LAMA GROUP ---- “Let’s Grow Together” or “Hum Saath Saath Hain”
By
Abha Sadana, Lecturer, IILM (New Delhi) and
Simran Sadana, Student of 3rd Semester M.A. (Economics), Delhi School of Economics
Tourism during the last two decades has been a roller coaster ride. It has seen various natural and man-made disasters ranging from Iraq war, September 11, SARS etc, economic recession, volcanic eruption in Iceland, Katrina hurricane, Tsunami etc. All the major destinations in the world were affected by these happenings one way or the other. Hence ---- could UAE have been spared? This destination also underwent crises of change and uncertainty: a crisis brought on by nature and at times by human error. During this period we saw Dubai emerge as a shopping paradise with tourism infrastructure and facilities which would have been any architect’s dream. With rise of this spectacular destination rose a number of tour operators namely Arabian Adventures, Net Tours, Desert Adventures, Alpha Tours, Arabian Nights Tours, Desert Rangers, Knight Tours and Traveco LLC etc. Amongst this herd of tour operators rose a company titled LAMA Desert Tourism LLC., a company which at its inception made a humble beginning now boast of three impressive desert camps, two Dow cruises, more than 350 professional employees and a huge fleet of vehicles and luxury coaches. In addition to the above LAMA Group triggered innovation via specialization. It floated the following companies at frequent intervals which catered to specific elements of a tourist product i.e. restaurant, apartment hotel, transport, advertising and printing, holiday packages etc.:
Lama Desert Tourism L.L.C.
Lama Holidays LLC
Lama Dubai-Floating Restaurants L.L.C.
Lama Safaris and Cruises L.L.C.
Lama Constructions LLC
Seven Sands Hotel and Suites
The Bus Connection LLC
Lama Sahara Travel and Tours (Oman)
Lama Tours and Travels (Philippines
How did this happen in an era of stiff competition throws light on the potential of innovation, diversification and creative entrepreneurship in a dynamic business environment.
Innovation is at the heart of any successful company’s agenda but its importance has usually been underestimated in the service sector. The leading theoretician of innovation Joseph Schumpeter had a broad vision of this concept which encompassed new products, new production processes, new markets, new raw materials and new forms of organizations. The code words were “New” and “Innovation”. The LAMA Group in its rise to greater heights proved how innovation can result in creation of value not only for the tourists but also involve other stakeholders such as employees, shareholders, external partners etc. Any rise to the top with its foundation on “SYNERGY” is a long term endeavor and its gains also spread amongst all for a longer period of time.
Dubai where the LAMA Group opened its first office was blessed with sand dunes which could be tapped as a tourist attraction. Various companies existed who were promoting this product. The LAMA group entered the product cycle with the objective of providing a true Arabian experience. This Arabian experience as the product developed was to transport the consumer to an era of the past and give them a taste of an experience hundred years back. Hence LAMA Desert Tourism conceptualized a Bedouin village which offered overnight safari full of dune bashing and camel rides, sand skiing coupled with memorable sunset with an exotic belle dance taking the evening by storm and serving of mouthwatering BBQ buffet dinner. It is pertinent to mention that this was a new product which had entered the market. There is no doubt that there were several travel agents when LAMA conceptualized this product, but they were all ticketing agents. There were only one or two tour operators and a couple of safari operators. The safaris during this period were not as well organized as today because the infrastructure was not as well developed. The LAMA group took advantage of this opportunity and through product innovation created a demand which resulted not only in its own growth but also in new players entering the market.
Innovation as a strategy has its risks and many a times fails. Carl Franklin in his book ‘Why innovation fails’ quotes a study by three academics – Donald Lehmann, Jacob Goldenberg and David Mazursky- in which they looked at 197 product innovations of which 111 were successes and 86 were failures. The features which are essential for successful innovations have some common threads and the LAMA group in their strategy adopted them. They are:
Safari as a product was moderately new to the market but based on ‘tried and tested technology’ in other markets. This product existed in other tourist destinations and just needed to be adopted in this destination.
A complete Arabian experience met the customer needs and offered value for money.
The product being offered had the local support: as a culture of which Arab world is proud was being offered to the discerning traveler.
As the product developed, many competitors entered the market. Each new agent had very limited resources and hence cooperation of the existing tour operators like the LAMA Desert Tourism and work with unity was the only source of survival. The Government was keen to support agencies who were seriously working to promote Dubai as a tourist destination. Hence an amicable atmosphere was created where incentives were offered in the form of reduced/low trade license fees, easy issue of tourism licenses and reduced participation fees for overseas exhibitions and marketing campaigns. Innovation in the tourism industry relies as much on co-operation and networks as in other service industries. Co-operation among policy makers and entrepreneurs is also one of the key factors for the constant growth of the tourism industry. While the business sector plays the main role in establishing networks, governments are responsible for the development of infrastructure that enables better co-operation and supports market networks.
The advent of Lama Group into the arena of Desert Safaris proves that to survive in global competition, tourism firms should try to enter into competition that is constructive rather than destructive. While the former would make the pie bigger, broaden the product platform and finally gain successful product differentiation and innovation for world-class products, the latter would keep firms competing for the same slice of the pie and result in product convergence and price wars. It is therefore important that tourism entrepreneurs know how to co-operate with each other in order for there to be constructive competition. The success story of the LAMA in the field of Desert Safaris is also the success story of this tourism product in Dubai. This is not an individualistic approach but of growing hand in hand. In Hindi we would call it the “HUM SAATH SAATH HAIN” approach. The key word in strategy is not ‘competition’ but ‘coopetition’. ‘Coopetition’ is a neologism coined to describe ‘Cooperative Competition’. ‘Coopetition occurs when companies work together for parts of their business where they do not believe they have competitive advantage and where they believe they can share competitive advantage.
It seems that the mantra of LAMA GROUP is: Diversifying Your Customer Base: Embrace Your Competition
You don't have to fight your competitors for their audience; working together can often be much more efficient. The National Building Museum in Washington, D.C., uses this philosophy to broaden its reach both locally and nationally. Through partnerships with like-minded organizations such as The American Institute of Architects and sponsors such as The Home Depot Foundation, the museum has increased national recognition of the organization by opening access to our partners network of supporters and members, . This in turn has resulted in increased web traffic, attendance at museum programs and exhibitions, and new fundraising opportunities for the museum. Partnerships go both ways, so if you are willing to help out your neighbor, you have the opportunity to gain the support of a much larger network. Hence, when the LAMA’s village in the desert became popular it triggered the popularity of Desert Safaris as a whole resulting in this product being a supreme USP of this destination.
It is apparent that the management of LAMA GROUP believes in the views of Adam Brandenburger and Barry Nalebuff,
‘‘The goal is to do well for your-self. Sometimes that comes at the expense of others, sometimes not. In business, your success doesn’t require others to fail - there can be multiple winners. Putting co-opetition into practice requires hardheaded thinking. It’s not enough to be sensitized to the possibilities of cooperation and win-win strategies. You need a framework to think through the dollars-and-cents consequences of cooperation and of competition.’’
Innovation and value are more and more commonly generated in networks. In fact, Management Guru Peter Drucker and other experts have suggested that the collaborative dynamic of networks, partnerships, and joint ventures is a main organizing principle in the New Economy. Social capital (networks, shared norms, and trust), as fostered in collaboration and alliances, may be as important as physical capital (plant, equipment, and technology), and human capital (intellect, character, education, and training) in driving innovation and growth.
Over a span of thirteen years, LAMA Group expanded itself into group of companies as mentioned above. All these companies were separate profit centers but their objective was to promote the macro level goal of the LAMA Group i.e. promotion and development of tourism in UAE. Innovation and diversification go hand in hand and growth of any Business House needs to take them into account. The LAMA Group not only diversified their product line in UAE but recently they have entered India with a similar product in Jaisalmer. Success in one destination is being replicated in another destination. The Desert Safari epidemic’ is showing its infectious nature. Now the LAMA Group can draw an itinerary connecting its desert camps in India and UAE and promote both venues as a composite entity.
The development line of the LAMA Group from one Desert Village in Dubai to a group of tourism products companies and then its entry into India shows creative entrepreneurship in a dynamic business environment. The company has also launched issue of visas on mobile ---- the first of its kind in the world. At every step LAMA is proving like Shiv Khera that to be successful you don’t have to do different things but do them differently.
LAMA’s success – depends on their ability to master three critical skill-sets:
Creativity – generating new ideas, evaluating them effectively, taking action to turn them into new products and services.
Collaboration – connecting and working with partners, clients, and other significant players in your network, which will probably be scattered across the globe and contain more ‘virtual’ relationships than face-to-face ones.
Entrepreneurship – identifying opportunities in the marketplace and using business skills to turn ideas into products into profits.
John Howkins defines creative entrepreneurs as people who ’use creativity to unlock the wealth that lies within themselves’ rather than external capital. The value they create lies not in their physical products but in intangible assets such as their brand, reputation, network and intellectual property. They are adept at projecting a desired image and creating a personal brand, both online and offline. They also understand the principles of intellectual property law and use copyrights, trademarks, patents and licenses to exploit the full potential of their ideas.
Creative entrepreneurs are not freelancers. Freelancers earn a living by doing paid work for clients, usually charging by the hour, day or project. Freelancers think in terms of ’getting more work’. Creative entrepreneurs think in terms of creating opportunities, producing results and making profits. This leads them to create systems and businesses that generate wealth and free up their time for their next big idea.
