Critical Review of Related Literature Essay

The stinting system is the the method in which a prohibitedlandish produces, distri exactlyes and consumes goods and serve. An scotch system must answer four basic frugal questions that go away direct a nations scotch bodily function (Pride, Hughes and Kapoor, 2010) What goods and function- and how much of each- will be produced? How will these goods and serve be produced? For whom will these goods and operate be produced? Who owns and who controls the major factors of production? Four types of economic systems puzzle been formulated and implemented byout benignant history.These ar traditional miserliness, mastery miserliness, capitalist/free scrimping and mixed parsimoniousness. Traditional parsimony is found on culture, tradition and rituals. This type of thriftiness, which developed gradually characterized by remit productivity and low rising capital- sedulousness ratios, usually consist of agribusiness ground societies (Mokyr, 1989). Command economies ar economies in which the judicature owns and controls major factors of production. Also cal take centrally inventned economic system, the government decides on all issues regarding labor, mode of production and what goods and services to produce.Socialist and communist societies atomic number 18 examples of command economies. However, most pop offers of these forms of government substantialized that although it was based on the principle of e woodland, the system was inefficient lede to shortages or surplus of products which usually resulted in political unrest (Taylor, 2007). capitalistic economic system is a system wherein single(a)s and private enterpascents own and insure the major factors of production. ground on the lassiez-faire theories of Adam Smith in which individuals atomic number 18 give the freedom to utilize resources as they deem fit.The role of the government is limited to regulation and creating economic rules. This system promotes competition and hurts of goods and services are determined by the mechanisms of supply and demand (Pride et. al. 2010). The last type of economy is the mixed economy wherein the vantages of capitalism or free marketplace economy is combined with some of the principles of a command economy. In this economic form, goods and services are step ind betwixt households and firms.The government, on the other hand static regulates and imposes rules, further ian important responsibility of it is to collect taxes from business owners and its citizens, which will change to to a fault try goods and services much(prenominal) as education, infrastructure and protection (Pride et. al. , 2010). In this scene, the market (producers of goods) answer the wants while the government provides the need. stinting Shift These economic systems tolerate created economic shifts that determined the primary products of that economic era and the modes of production.In the traditional economies, agriculture was the principal(prenominal) form of patience. In fact, economists estimate that the British economy in 1760 was comprised of almost 90% agriculture industries (Mokyr, 1989). However, the advent of the Industrial revolution changed the economic landscape from agriculture to industrial. The opening of machines, technological innovations and assembly lines in to the modes of production shifted the economy form producing unpolished products to manufactured products. Post-World War Two and increasing globalization would witness some other global economic shift.Again, engine room played key role in the rise of service economies. Service economies are not directly sedulous in manufacturing but is involved in the provision of human respect affixed in the form of labour, advice, managerial skill, cheer, training, intermediation and the like (OECD, 2000). The rapid discipline of information and communication (ICT) technologies fox allowed companies to tap on the knowledge and sharp prop erties of economies packaging them as a distinct economic output.This form of economy has bled into divers(prenominal) industry sectors such as ICTs and healthcare, as companies are pressured to brook on core competencies, reduce costs, exploit external, specialized expertise, giving rise to business extremity outsourcing companies. This has en equald foreign companies to tap into other foreign countries labor providing much needed jobs especially for developing countries. The shifting of economies, the increment of technology and the success of mass production has led to the commodification of products and services.This has stripped away the personalization of products and services, mutating races into an exchange relation or as Karl Marx (1978) called it callous cash honorarium. pine tree and Gilto a greater extent (1999), point out that although commodification has led to cost-savings, it no longer breeds growth and profitability. Thus, they dampen that there is another as pect of economy that has not fully been explored and tapped by businesses. They labelled this refreshing approach as the start out economy. Companies that identify sire as a distinct economic output are given new horizons to expand their businesses.Experience= Economic Output The concept of an live economy is rooted in the principles of creating sensations among the consumer and the product creating memorable loves ( ache and Gil more, 1999). This economic strategy engages the customer, customizing products and services agree to their needs and wants, turning the them into not serious passive users of products but as important factors in the cosmea and market of the product. hanker and Gilmore (1999) refer to the cocoa bean as a perfect example of the substance of have got as an economic output.The cocoa bean is a commodity that if manufactured and sold as a good in a grocery sees a jump of surrounded by 5-10 percent in ts price from a raw commodity to a manufactur ed and packaged good. However, when a cup of coffee is sold in cafes and coffee shops, its effectively jumps to 100-300% percent of its raw price and people are still willing to pay for it? Why? yen and Gilmore attribute this willingness to the induce factor that cafes and coffee shops add to the cup of coffee. The added run through of an ambiance of comfort, relaxation and expiation effectively raises the flier of the cup of coffee.And yet, customers are willing to pay for that expensive cup of coffee because the drinking of bingle is no longer concentrate on the coffee itself (although the quality of the product still has the biggest percentage in the mirth criteria) but on the whole sire of drinking it. Experience itself is not a new concept, but economists and producers of goods have , in the medieval, attached it to the delivery of services that its causality is largely unappreciated and tapped (p. 2). However, Pine and Gilmore (1999) reiterate that produces are as distinct from services as services are from goods (p.3). When a person buys a service, he purchases a set of intangible activities carried out on his behalf. But when a buys an draw, he pays to spend time enjoying a series of memorable events that a company stages-as in a internal representation play- to engage him in a personal way. (p. 2) It is through this concept of a theatre and stage that the authors initially frame the concept of pay back economy. The consumers are the actors in theatres, stages and plays which are prepared, scripted and planned by companies.Thus, for the witness to be truly credible and believable, manufacturers and suppliers must change their perspective from only providers to stagers of events. Customers and clients are no longer trip uped as just but are handle as guests. The stagers of events must therefore be flexible, ready to adapt to the demands of their guests. This relationship between the stager and guest is much more deeper than the callo us payment of cash referred to by Marx (1978) but actually creates a relationship between both parties building on trust and quality service.Although incur economy have primarily been associated with the entertainment industry, with the efforts of motive parks and movies to deliver practical and truly interactive attractions through the use of 3D technology, surround lowering and, in the human face of Walt Disney theme parks, productions that immerse the sights, chokes, tastes, aromas and textures of their guests (Gilmore and Pine, p. 3). However, other industries have taken notice of this approach. Service industries such as restaurants are investing on ambiance and in services that engage all the sensations of their guests to create unequalled dining have a go at its.IT companies are racing to create much more efficacious processors to create ICT experiences that are interactive and life-like (Grove, 1996). It has also been adapted by set lots, department stores, applia nce repairmen, and increasingly by businesses themselves to create much more dynamic and productive progress toplaces by bringing employees and the products closer. Evidently, the experience economy has beseem a philosophy for companies that seek to distinguish themselves from the competition.In this light, what industries have been greatly transformed by this philosophy? What strategies did they create in order to provide their guests with unique experiences? Did the adoption of this philosophy bring approximately positive do? Or did it further lead to consumer alienation? This paper will sweat to answer these questions by reviewing slips of experience upshots and provide a picture of the effect of this strategies. A critique of the philosophy will attempt to reveal its strengths, weaknesses and limitations when utilise in the real world.Review of Related Literature The Cruise place Experience A doctoral dissertation memorize by Hosany and Witham (2009) chargeed on the sailrs experiences and analyzed the relationships between tourists experiences and personal evaluation of satisfaction and feedback. Based on the conceptualization of tourism experiences by Oh, Fiore and Jeoung (2007), the count hoped to contribute on the existential concept of tourism by enhancing its theoretical progress and march on important hints for cruise markets (Hosany and Witham, 2009).Oh, Fiore and Jeoung (2007) conduced a study that seek to provide experimental evidences of the experience economy as posited by Pine and Gilmore (1999). Using the shot of a Bed and Breakfast Inn, which has been identified as highly experiential in nature (McIntosh and Siggs, 2005), guests were asked to beatnik their lodging experiences. Utilizing a rigorous and methodologically sound approach to scale development, Oh et. al.(2007) were able to create a sound and sensible scale which metrical tourism experiences. The main objective of Hosany and Whithams study therefore was to val idate the measure developed by Oh et. al. (2007) by applying it to the scope of cruise tourism. This main objective was supported by devil specific objectives to identify the underlying dimensions of prowl cars experiences to investigate the relationship between cruisers experiences, satisfaction and use to recommendThe study chose to examine the cruiser experience since these trips offered bestow escape, safe transportation to exotic destinations, Vegas style entertainment, luxurious pampering service, quality nutrition and beverage, innovative onboard features and awe-inspiring aesthetics among others (p. 5). Cruise vacations are elect because of their promise of luxurious care and entertainment (Cartwright and Baird, 1999) and are laden with experiential benefits that engage tourists in a unique social experience (Kwortnik, 2006). Employing persuasion method, the Oh et. al.(2007) tourism experience scale was reworked in order to apply to the context of the study. Variabl es such as cruisers experience, memory, arousal, general perceived quality, intention to recommend and satisfaction were measured along with other variable of engross such as demographic variables that included gender, age, travel companion, number of past cruises taken, and nationality. The four dimensions of experience education, entertainment, aesthetics and escapism were represented with four statements and were rated exploitation a 7-point scale ranging from 1 strongly disagree to 7 strongly agree.Variables such as arousal and memories about the cruise experience were also measured employ 7-point scales. Overall perceived quality and overall satisfaction were assessed through cardinal items each (poor/excellent and inferior/superior, and extremely dis convenient/extremely satisfied and terrible/delighted respectively). Finally, respondents intention to recommend were measured using the question How likely is it that you would recommend this cruise to family and friends or family members and through a scale of -3 extremely unlikely and +3 extremely likely. entropy collection was done aboard the cruise ship Rhapsody of the Seas which is owned and operated by kinglike Caribbean International Cruise Line. It was achieved by approaching the cruisers less than hour afterward disembarking from the ship and while waiting for their coach transfers. All in all, 169 questionnaires were finish out of the 1859 guests onboard. The study established the validity and generalisability of the Oh et. al. (2007) measure for tourism experience.Data also revealed that the four realms of experience (education, entertainment, aesthetics and escapism) bottom of the inning be apply in the context of cruise experiences and still be proved authoritative and valid. Although the four dimensions varied in their wideness in explaining the variable outcomes of arousal, memory, overall perceived quality, satisfaction and intention to recommend, the results were similar with Oh et. al. (2007) which identified aesthetics as the main factor in experiential outcomes.This also agrees with Kwortniks (2008) conclusions that a ships design and ambient features affect cruisers emotions and conducts. Hosany and Withams (2009) findings on entertainment contradicted Oh et. al. (2007) in that it was found to be the consequence strongest determinant of outcome variables. The study attributes this to the reputation of cruise ships as entertainment havens. Education and escapism dimensions were found to be of little consequence to the cruise ship experience. The study also found out that the four dimensions of cruisers experiences have direct impacts on passengers intention to recommend.Overall, Hosany and Withams study provide tangible and empirical findings that back-up the concept of experience economy posited by Gilmore and Pine (1999). The studys initiative to investigate the concepts application on an industry that has yet to be fully explored but is a perfect riding horse for investigating experience economy is the its great strength. The writings review of the study provides rich, background detail on the concepts of experience economy and other recent studies on the cruise ship industry.However, the stress of the study barely scratched the population of the its main study. The time constraint ( devil weeks) and the focus on only one cruise ship could be seen as the sterling(prenominal) weaknesses of the study. It would have been interesting to see a comparison of experiences between two cruise ships that ply the same cruise route. A want of the effect of cruise ship employee style on the overall experience is an area that should have been investigated but was overlooked.This should have been an important factor for the study since Gilmore and Pine reinforces the richness of the companys interaction in setting the feel for the stage of experience. the study also did not take into tarradiddle the sociological aspect of the crui se, such as the effect of other cruisers behavior on the whole experience. Despite these, the findings of the study that revealed its sterling(prenominal) contribution by proving the validity of Oh et. al. s (2007) tourism measure. This is a freak step for the further investigation of experience economy by providing a reliable test that can be applied in different tourism contexts.Experience saving in the Rural Context Isaac Kwamena Arthurs (2008) paper entitled Conceptualisation of Experience delivery as war-ridden Advantage for Rural Food Industry and Rural development sought to introduce a poser which can be applied to the agrarian food industry in order for it to attain a warring edge in an experience economy. The paper presents evidences that point to the positive implications of experience economy on business profits and community development.Studies have turn out that experience economies add value to rural businesses (Fiore et. al, 2007), its reclaimableness in ind ustries such as tourism (Richard, 2001 Hayes and Macleod, 2006 Oh et,al. 2007), small city development (Lorentzen et. al. , 2007) and its implication on the development of urban sports and recreation settings (Howell, 2005). Despite most experience economists identifying its products as competitive (Lorentzen, 2008) and providing a higher degree of customer satisfaction and profitability (Sims et. al., 2007), they do not present any model or theory to guide firms in maintaining this competitive gain. Thus, Arthurs paper sought to provide a deeper judgement of experience economy through the presentation of strategic approaches that can be adapted by rural food industries to maintain competitive advantage. Guided by the look for question what is the experience economy and what strategic approaches exist for experience producers in the rural food industry to utilize in achieving competitive advantage? (Arthur 2008, p.2), the paper analyzed different views on strategic management c oncepts while adapting on Gilmore and Pine (1999) concept of experience economy. Employing an extensive literature review, Arthur (2008) explores the concepts of experience economy and its applications drawing mostly on the whole caboodle of Gilmore and Pine (1999). he reveal that although earlier authors have identified the concept of experience industries (Toffler 1970, p. 221), it was Gilmore and Pine that indicated a new orientation of experience, which is central to creating events about products (Arthur 2008, p.3). This idea of creating events around products therefore create experiences (such as an educational show on how a product is manufactured) which becomes the package in which products are marketed and sold. In applying the experiential economy concept on rural food industry, Arthur (2008) focused on the two forms of experience realms customers passive or active elaboration and the level of immersion or absorption. These two forms delineate the individuals participat ion in the experience and the bond that is created between the consumer and the experience (Gilmore and Pine 1999, p.30-31). Arthur (2008) then enumerates different examples of experiential economy at work in the rural food industry, such as the local food producers organizing food processing festivals wherein consumers can watch how food products are prepared. For further immersion, Arthur (2008) suggests educational tours that introduce consumers to the inner workings of food processing plants and by back up their participation in some of the processes. The escapist realm of experience can be attained by customers being engaged in the production and processing of their product (Arthur 2008, p.5). He also suggests the creation of theme parks and utilization of venues where consumers can purchase various food products in order to engage the aesthetic realm of experience economy. In discovering a textile for maintaining competitive advantage, Arthur (2008) first defined the paramet ers of competitive advantage. He touch ons Besanko,et. al. (2007) explanation as his basis for identifying competitive advantage as the firms specific abilities to do or achieve things which are superior over their competitors in the market (Arthur 2008, p. 7).Arthur identifies three models which can be utilized to attain competitive advantage in the rural food industry fin Force model, resource-base view, and the relative view. The five force model identifies an industrys profitability (Porter, 1985 Grant, 2002 and Xu et. al. , 2006) and offers an understanding that competition is not merely between competitors but involves the whole process of production and its players. The assignment of these five forces are attributed to Porter (1985, p. 4) threat of new market entrants threat of substitute products or services bargaining power of suppliers bargaining power of buyers rivalry among competitors The resource base view looks at the internal organizational resources and cap abilities to achieve competitive advancement in a selected environment (Douglas and Ryman, 2002). This mannikin looks at how a firms uniqueness can give it an edge against its competitors (Grant, 2002). Various management literatures identify comparative view as the inter-firm relations which gives rise to a firms profitability (Dyer and Singh, 1998 Duschek, 2003 Douglas and Ryman, 2003).It sheds light on the importance of networking in creating competitive advantage. In combination these three models, Arthur (2008) provides a exemplar for rural food industries that builds upon the five force understanding of the prospects of obtaining competitive advantage through experience offerings in the rural food industry, strengthened by the firms identification and utilization of its capabilities and resources match to the resource base view model, and finally, through a seeking out and building of strategic alliances (based on the relational view model) to cement its position in the i ndustry.Although Arthur (2008) was able to identify the contribution and importance of experience economy in different industry sectors,it was not able to provide new insight on the topic. This can be attributed to the methodological analytic thinking adapted by the study and its heavy reliance on the works of Gilmore and Pine (1999). However, it was able to achieve its both its objectives with the discovery of a framework for maintaining competitive advantage in rural food industries by reviewing and combining three strategic management models.This is the study greatest strength since it pioneers initiatives towards the creation of frameworks which cater to the performance of industries in the experience economy. But, its the studys greatest strength is also its biggest pitfall. With the absence of a real data convocation research methodology and reliance on previous works, Arthurs (2008) suggested framework remains a hypothesis and not yet a valid theory as it remains to be tes ted and operationalized within the context of the rural food industry.On a positive note, the author does plan to test his conceptual framework in a empirical case study of the Thisted food industry in Denmark. Exploring the Inner Sanctum of Experience Mark van Doorn of Philips Research presents a fresh look at the concept of experinec economy in his paper entitled An Inside spirit level on the Experience Economy (2006). In this paper, Doorn (2006) explores the concept of experience as a cognitive process that shapes the individuals consumption behavior and answers the need for psychological self-determination and well-being (p.1). An analysis of literature leads Doorn (2006) to cite turners Literary Mind which explains that top understand the mind, one must dwell on the body and the primitive underpinnings of the mind (Doorn 2006, p. 2). Turner gives importance to the story or narrative imaging as the main component of thought, crucial for planning, evaluating, explaining, for re calling the past and imaging the future (Turner 1996, p. 4-5). Turner reveals that the human mind engages in experiences by creating narratives to explain even the simplest of acts (p.13). This follows with Cognitive lore Theories that state that experiences are absorbed by the senses and processed by the mind. Doorn (2006) also explores the concept of ambient narratives wherein individuals are immersed in an interactive experience created from a mixture of virtual and real world concepts which they can change according to their own experiences. Doorns (2006) analysis of experience economy is such a departure from the usual studies on the topic.His paper reveals the connection between economics, psychology and literature by dispelling normal academic notions of experience economy as rooted in the delivery of personalized and highly specialized products and services. He posits that the melding of literature and performance with business and technology can actually lead to a much mo re interactive and effective experiential economy. However, Doorns (2006) analysis only reveals these connections and yet ends up with more questions regarding the creation of a grand unification theory (p. 10) that will answer and describe the cognitive processes of experience economy.Impacts of Experience Most studies undertaken under experience economy seeks to measure the experience, overlooking the impact of experience economy on the parliamentary procedure in general and its effects on tourism. Joanie willet answers this dearth of literature in her study entitled Cornwalls Experience of the Experience Economy Longitudinal impacts (2009). The paper will investigate the impact of experience economy on a selected area by evaluating socio-economic changes which have resulted from regional experience strategies and the impact of experience economy discourses on the area.Cornwall, England will be the case study of regional economies that really heavily on tourism. The paper is stee r by the following objectives Review the Key Tenets of the Experience Economy according to Gilmore and Pine (1999) Discuss experience economy with regards to Cornwall Trace socio-economic changes in Cornwall brought about by experience economy Findings of the study reveal that underneath Cornwalls image as a wealthy tourism destination is a society plagued by severe inequalities and deprivation (p. 10).Government efforts to create an idealised English setting to promote tourism has constrained the economic opportunities in Cornwall. Willet (2009) reveals that efforts to create a unique English experience for tourists have led to sociological impacts detrimental on the Cornish locals. However, Willet (2009) discovers that Gilmore and Pine (1999) provides a provision wherein the personalization of guests experiences require locals to adopt ripe(p) skills and educational assessments which will balance out the detrimental effects of the experiential economy.Willets (2009) study prov ides a holistic picture on the true sociological impacts of the rise of experience economies. This study revealed that the ideals of Gilmore and Pines (1999) of customized services and unique services does not necessarily lead to the development of both the consumer and producer. However, the study would have yielded deeper empirical evidence by employing research methods a such as surveys with both tourists and locales ad interviews with the key players in the Cornwall micro-economy. But overall, Willets study is a cautionary recital that reveals the two-sides of economic ideas.Lise Lycks lecture on Experience Economy as an Instrument to Create Economic Profitability presents the other side of Willets study. Employing case study to describe the hotel economic landscape of Copenhagen and analysis on three frontrunner hotels in Copenhagen, the investigation sought to answer two primary objectives Shall hotels invest in experience economy? and How do find and business cycle develop ment influence decision-making and profitability? The methods revealed that with the construction of the Oresund nosepiece brought a large influx of clients in accommodations for Copenhagen, Denmark and Malmo, Sweden.This led to an expansion in the number of hotels in the Oresund region, totaling to 196 hotels with 19,036 rooms in total. This economic expansion has led to hotels banking on a delivery of unique accommodations through the employment of experience economy. The case study focused on three hotels in circumstance Hotel Fox (formerly Old Park Hotel), Hotel Skt,. Petri and Guldsmeden Hotel. The utilization of unique marketing techniques, innovations in core values and hotel concepts and the focus on consumer behavior have and so turned the hotels adoption of the experience economy into profits and the government activity of new and better images.The case study also revealed that there was a dependency to business cycle development, which guided the creation of a framew ork that was specifically catered to the investment in hotels. This model, when applied to the case studies, rendered useful decision-making insights in the context of experience economy investment projects. This study presents another framework that is useful in the application of experience economy in real world situations.The study was able to demonstrate that through innovative industry practices and a full commitment to the delivery of unique experiences can then yield profits especially for service sectors such as hotel chains. at a time again, this study blurs the attribute between the delivery of service and experience. Is is however bare that in the context of hotels, the delivery services are much more effective and appreciated when packaged as an experiential product. Research proposition The review of related literature revealed the different aspects in which the economics of experience have been investigated.The manner in which experience economy was investigated m irrored an outbound spiral model in which earliest studies focused on the description, distinction and investigation of the experience itself. Studies that focused on these were able to reveal the importance of consumer behavior in influencing the type of experience to be delivered. Most early studies also sought to prove or overthrow the initial principles posited by Gilmore and Pine in their assertion of the experience as a dissolve genre of economic output (Gilmore and Pine, introduction) distinct from services as services are from goods (p. 2).However, recent studies on the topic have led to a widening of horizons, and stepping out from the core of the spiral model of experiential economic research. These studies, such as Willet and Lyke, explore the socio-economic impacts of the real world murder of experience economy. These studies have revealed the positive and negative impacts on businesses and communities, both cautioning and encouraging economic policy-makers and deci sion-makers. Useful data culled from the review of related experience economy literature for the research proposal would be the tourism experience measure of Oh et.al. (2007) discussed and adapted by Hosany and Witham (2009) in their own investigation of cruisers experiences. The study can utilize and adapt this tool in measuring tourist behavior and satisfaction towards siamese connection indigenous tourism products. Although Arthurs study is merely a proposal, its ideas on the local implementation of experience economy and its framework for competitive advantage can be applied on the case study of the Four Seasons hotel and the Rose Garden Hotel.The numerous case studies presented in the review of related literature can provide a useful guide for analyzing the economic viability of experience economy in the context of Thai tourism. Especially of value is the last case study of hotels in Copenhagen which provided a framework and guidelines in the implementation of investment projec ts based on experience economy. The research proposal can then prove or disprove the validity of the framework by applying it to experience economy investment projects in the context of Asian countries. References Taylor, John. (2007). Economics. Boston, MA Houghton Mifflin Company. Mokyr, Joel (ed. ). (1989). The Economics of Industrial Revolution. Lanham, MD Rowman and Littlefield Publishers. Pride, William, Hughes, Robert and Kapoor, Joey. (2010). Business. Mason, OH Cengage Learning. cheek for Economic Co-operation and Development (2000). The Service Economy. Science Technology Industry. OECD. Gilmore, Jim and Pine, Joe. (1999). The Experience Economy Work is Theatre and every Business is a Stage. Aurora, OH Strategic Horizons LLP. Grove, Andrew. (1996). set Speech Comdex computer show. November 18, 1996.