Market structure, behaviour and performance in consumer service industries
This thesis takes as its underlying theoretical framework the market structure-conduct-performance paradigm of industrial organisation as applied to consumer service industries, notably retail distribution and tourism (including hotels). The addition to knowledge arises from the disciplined application of industrial organisation principles to define, describe, explain and predict real-world behaviour of a selection of service firms and on the basis of observable data, whether government and supra-national policies can improve service market performance if it is found to be failing in clearly defined respects. The problem addressed is how the behavioural processes of competition arise from and shape the identified market structures to be found in consumer service markets. The work begins by examining in detail the development of the main hypotheses and empirical testing of the market structure-conduct-performance framework, followed by the identification of the main strands of past and current economic thought concerning service industries and service firms. Following on from this fundamental analysis of service industries, the definition of markets, industries and firms (basic underlying conditions and parameters linked to market structure) is undertaken, taking hotel and restaurant markets in a spatial dimension, with a novel empirical identification, definition and measurement of the size and growth of hotel markets in particular localities. Moving on from this analysis, the measurement of concentration in the hotel and retail distribution industries is considered with the first attempt at systematically measuring such concentration using an extensive database of companies. Entry to markets (a further element of market structure) is carefully examined with the entry of new firms into local hotel markets and evaluation of the possible impact of a new hotel business on existing hotels. Market conduct or behaviour is examined, first, the reactions of hotel managers to new competition, based on a survey of 250 UK hotel managers followed by a rigorous analysis of market behaviour in grocery retaining markets (especially the analysis of oligopolistic behaviour). Further chapters examine an innovation and diversification in a stable hotel market - the introduction of the budget or economy hotel Finally, service market performance is considered in detail at various points (impact of new hotels and behaviour in grocery retail markets) but is principally considered in teh definition and enhancement of performance by a wide ranging and unique empirical study of European Union (EU) tourism policies within each member state of the EU.