Modularity approach to improve the competitiveness of tourism businesses: Empirical evidence from case studies

Pasquale del Vecchio (Department of Engineering for Innovation, University of Salento, Lecce, Italy)
Giustina Secundo (Department of Engineering for Innovation, University of Salento, Lecce, Italy)
Giuseppina Passiante (Department of Engineering for Innovation, University of Salento, Lecce, Italy)

EuroMed Journal of Business

ISSN: 1450-2194

Publication date: 8 May 2018

Abstract

Purpose

The purpose of this paper is to contribute to the scientific debate on innovation in tourism by focusing on modularity as emerging approach for creating personalized tourism experiences. The focus on modularity has two objectives. The first is to demonstrate that tourism offering can be conceived as bundles of products and services with growing relevance of knowledge; the second is to highlight how its adoption by tourism firms can enhance their competitiveness and contribute to assuring greater involvement of tourists in co-creating travel experiences.

Design/methodology/approach

The study adopts an exploratory approach based on multiple case studies to analyze two innovative tourism companies located in the Apulia region (Southern Italy).

Findings

Categorized as integrators of a wide set of tourist products and services, the cases provide a consistent scenario for deepening understanding of the meaning of modularity in tourism.

Research limitations/implications

The study offers an original contribution in determining the meaning of modularity in the field of knowledge-intensive services by demonstrating that the adoption of a modularity approach in the designing and offering by tourism companies can provide interesting benefits for their competitiveness and the greater satisfaction of customers.

Practical implications

The study offers implications for companies and decision makers involved in delivering more personalized tourism experiences.

Originality/value

Elements of originality can be identified in this contribution to the extension of studies on modularity in the service sector as well as for its strategic contribution at the co-creation of personalized tourism experience.

Keywords

Citation

del Vecchio, P., Secundo, G. and Passiante, G. (2018), "Modularity approach to improve the competitiveness of tourism businesses", EuroMed Journal of Business, Vol. 13 No. 1, pp. 44-59. https://doi.org/10.1108/EMJB-12-2016-0038

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Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited


1. Introduction

The radical changes occurring in the tourism industry during the last decade (Neuhofer et al., 2014) have had tremendous impact on the industry’s configuration. The development of information and communication technology (ICT) has had a considerable effect on tourism organizations, and e-tourism has digitalized almost all of the business processes in the tourism supply chain (Buhalis and Law, 2008). What has changed significantly is that technology has not only become an integral part of tourism but has also altered the way travel is planned (Neuhofer et al., 2014), business is conducted (Ndou, 2011) and tourism services and experiences are created and consumed (Stamboulis and Skayannis, 2003). This has opened up new opportunities and generated fresh challenges and potential in the field.

Aimed at assuring a unique and knowledge-based experience within the territory, in its wider definition, the tourism offering is based on the integration of products and services, arising from a community of local actors directly or indirectly interested in the tourism value chain (Denicolai et al., 2010). As a result, tourism is becoming an industry of great relevance for regions’ socio-economic development.

Although the spread of ICTs has increasingly removed intermediaries in the sector, tourism’s experiential dimension highlights the need to break the journey experience down into single products and services that can be configured according to consumers’ specific needs to assure a positive experience for tourists. This means that tourism offers can be managed as a bundle of different products and services, delivered by multiple businesses, not limited to the tourism industry, but that tourist companies can assemble with the aim of customizing the whole service. Pellegrin-Romeggio and Leszczyńska (2013) consider modularity as an option for responding to these new needs, as it offers flexibility and responsiveness while keeping costs under control.

The literature has largely described the benefits of modularity for achieving mass customization (Duray, 2002; Pine, 1993), mainly in manufacturing, but in tourism, the application of service modularity is a prime strategy for greater personalization of tourist offerings. However, the optimal approach to constructing a modular structure for services requires more research (Dörbecker and Böhmann, 2013) and its application in the tourism field is, to our knowledge, completely unexplored (Del Vecchio, Secundo and Passiante, 2015). Based on the above premise, this study aims to deepen understanding of the meaning of modularity in the tourism industry and to analyze how tourism companies can adopt it for innovating and making their value proposition more competitive by involving tourists in the co-creation of their journeys. With these purposes in mind, we adopt a qualitative research methodology based on two exploratory case studies of innovative companies located in the Apulia region (Southern Italy) and operating in the tourism industry as integrators of different categories of regional products and services. Findings highlight the implications of modularity in tourism in terms of the roles and responsibilities of different value chain members (e.g. suppliers and customers), their interfaces (connection points) and the way of developing services and managing the heterogeneity (variability) characterizing these members.

The rest of the paper is structured as follows: Section 2 presents the literature about tourism as a knowledge-intensive business service (KIBS) and modularity approach for Tourism; Section 3 discusses the methodology adopted in the study; Section 4 presents a description of the two cases discussed in Section 5. Finally, conclusions and implications for theory and practice are presented in Section 6.

2. Literature review

2.1 Tourism as a KIBS

The knowledge-intensive configuration of the current social and economic scenario (Romano et al., 2014; Antonelli, 2000) requires competition between individuals, organizations and also territories, making them increasingly dependent on their capacity to acquire, manage and maintain their internal and external knowledge assets (Schiuma and Lerro, 2010; Toivonen et al., 2008).

Tourism, as a personal experience resulting from a visit to a certain place, can be interpreted as composed of a growing number of services and products characterized by the increasing relevance of knowledge (Del Vecchio, Ndou and Passiante, 2015). Recently, researchers and scholars have started to investigate the factors enabling tourism as a service-based (Page and Connell, 2009), and knowledge-intensive industry (Buhalis and Law, 2008). Furthermore, the integration of tangible and intangible elements within a whole regional tourism offering makes the area of great interest to researchers in the field of service-dominant logic, offering opportunities for rethinking traditional conceptualizations and theories (Spring and Araujo, 2008) and implications for the configuration of tourism as KIBS).

KIBS are characterized by knowledge-intensive flows and customers’ involvement in the process of the design and production of services (Miozzo and Grimshaw, 2005; O’Farrell and Moffat, 1991). For this process to be effective, continuous dialogue is required between the demand and supply sides of services; this marks tourism as a clear representation of a KIBS.

Further evidence of the relevance of tourism within the scientific debate on service science can be identified in the work of Page and Connell (2009), who refer to tourism as a complex socio-economic phenomenon increasingly configurable as a “service sector.” All this recalls the need for identifying methodologies and tools for the effective management of tourist businesses. This is why in this study we focus on modularity as consolidated approach for managing complex, knowledge-intensive outputs, recently proposed in services sectors.

2.2 Modularity in service: trends and perspectives

There is no one universal definition of modularity (Gershenson et al., 2003). Pine (1993) argues that modularity is the key to attaining mass customization by breaking down modules, enabling the configuration of different products and services. The focus on services as a field of relevance in applying modularity is more recent; only one of the articles dealing with service modularity was published before 2008 (Bask et al., 2011). The first example of service modularity can be identified in the literature and practice related to the software industry (Bask et al., 2011). Modularity in services is described as a strategic answer to the need to guarantee flexibility and high responsiveness to customers by a company looking for excellence (Bask et al., 2011). The authors thus defined a holistic framework that combines modularity and customization consisting of three main dimensions: service offering, service production and production network. Specifically, service offering relates to the extent of customizing the experience; the depth of involvement represents the measurement of service production. Ultimately, the service production network dimension measures the level of responsibility of suppliers and the degree of customization dedicated to the relationships with them (Bask et al., 2011).

Duray (2002) have developed a framework to combine modularity types, varying across the production cycle (high or low) and customization level (high or low) depending on customer involvement in production. Based on the combination of different degrees of modularity (high-low) and customization (high-low), Bask et al. (2011) extend the perspective of Duray (2002) to services by deriving four categories of offerings as summarized in Table I.

A challengeable aspect of applying modularity in services concerns the opportunity that it can offer in terms of a more personalized customer experience (Brax and Toivonen, 2000; Rahikka et al., 2011). From such a perspective, users can participate as innovators of their own products and services, as highlighted by a wide set of literature (Prahalad and Ramaswamy, 2013; Sawhney et al., 2005).

Tourism offering is configurable as the result of production networks, populated by suppliers responsible for the modules they provide, characterized by a flexible structure, adopting behavior suitable to satisfy a changeable demand (Voss and Hsuan, 2009). The concept of modularity has been identified in the literature as an attribute of complex systems with dual yet opposite goals: reducing the interdependences between modules on one hand and maximizing the interdependences within them on the other (Campagnolo and Camuffo, 2010) to obtain new configurations (Baldwin and Clark, 1997; Langlois, 1992).

While there is a consolidated body of literature on the benefits of modularity in manufacturing (Spring and Araujo, 2008), the implications of modularity in services remain underexplored (Brax and Toivonen, 2000). Due to the systemic nature of services (Brax and Toivonen, 2000), modularity can be adopted as a suitable approach to innovate tourism by leveraging the contributions of different actors to innovate (Del Vecchio, Ndou and Passiante, 2015; Del Vecchio, Secundo and Passiante, 2015).

2.3 Modularity in the tourism industry: creating personalized experiences

The notion of a service production network associated with modularity in services, as previously described (Bask et al., 2011), is significant for deepening the opportunities for innovation emerging from tourist companies called to compete by integrating the products and services provided by a larger community of stakeholders. This is because the journey experience in a certain destination is based on an integrated system of services and products, also identifiable as modules. In contrast to the mass customization process allowed in manufacturing, applying modularity in composing an integrated tourist package of products and services is a guarantee of greater personalization. This recalls the modular customized dimension described by Bask et al. (2011). In their work, this perspective is characterized by a large number of alternative solutions available for customers resulting from the mixing, matching and bundling of standard and customized modules.

The overall configuration of a journey and tourist package is subject to time and financial constraints, which will have an impact on the number of services and products in which tourists are interested. Tourists will look for different kinds of vacation depending on the duration of the visit, from one day to a weekend, or from one to many weeks, but in all cases, they will expect to be satisfied with the return on the money they spend. This means that the tourism offering, in satisfying the request for personalized experience according to specific limits on timing and expenses, can be broken down into several modules (Figure 1).

The process of empowering tourists enables them to find out about the destination before they visit it, to compare easily the different offerings available, etc. The service architecture has the most important role in defining the degree of service modularity, as it determines the limits and design of services and processes. The service architecture makes it possible to support decisions related to service lines and to engage top management’s participation (Voss and Hsuan, 2009).

Finally, modularity’s relevance for the competitiveness of tourist enterprises is supported by the widely recognized view of modularity as a pillar of innovation management theory and practice, adopted in different research fields such as engineering, psychology, biology and mathematics (Campagnolo and Camuffo, 2010; Schilling, 2003). Several contributions can also be identified in management studies, albeit somewhat vague and unfocused, mainly referring to implications for the management of complex systems of products and services, as tourism appears to be. Different approaches and framework have been developed by scholars and researchers in order to afford the complexity of tourism management, i.e. systems approach (Leiper, 1990), ICT enhanced experience co-creation (Prahalad and Ramaswamy, 2013), service-dominant logic (Vargo and Lusch, 2004), experience economy (Pine and Gilmore, 1999). Accordingly the adoption of modularity as a lens by which to read the strategy for competitiveness and survival of tourist business arises as an original contribution of integration and systematization of the above-mentioned perspective of study.

3. Research methodology

With a view to contributing to the extension of the scientific debate on the competitiveness of tourism companies by focusing on modularity as a suitable approach for designing and managing their offering, this study adopts an exploratory approach to derive patterns and implications for theory and practice. More in detail, the study attempts to provide an answer to the following research questions:

RQ1.

How does modularity fit the challenges associated with the value proposition of tourism companies? What are the implications of modularity for their competitiveness?

Based on the logic of grounded theory (Glaser and Strauss, 1967), a recognized method in research on managerial and organizational issues, the study adopts the qualitative methodology of a multiple case study, drawing on a limited number of examples to develop meaningful insights (Pettigrew, 1990). Two cases of tourism companies with different levels of modularity have been chosen to create a comparative study. This aims to provide a more in-depth understanding of how modularity fits the challenges associated with the tourism companies’ value proposition and what are the implications of modularity for their competitiveness.

3.1 The research context

The companies analyzed, Cala Ponte Marina and Albatravel Lecce, are both operating in tourism and are located in Apulia (Southern Italy), a destination with a growing reputation and differentiated and valuable offering: seas (Adriatic and Ionic), beaches, but also natural reserves and historical sites, recognized by UNESCO.

The two companies were selected based on their innovative value proposition, resulting from a deep knowledge of the destination, an original interpretation of their offering and the integration of a wide, combined set of touristic products and services. These are extreme cases (Eisenhardt, 1989; Yin, 1994) of successful examples of integrators within the destination and are key to understanding the meaning of modularity in tourism services.

3.2 Data collection

Multiple data collection methods were used to exploit the synergistic effects of combining them via triangulation (Eisenhardt, 1989; Jick, 1979). This consisted of combining investigative techniques to reduce the bias of a single observation in the comparison of multiple data (Tarrow, 1995). During the first research phase, we drew on secondary sources, such as archival records, documentary information, official corporate communication tools (such as websites, mainly the press section), Facebook fanpages and other social network accounts; from these sources, we determined the relevance of the cases to the study’s goals.

Later, the case studies were developed through in-depth interviews with the managers responsible for the companies’ business strategies, identified as key informants (Kumar et al., 1993). Specifically, for Cala Ponte, we interviewed the Entrepreneurship and Marketing Manager, while for Albatravel Lecce, the interviewee was the CEO and Manager Responsible for Incoming Activities. The in-depth interviews were undertaken from October 2014 to February 2015, structured as follows: plan, develop instrument, collect data, analyze data and disseminate findings (Boyce and Neale, 2006). During the planning phase, we conducted web research to identify the stakeholders to be interviewed. Later, we developed the instrument, namely an interview protocol (i.e. the instructions/guidelines for both the researcher and the interviewee). In the design phase, we developed a tool structured as follows: data reduction, data display and conclusion drawing and verification (Miles and Huberman, 1984). As argued by Gilmore and Pine (2000), in case study methodology, this approach guarantees the highest degree of reliability.

The interviews were based on semi-structured schema and a flexible approach. Specifically, the interview protocol comprised three sections:

  1. Company overview: legal name, core business, information on web presence (official website and social profiles), main markets of interest, collaboration networks, role of the interviewee.

  2. Company and regional context: awareness of the importance of the regional identity, culture and heritage, readiness of actors directly and indirectly involved in the regional tourism offering, contribution of the companies to the regional tourism offering, creation and nature of joint initiatives for promotion and communication, opportunities and strategies for deseasonalization.

  3. Value proposition and modularity: identification and classification of suppliers (from the most important to the least), degree of integration and modalities by which the suppliers collaborate to compose the company offering, sharing of standards and quality manuals within the company network, existence of a list of suppliers and selection criteria, degree of personalization of the offering and creation of packages, availability of information service and initiatives of social and smart tourism, degree and modalities of involvement of tourists in the creation of their own experience, and customer satisfaction.

Myers (2008) states that interviews offer an excellent “window” for achieving the research objectives, either to establish the informant’s perspective on an issue or to determine whether the informant can confirm insights and information the researchers already hold.

3.3 Data analysis

The data analysis followed an inductive and iterative process (Miles and Huberman, 1984; Strauss and Corbin, 1990). The first step of this phase was descriptive coding (included in the structure of the interview itself), drawing on Bask et al.’s (2011) framework which focuses on the perspectives of customization addressed through the adoption of a modular approach to services. The adoption of this framework is extremely useful in including the large number of factors underpinning a tourist offering and demonstrating how they have to be structured and composed to maximize customers’ satisfaction. The analysis of the findings was anticipated by data reduction and organization. Reading of data was conducted independently by researchers to form a comprehensive understanding of each case. Later, data were assembled into tables to ease comparison. This has allowed identifying the importance of some keywords representing the framework elements in terms of the decomposition of services and products underpinning the tourist destination and the degree of personalization of the tourism experience. The discussion on the interpretation of the data has allowed seeking relationships between consumers and companies and interaction in terms of the co-creation process. Finally, as described by Eisenhardt (1989), a further series of iterations between both secondary and primary data and the literature on modularity in services was performed to identify theoretical foundations.

4. Empirical findings

4.1 Background of the companies

Cala Ponte is an innovative marina located in Polignano a Mare, a well-known Apulian destination in Southern Italy. With respect to quality and safety standards, Cala Ponte was conceived as part of an integrated intervention enhancing quality in the whole area, surrounding and incorporating a hotel and a mall with shops and services. Located 1 km from the old town of Polignano, Cala Ponte is defined as a “tailor-made and exclusive Marina Resort from which to explore the landscapes around it.” The company has an official website (www.calaponte.com), as well as an official profile on Facebook. A local family of entrepreneurs owns and manages Cala Ponte. The core business of Cala Ponte is the rental of berths, over different periods (daily, monthly, seasonally, annually), but the large set of associated services made available to the marina’s guests represents a growing area of interest for the company’s profitability. As the interviews revealed, Cala Ponte’s value proposition is based largely on an integrated set of services and products describing the tourist destination in terms of its whole identity. Further elements of strength were identified in the geographical location of the marina, both in terms of its closeness to an efficient network of transport infrastructure and its privileged location within the international sailing routes from the north of the Adriatic toward Greece, Croatia and other Mediterranean destinations.

Albatravel Lecce is the local branch of Albatravel Group, an Italian tour operator working in the commercialization of tourist-integrated services. Located in Lecce, the company has been operating since 2,000 as an integrator of tourist services for business-to-business markets. One of the activities of major interest in relation to Albatravel is incoming tourism, its office being devoted to the commercialization of tourist services in the Apulia region. The company has an official website (www.albatravelapulia.com), as well as a profile on Facebook and a corporate blog. The most consolidated source of revenue for the company is accommodation services, but interesting aspects of profitability have also been identified in relation to a wide set of regional products and services arranged for singles (individuals and families) or groups (cruises being a growing segment). In all the cases, the company tries to satisfy the customers’ expectations by working on the composition of tourist packages that can be customized according to specific needs. This requires a deep knowledge of the tourist destination in its whole configuration, working on the modularization of services and products useful for trips and offering a large margin of personalization in the creation of the tourist experience. The company identifies its deep knowledge of the destination and belonging to an experienced network of suppliers as the major elements of strength in its own value proposition.

4.2 Companies and the regional Apulian tourist system

Cala Ponte

The regional identity and its characterization as a destination of growing popularity were identified as the most distinguishing features behind Cala Ponte’s competitiveness. This does not mean that all firms directly and indirectly involved in the composition of the Apulian touristic offering have the outstanding level of services required by the typical customers of an international marina. The development of Cala Ponte, with its integrated project for enhancing the quality of the area, has contributed to the quality of the local tourist offering. According to those interviewed, this has had a positive impact in activating a virtuous mechanism of enhancement of the quality of services and products associated with the marina. Perceived as a positive element in assuring the higher visibility of the destination, Cala Ponte tries to take part in the various promotional initiatives launched by the regional administration. As for the strategy of deseasonalizing, the relatively warm temperature during the winter, as well as the richness of the natural and cultural beauties is available almost all year round, contribute to attaining the marina’s long-term operation, although during the winter the customers are largely local.

Albatravel

The company identifies Apulia’s regional image as a distinguishing element in its value proposition. This must be read in the wider meaning, including also the cultural, agro-food and natural regional heritage. Focusing on the collaborations with regional actors, it is possible to note a general but not particularly qualified professionalism, although there are aspects characterized by high competencies and deep market knowledge. The consolidated experience of Albatravel in the incoming sector can absolutely be identified as a quality enhancement factor in the area (in terms of opening up new markets, such as Japan, since 2000). The company is aware of the importance of taking part in joint communication and promotional initiatives at the regional, national and international levels. These initiatives are often promoted by the Apulian regional tourism development agency and are evaluated as a positive element in boosting the quality of the destination. In terms of deseasonalizing, the company has successfully extended its season. Supported by the region’s mild climate, Albatravel is able to operate from April to November by targeting its offering toward different tourist segments. The cruises and groups are mainly concentrated in the Spring, late Summer and early Autumn, while during the summer, the demand mainly comes from individuals and families. The richness of attractions in terms of gastronomic, natural and cultural heritage has a positive impact on this deseasonalizing process.

4.3 Modularity in tourism local personalized experience in Cala Ponte

The company’s value proposition of derives from design and management of an integrated system of services and products. In addition to renting berths, which represents the marina’s core business, Cala Ponte provides a widely differentiated offering for customers. This is made available through in-house activities, as well as through a selected network of suppliers. It includes technical assistance, cleaning, catering and restaurants, accommodation, guides, fuel stations, entertainment, local handcrafts and agro-food specialties (Figure 2).

All the services and products available to guests are selected according to a preliminary evaluation performed by Cala Ponte’s managers and owners to assure high quality provision and customer satisfaction, as well as the personalization of their experience in the marina. All these elements constitute single modules that compose the final offering at Cala Ponte. Yachtsmen have described the availability of all these services on the website and with the Marina concierge. On each journey, customers may book services and products. To make this possible, Cala Ponte’s management is continuously involved in selecting local suppliers, monitoring customers’ satisfaction, proving feedback to the suppliers, contracting packages and providing different types of solutions. Integrating this large set of services and products within the Cala Ponte value proposition requires adopting quality standards, respecting time constraints and flexibility by suppliers in reconfiguring their offering according to the requests made by customers. Cala Ponte has a list of suppliers and the feedback received on existing partners; the creations of new partnerships with local firms are the main drivers in updating this list. The mechanism for monitoring customer satisfaction of is a questionnaire, available at the Marina reception, but also interaction with the receptionists, who are careful to note customer satisfaction during and at the end of their stay.

Albatravel

Albatravel’s mission is to provide an integrated set of services and products for tourists. From this perspective, the main components of such an offer are the structures implemented for accommodation, guides, restaurants, service providers, transport (public and private), handcrafts, museums and cultural entities (Figure 3).

All the actors involved have a direct or indirect impact on the effective achievement of the company’s objectives, contributing, albeit with different intensity, to making the tourism experience distinct. Albatravel works on the composition of services and products in packages for the agencies and further intermediaries, using a continuously monitored and updated list of suppliers. Criteria for evaluating partners are based on their nature; thus, for the hotels, price, location and cleaning are the main parameters adopted. For guides, the selection criteria are readiness, language skills and also capacity for emphasis. For restaurants, in general, the food quality is the essential element of choice. Collaborations with this large network of actors aim for a real exchange of knowledge and opportunities. Informal feedback mechanisms and customer satisfaction analysis are used to measure the quality of the services provided as well as to select future collaborations. Criteria for the selection of suppliers are widely differentiated; location and experience matter, but also the customers’ spending power and profiles. The modalities by which the different services and products are composed within daily or weekly packages are based on the customers’ expectations, from the creation of a typical day using different modules to the provision of different solutions regarding accommodations, activities enabling the discovery of regional attractions (sea, nature, culture, handcrafts, etc.), foods and local gastronomic specialties, transport services, etc.

5. Discussion

The two cases presented provide a deeper understanding of modularity’s relevance for the effective management of tourist companies’ offering based on complex and knowledge-intensive services. Table II provides a synthesis of the main evidence collected with reference to the dimensions of modularity and customization.

The two companies are characterized by their innovative profiles, and their activities can be assumed to have positive implications for the general growth of the tourist industry in the region. Both the companies operate as orchestrators of a wide set of products and services, designed to offer a largely personalized experience within the destination. This marks the two companies as knowledge integrators. In confirming tourism’s nature as a KIBS, our results are consistent with the view that adopting a modularity approach provides opportunities in the service sector. By allowing the combination of different and scalable solutions related to services and products, the two companies are able to serve different market segments, reserving special attention for the quality of services offered to maximize the tourism experience. This requires a deep knowledge of the region’s potentialities as well as the management of an articulated business network providing the products and services necessary for a trip. Furthermore, this is guaranteed by imposing of standards in terms of quality and timing.

In all cases, the configuration of the final tourist packages is based on customers’ requirements and expectations. Both the companies assume the identity of the regional destination as an important element of their own qualifications, as well as being aware of the importance of promoting and taking part in the regional integrated tourism system. The knowledge-intensive nature of tourism is identifiable in these cases in the prerequisites of deep knowledge of the destination (and all its components), awareness of the implications for their competitiveness deriving from tourists’ widespread adoption of ICTs and digital applications, the usefulness of these technologies in developing a more effective promotion and personalization strategy, and also for the prompt alignment and feedback with suppliers and partners. Modularity arises in the cases as a strategic approach to managing business complexity, assuring the effective composition of services and products and promoting the integration of different players.

In terms of modularity and its implications for services, the cases demonstrate that this is a useful approach for ensuring greater personalization of the customers’ experiences. The study of tourism as a knowledge-intensive and integrated system in which the companies operate allows us to confirm the opportunities offered by adopting modularity as a strategic approach in the service sector.

6. Conclusions

This study aimed to deepen our understanding of the challenges and opportunities associated with adopting modularity in designing and managing the overall offerings by tourist companies. The opportunity for adopting a modularity approach in tourism arises in our study as a response to the complexity of the industry, resulting from the composition of several products and services, as well as the knowledge-intensive nature characterizing the tourism experience. Nowadays, tourism is increasingly an experience and is enhanced by the widespread spread of ICTs, which exert an impact on the knowledge-intensive dimension of the services and products offered to tourists. The digitalization of consumption behaviors is of interest to tourism, enabling competitive engagement between destinations at the global level, both in terms of opportunities and challenges, and the creation of more empowered consumers; they start to discover the destination before they are on site and continue to be connected to their own networks virtually, thus combining their physical experience with the feedback, suggestions and recommendations available online.

From this perspective, the paper has focused on modularity with the aim of investigating how it can be adopted as a suitable approach for creating a more personalized tourism experience in the destination. It is important to note that the two cases analyzed, Cala Ponte Marina and Albatravel Lecce, demonstrate that the nature of KIBS underpinning value propositions in the tourism field and the tourism offering is increasingly an experiential path resulting from the integration of a wide set of products and services. This conception of tourism, emerging from the cases, demonstrates the benefits associated with adopting modularity in the design and management of offerings that increasingly respond to customers’ needs. The adoption of a framework combining modularity and customization consists of three main dimensions: service offering, service production and service production network. These perspectives illustrate how the service is offered to the customer and how the offering is implemented. Specifically, service offering regards the extent to which the experience is customized, while the depth of involvement is represented in the measurement of service production.

Elements of originality can be identified in this contribution to the extension of studies on modularity in the service sector as well as in the systematization of consolidated frameworks and theories related to tourism. Adopting modularity in tourism provides interesting evidence in terms of the implications for personalization. Whereas the literature on modularity has largely described its benefits in attaining mass customization (Duray, 2002; Pine, 1993), mainly in manufacturing, this study has demonstrated empirically how applying modularity in tourism can be employed as the strategic dimension of a personalized tourism experience.

6.1 Implications for theory and practice

The study offers an original contribution in determining the meaning of modularity in the field of knowledge-intensive services by demonstrating that the adoption of a modularity approach in the designing and offering by tourism companies can provide interesting benefits for their competitiveness and greater customer satisfaction. Moreover, adopting modularity in tourism as a lens by which to read the strategy for competitiveness and survival of tourist business is coherent with the different approaches and frameworks developed by scholars and researchers to afford the complexity of tourism management; i.e. systems approach (Leiper, 1990), ICT enhanced experience co-creation (Prahalad and Ramaswamy, 2013), Service-Dominant Logic (Vargo and Lusch, 2004), experience economy (Pine and Gilmore, 1999).

As for practice, it is possible to distinguish two levels of implications. The first is related to single companies operating in tourism and calls on them to recognize that the competitiveness of their own business is strictly linked with the quality and level of collaboration within the whole region. At the same time, the study demonstrates that different revenue sources can be identified by enhancing the regions’ cultural, natural, and gastronomic heritage. Furthermore, the study implies the need for serious reflection by policy makers in a region with a tourist vocation; in particular, they need to promote the creation of a regional brand able to integrate and promote the various tourist potentialities of a destination.

The nature of tourism as a regional integrated system emerging in this work suggests opportunities for innovative practices within the entrepreneurial backbone of the region, but also calls for a strong commitment by regional agencies to drive the region’s development path e according to its tourist vocation by balancing the interests of a distributed community of actors. The involvement of public actors as enabling nodes within the regional ecosystem, supporting the emergence of innovative and entrepreneurial practices to consolidate a destination’s tourist image, is a further important practical implication of the study.

6.2 Limitations and future research directions

The study has limitations under two main perspectives. The first one derives from the limited number of cases analyzed as well as for their geographical dimension, considering that both cases are located in the same region. At this purpose, future research could be addressed to enlarge the number of companies, also by including other regional destinations. This could allow to consolidate the evidences collected by identifying trends and dynamics of regional relevance. A second limitation is related to tourism as industrial context of analysis of the study. Despite its relevance as service-oriented and knowledge-intensive industry, the enlargement to other industries could disclose additional patterns and potential contributions to the advancement of the research agenda in the field of service innovation and modularity.

Figures

The tourist experience as a composition of different services and products

Figure 1

The tourist experience as a composition of different services and products

Cala Ponte’s offering: an integrated system of service and products

Figure 2

Cala Ponte’s offering: an integrated system of service and products

Albatravel’s offering: an integrated system of service and products

Figure 3

Albatravel’s offering: an integrated system of service and products

Modularity and customization in service offerings (adapted from Bask et al., 2011)

Types of service offering Degree of modularity Degree of customization Implications
Modular regular High Low Services configured by combining predetermined bundles
Non-modular regular Low Low Standard services bought from store with few options for customization
Non-modular customized Low High Services bought from tailor with opportunities for customization in the early stages
Modular customized High High Services bought to order with considerable opportunities for personalization

Modularity for creating a successful offering: case studies at a glance

Criteria of analysis Cala Ponte Marina Albatravel Lecce
Company identikit
Location Polignano a Mare, Apulia (Southern Italy) Lecce, Apulia (Southern Italy)
Core business Berth renting, accommodations and services Creation and sales tourist packages – incoming services
Main market (BtoB or BtoC) BtoC – national and international BtoB – local, national and international
Company value proposition Quality standards; co-branding with C&N and involvement in an international network of marinas; location; regional image Regional image; deep knowledge of the area; network of suppliers; degree of personalization of customers’ experience
Service offering (customer perspective)
Personalization of the customer experience High degree of personalization of tourist experience, according to specific needs of customers Company is able to serve different market segments High degree of personalization of tourist experience, according to specific needs of customers. Company is able to serve different market segments
Modularity as lever for the management of an integrated and knowledge-intensive tourist experience Cala Ponte offers an integrated and scalable tourist solution by leveraging different products and services. They can be chosen by tourists according to their time and financial constraints Albatravel offers an integrated tourist solution composed of a large number of services. According to time and financial constraints, tourist can compose their own experience
Service production
Company as orchestrator of a set of different products and services Yes, offering a comprehensive personalized tourist experience based on the integration of several services and products, realized in-house, outsourced or in collaboration with external providers Yes, offering a comprehensive personalized tourist experience emerging from the integration of a large set of services and products available on site. All those are outsourced
Company as knowledge integrator Yes, by developing a deep knowledge of the regional offering as well as of the customers’ needs and expectations Yes, by operating as knowledge broker, matching the consolidated knowledge of the region with the customers’ expectations
Production network
Company’s contribution to the quality of the regional tourist supply chain Yes, by supporting the process of quality enhancement of suppliers and partners with the sharing of quality standards and feedback Yes, by imposing quality standards on regional actors, selecting them based on their profiles
Mechanisms for assuring quality and satisfaction in the tourist experience Yes, through structured questionnaire for customer satisfaction. Suppliers are responsible for the quality of their offerings Yes, informally. Suppliers are responsible for the quality of their offerings

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Further reading

Del Vecchio, P., Laubacher, R., Ndou, V. and Passiante, G. (2011), “Managing corporate reputation in the blogosphere: the case of Dell computer”, Corporate Reputation Review, Vol. 14 No. 2, pp. 133-144.

Corresponding author

Pasquale del Vecchio is the corresponding author and can be contacted at: pasquale.delvecchio@unisalento.it

About the authors

Pasquale del Vecchio, PhD, is a Researcher and Lecturer at the Department of Engineering for Innovation of the University of Salento, Italy. In 2007, he was a Visiting PhD Student at the Center for Business Intelligence – MIT Sloan School of Management (USA). His research field concerns the issues of user-driven innovation and open innovation with a specific focus on the phenomenon of virtual communities of customers. Currently, he is involved in a project related to the development of a tourist-integrated system for the regional smart specialization as well as in a research venue focused on technology-driven entrepreneurship.

Giustina Secundo is a Senior Researcher and an Assistant Professor in Management Engineering at the University of Salento (Lecce, Italy). Her research interest regards intellectual capital, academic entrepreneurship, innovation management and knowledge-intensive entrepreneurship. Her research appeared in Journal of Intellectual Capital, Knowledge Management Research & Practices, Measuring Business Excellence, Journal of Management Development. She is a Lecturer of Project Management at the Department of Engineering for Innovation of the University of Salento since 2001. She is a Member of the Project Management Institute. Across 2014 and 2015, she has been a Visiting Researcher at the Innovation Insights Hub, University of the Arts London (UK).

Giuseppina Passiante is a Full Professor of Innovation Management and Technology Entrepreneurship at the University of Salento. Currently her research fields concern technology entrepreneurship, and more specifically the experiential learning environment encouraging enterprise and entrepreneurship capabilities, skills, and competencies. She is also an expert in knowledge-based organizations and local systems, ITs and clusters approach, complexity in economic systems. In these research fields, she has published several books and about 100 papers. She is an Associate Editor of the International Journal of Innovation and Technology Management and coordinator of the International PhD programs on Technology Innovation and Entrepreneurship at the University of Salento (Italy).