point. In order to win usually you have to go to the generic market and then the ones that through specialization of your services that offer the same to specific segments will appear.

I don’t know if this is the beginning of the end of Facebook (I doubt it!) but it seems that is the beginning of the end of Facebook as THE 360Kg gorilla in the Social Networking Sites’s jungle!

So, if Facebook becomes the great generic SnS and other success building specialized ones, in order to grow Facebook will has to rely on diversification, adding different business model to the one that it has now...

“I-know-what-you-like-so-I-send-customized-and-recommended-by-your-friends-information-and-commerce”.

A possible diversification is in the field of tourism.

Be sure, that you don’t get the same mistakes as Baidu (the equivalent to Google in China). The fact of being a number one in a field it doesn’t mean that you are able to go to any other field and become a winner. You can learn a little bit more about Baidu’s problems here and here here.

To make a long story short (what? You never read the articles that I recommend and only read my summaries. I can’t believe it!!!) Baidu tried to launch an e-commerce site in a partnership with Rakuten (a Japanese leader in the e-commerce field) it ended up in a failure, one more over other tries outside its core search business.

In a nutshell if you go to a new field be sure to get experts in this field. As Robert Heinlein (one of the three fathers of modern science fiction) said “Always listen to experts. They’ll tell you what can’t be done and why. Then do it!”
What? That now Rakuten wants to go to tourism sector through an online travel agency? Be sure to have the services of any of my Touristologists!!!!

Any of them will advise you…

1) First specialized then generic!!! In this way you will avoid competing with the leader: Ctrip in the case of China.

Curious about Ctrip? Here you can learn more … 

Jordi! Can you provide a video a little more dynamic? Well… I’ll do my best! What about a virtual trip to Shanghai …
 

2) Focus on value not on low price tourist orientated!!!!

When you play in generic tourism (so, with tourist low price orientated) your strategy for growth is to get all the chain of value OR to get economies of scale and get lower prices and higher margins in exchange for a big volume of tourism.

As we saw the other day, when you play in specialized tourism (so, with tourist value orientated) your strategy of growth is to get the trust of this specific segment that want to travel (OR through a trip get what they really want) and then add more and more value, first with your chain of value then becoming their specialized social networking site and search engine. Which one do you want to play? Both are good but be aware of NOT mixing strategies of growing!  

Tourism attracts investors, it is a great provider of employment and it needs specialized minds to set up things properly. Specialized Scientists? YES, TOURISTOLOGISTS!!!