CHAPTER 3. Capturing Opportunity: A Framework for Defining Regional
3.3 The Approach to Empirical Investigation
3.3.2 Stage Two: Testing the perceptions of regional port managers about
The second-stage of the research which is covered comprehensively in Chapters 5, 6 and 7 used the findings of the first-stage to develop a more formal and structured survey with clear investigative questions that were categorised, pre-tested and later incorporated in a questionnaire which was then administrated through the Internet to a selected sample of port managers from both regional port authorities and regional port service providers. All the relevant questions that were asked were in line with the research objectives. They were derived from the following sources:
a comprehensive literature review; observations of business practices; and
the in-depth interviews conducted in the first-stage.
Especially, the in-depth interviews offered the opportunity to uncover a number of major dimensions, relevant criteria and factors that senior port managers believe explain how and why a regional port successfully competes in the shadow of its capital city port, in particular how regional port managers capture valuable opportunities in the quest for growth and survival.
The objective of the second-stage of the research was to take the qualitative data gathered in the interviews and transform them into data that could be quantified easily so as to allow us to collect quantitative responses and apply more sophisticated methods of data analysis such as discrete choice modelling and non-parametric classification and regression trees to model opportunity choice and develop a decision support system for opportunity selection. The survey used in the second-stage of the empirical investigation adopted the established scales and measures of attitudes and preferences (Kinnear et al. 1994) to collect data on a number of statements that explored the strategies that regional ports use to compete with capital city ports as well as the process of opportunity capture.
A major interest of the study was to model the choice of a valuable opportunity in the quest for growth. Therefore, the Internet survey used in this stage contained a section with a choice experiment designed specifically to allow the collection of stated preference data for use in discrete choice modelling (Louviere et al. 2000) to model opportunity choice. In the absence of revealed preference data, it has been shown that the stated preference surveys are reliable and produce data consistent with economic theory from which econometric models can be estimated which are indistinguishable from their revealed preference data counterparts (Louviere et al. 2000). Stated preference data augment the scope of revealed preference data in that they allow investigation not only of what the economic agents and markets actually do – ex post facto – but also what they will potentially do given a combination of a number of factors – ex ante behaviour (Bradley and Kroes 1990).
Hensher (1994) provides a review of the use of experimental data in various disciplines. Stated preference (SP) techniques are based on information integration theory in
psychology (Anderson 1981), random utility theory in economics, and econometric specifications of discrete choice models (Hensher and Johnson 1981). Hensher (1994: 108) asserts that:
Stated preference experiments are now the most popular form of SP method in transportation and are growing in popularity in other areas such as marketing, geography, regional science and tourism.
In the absence of useable revealed preference data, there is strong justification for SP techniques. Even if the former data were available, Hensher and Bradley (1993), Bradley and Daly (1991) and Hensher (1994) have shown that revealed preference data could be enriched by combining it with stated preference data. Besides, port managers would be more interested in the strategic intentions of the port management teams than in the revealed choices of current strategies and market opportunity investments. The information content of the latter, whilst useful, is historical and may not necessarily be a pointer to future strategies likely to be adopted by regional ports.
Stated choice modelling is based on respondents' statements rather than on actual behaviour, but this type of preference information relates to an explicit choice context customised to reflect (to the extent possible) actual alternatives and constraints. Here, the statements indicate not just preferences, but also expected behavioural actions embedded in statements such as e.g. 'which of these alternatives would you choose?' Utility maximisation as a measure used to discriminate preferences for alternatives and predict choices is unique compared with the more commonly used Likert-scale approach, because it requires respondents to make trade-offs among a set of mutually exclusive and exhaustive alternatives as defined by attribute levels. It appears to approximate choice behaviour more closely than traditionally used scale items, since respondents choose alternatives rather than simply provide evaluative response. Here, it is assumed that the decision-maker chooses the alternative with highest utility, desirability or value among the set of alternatives.
Once the Internet survey was implemented and the data collected, the perceptions of regional port managers about regional port growth were analysed with descriptive statistics and the opportunity choice was modelled with discrete choice modelling.
Further, the choice data was used to develop a decision support system that could assist regional port managers to improve the effectiveness of their opportunity choice decisions. The decision support system is based on non-parametric classification and regression tree (CART) methodology whose fundamentals and implementation are explained comprehensively in Chapter 6.
3.4 Summary
This chapter has argued that appropriate strategies for regional port growth focus on capturing valuable opportunities over time. Further, it has suggested and discussed the key elements of a framework that underlines opportunity capture as a strategy for regional port growth. In addition, the chapter suggested a methodology to apply in the subsequent empirical analysis in order to test the validity of the proposed framework on opportunity capture.