**3. Application of the industry structure analysis**

#### **3.1. Logistics**

In the following section, the Five Forces methodology will be applied to the logistics sector against the background of the construction of a Fehmarn-Belt Fixed Link.

First, the *competition intensity* within the industry itself is considered. A fixed Fehmarn-Belt crossing would be a catalyst for the establishment or strengthening of a North European region, which would lead to new market opportunities and new growth potential. Thus, one can assume that from the beginning, an intensive struggle for the resulting opportunities should be carried out. Moreover, among the established players, there are also companies that could suffer from the new connection. For example, in the case of the Port of Hamburg, it is to be assumed that a large number of transactions that previously took place by sea would be subject to a thorough economic examination.

As far as the *negotiating power of the customers* is concerned, this is a significant factor due to the comparatively high (and possibly increasing) number of logistics companies and potential transport routes. Furthermore, customers are increasingly more well-informed as a result of digitization, which may lead to easier substitution of established business relationships. In addition, however, it must be pointed out that the customers of the logistics industry will also benefit from new market opportunities and, accordingly, a rising demand for transport is expected.

On the *supply side*, the logistics sector depends on vehicle manufacturers and the suppliers of complementary products (in particular the mineral oil sector). An increasing number of market transactions also mean an intensification of this relationship.

The market entry of *new competitors* poses a significant threat to existing players in the logistics sector. It can be observed that commercial enterprises (e. g. Amazon) are expanding their activities and beginning to integrate logistics services by themselves (*vertical integration*). Against the background of new market opportunities, the attractiveness of such efforts is also increasing.

The number of fitting *substitutes* with respect to the classic logistics sector is limited. It is possible to think about alternative routes, alternative transport channels, and alternative providers. These possibilities were already numerous, and—as already described—they are likely to increase. Nevertheless, the physical transport of a commodity from start to finish cannot be replaced. A withdrawal from the market occurs only when commercial enterprises set up their own logistics networks and sites, thus rendering the services of the classic logistics sector obsolete (**Figure 2**).

Leaving the mobility of commodities and the influencing factors on logistics, the next section deals with the Five Forces influencing the touristic service in the fixed Fehmarn-Belt link.

#### **3.2. Tourism**

**3. Application of the industry structure analysis**

**Figure 1.** Porter's Five Forces (own depiction based on Porter [4]).

212 Mobilities, Tourism and Travel Behavior - Contexts and Boundaries

subject to a thorough economic examination.

against the background of the construction of a Fehmarn-Belt Fixed Link.

In the following section, the Five Forces methodology will be applied to the logistics sector

First, the *competition intensity* within the industry itself is considered. A fixed Fehmarn-Belt crossing would be a catalyst for the establishment or strengthening of a North European region, which would lead to new market opportunities and new growth potential. Thus, one can assume that from the beginning, an intensive struggle for the resulting opportunities should be carried out. Moreover, among the established players, there are also companies that could suffer from the new connection. For example, in the case of the Port of Hamburg, it is to be assumed that a large number of transactions that previously took place by sea would be

As far as the *negotiating power of the customers* is concerned, this is a significant factor due to the comparatively high (and possibly increasing) number of logistics companies and potential transport routes. Furthermore, customers are increasingly more well-informed as a result of digitization, which may lead to easier substitution of established business relationships. In addition, however, it must be pointed out that the customers of the logistics industry will also benefit from new market opportunities and, accordingly, a rising demand for transport

**3.1. Logistics**

is expected.

Tourism and mobility are closely linked. This is because tourism is a service that requires the mobility of clients/customers to create the touristic "product." Tourists have to travel to

**Figure 2.** Porter's Five Forces applied on logistics in the Fehmarn-Belt Area.

the destination and avail of the touristic service for instance by sleeping in a hotel, cycling in the region, or dining in a restaurant. By doing so, the touristic service can be performed (*uno-actu principle*).

For destinations, it is mission and challenge alike to create touristic space. It forms part of the presentation of the region. The valorization of space for tourists is also regarded as a form of production of space. Destination marketing organizations attempt to attract the interest and catch the eye of the tourist: information offers before the journey (website, flyer, and pictures in google maps), information about sites to be seen, places to cater to one's needs, and special insider tips are staged and promoted. Urry and Larsen [5] therefore coined the term "the touristic gaze." In managing that touristic view of the region, the two driving forces, digitization and spatial development mentioned above, have impacts on the work of destination marketing organizations in the Fehmarn-Belt region. To analyze the potential effects the planned link across the Baltic Sea will have, Porter's Five Forces analysis [6] will be applied in the following paragraphs on the touristic sector in the region. How will the intensity of rivalry between competitors be affected? What are the threats of new entrants due to the changes in the region? What are possible substitutes for the touristic product in the region? How will the power of the buyers change? What are the possible changes in the touristic supply of the market?

Regarding *industry rivalry*, the new connection offers access for international competitors. This might increase rivalry in the area. Likewise, it creates opportunities for cross-border cooperation.2 New partnerships of Baltic Sea regions in Denmark and Germany might form new marketing cooperation to offer new touristic products or bundles (for instance, forming an itinerary to highlight lesser-known Viking sites with the same history in the Baltic Sea area).

As this is a chance for cooperation on the one hand, it poses a *threat of new entrants* to the market on the other hand. Touristic regions in Denmark and southern Sweden that so far have been a 'long haul destination' will be closely linked to Germany's East Coast. Baltic Sea tourists have easy access to these destinations. Incoming agencies from Scandinavia might like to attract day-trippers from the German side of the tunnel and vice versa. Suppliers of restaurants and hotels from Scandinavia might like to sell the product to the German food and hotel industry and vice versa, due to an easier connection via the tunnel.

Touristic carriers such as ferries and cruise ships will especially face the *threat of substitutes*. All the new options for cross-border carriers that use the fixed link, such as buses and taxis, are new entrants to the touristic carrier market.

Regarding the better reachability of Denmark and southern Sweden, it is likely that potential tourists of the German Baltic Sea region will start to compare prices for their holiday with these alternatives as well. The quick link to Scandinavia makes traveling more comfortable and the decision to do so much easier. Besides, taking their own car through the tunnel

<sup>2</sup> Göttel [7] examined how and why cross-border cooperation in borderland destinations could be a way to intensify competition and development of the border destinations. One of the key findings of her literature review was that building trust is a critical success factor for corporations [7, p. 69]. Further aspects for successful cooperation were communication, mutual learning routines, inter-organizational learning, exchange of knowledge and successful conflict management [7, p. 71].

increases mobility for tourists in the travel destination. The *bargaining power of customers* increases. Day trips from and to Scandinavia are easy to arrange using the tunnel. Buying power might shift between these regions.

The *bargaining power of suppliers* can be viewed from different perspectives in the tourism industry. Suppliers can be seen as food and material suppliers for touristic core services such as hotels or restaurants. They might expand their clients to hotels and restaurants on the other side of the tunnel, increase their existing portfolio, and supply more or different clients. Broadening the concept of suppliers to the carriers, we might then speak of the same suppliers, which the logistic branch is dealing with (see Section **3.1**). These are for instance the fuel delivering industry facilitating travel, the garages alongside the new transport axis ensuring repair services, as well as further services such as car washes (**Figure 3**).

#### **3.3. Deduction of competences**

the destination and avail of the touristic service for instance by sleeping in a hotel, cycling in the region, or dining in a restaurant. By doing so, the touristic service can be performed

For destinations, it is mission and challenge alike to create touristic space. It forms part of the presentation of the region. The valorization of space for tourists is also regarded as a form of production of space. Destination marketing organizations attempt to attract the interest and catch the eye of the tourist: information offers before the journey (website, flyer, and pictures in google maps), information about sites to be seen, places to cater to one's needs, and special insider tips are staged and promoted. Urry and Larsen [5] therefore coined the term "the touristic gaze." In managing that touristic view of the region, the two driving forces, digitization and spatial development mentioned above, have impacts on the work of destination marketing organizations in the Fehmarn-Belt region. To analyze the potential effects the planned link across the Baltic Sea will have, Porter's Five Forces analysis [6] will be applied in the following paragraphs on the touristic sector in the region. How will the intensity of rivalry between competitors be affected? What are the threats of new entrants due to the changes in the region? What are possible substitutes for the touristic product in the region? How will the power of the buyers change? What are the possible changes in the touristic supply of the market?

Regarding *industry rivalry*, the new connection offers access for international competitors. This might increase rivalry in the area. Likewise, it creates opportunities for cross-border

new marketing cooperation to offer new touristic products or bundles (for instance, forming an itinerary to highlight lesser-known Viking sites with the same history in the Baltic Sea

As this is a chance for cooperation on the one hand, it poses a *threat of new entrants* to the market on the other hand. Touristic regions in Denmark and southern Sweden that so far have been a 'long haul destination' will be closely linked to Germany's East Coast. Baltic Sea tourists have easy access to these destinations. Incoming agencies from Scandinavia might like to attract day-trippers from the German side of the tunnel and vice versa. Suppliers of restaurants and hotels from Scandinavia might like to sell the product to the German food

Touristic carriers such as ferries and cruise ships will especially face the *threat of substitutes*. All the new options for cross-border carriers that use the fixed link, such as buses and taxis,

Regarding the better reachability of Denmark and southern Sweden, it is likely that potential tourists of the German Baltic Sea region will start to compare prices for their holiday with these alternatives as well. The quick link to Scandinavia makes traveling more comfortable and the decision to do so much easier. Besides, taking their own car through the tunnel

2 Göttel [7] examined how and why cross-border cooperation in borderland destinations could be a way to intensify competition and development of the border destinations. One of the key findings of her literature review was that building trust is a critical success factor for corporations [7, p. 69]. Further aspects for successful cooperation were communication, mutual learning routines, inter-organizational learning, exchange of knowledge and successful conflict

and hotel industry and vice versa, due to an easier connection via the tunnel.

are new entrants to the touristic carrier market.

New partnerships of Baltic Sea regions in Denmark and Germany might form

(*uno-actu principle*).

214 Mobilities, Tourism and Travel Behavior - Contexts and Boundaries

cooperation.2

management [7, p. 71].

area).

New competences are required to manage tourism and logistics in the region. On the basis of the fixed link, tourists and companies have easier access to the new markets. Due to touristic actions (day trips and entire holidays) and new business relations between firms, buying power that would have stayed in the region could move across the border.

In this sense, growing mobility is understood both as an opportunity and as a threat. The intensified competition and (among other things in the course of digitization) more enlightened customers require actors to be thoroughly prepared for the new challenges.

For both the tourism sector and the logistics sector (for which mobility is a key factor), specific competences in need of development can be derived.

**Figure 3.** Porter's Five Forces applied to the tourism sector in the Fehmarn-Belt Area.

In a classical sense, educational institutions, such as universities, first assume the function of knowledge transfer. Thus, it is necessary to make *market knowledge and market competences* accessible to economic actors. It is therefore all the more important to have a sound knowledge of trade and traffic flows, economic and social policy, and the legal framework, especially as a result of the clearly no longer delimited economic boundaries. The knowledge of the macroeconomic environment has put the players in a position to critically develop, implement, and evaluate company strategies.

Another essential element is the ability to *work and cooperate internationally*. Numerous nations would participate in the newly emerging or strengthened markets by means of a Fehmarn-Belt Fixed Link, which particularly in industries such as logistics and tourism requires appropriate competences.

To achieve this, *intercultural competencies* are of the essence. Even in seemingly comparatively homogeneous spaces such as the Fehmarn-Belt region, there are clear cultural differences that affect business life and can be a key factor in determining the success or failure of economic relations.

In a fundamental sense, *language skills* are also necessary. In addition to English as a lingua franca, the importance of German and Scandinavian languages is obvious. Due to the numerous customer relationships among the industries under investigation, it is clear that profound knowledge is indispensable here.

Another important aspect is *networking skills*. This is true in both digital and analogue respects. While the importance of communication will not decline on a personal level, an additional intensification of digital networks will be indispensable. Accordingly, economic actors must be prepared to use them sensibly and avail trends.

In this context, *digital literacy* is also to be mentioned. Today, it is impossible to imagine working without information technology in everyday life. However, since the use of the resulting possibilities is always limited by the human factor, competence development in this area is highly promising in order to gain competitive advantages.

In general, in the face of increasing complexity and growing interdependencies, the training and honing of *critical and analytical thinking* are indispensable. As stated above, it is still the human being that—regardless of digital possibilities and developments—defines basic goals and strategies.

In summary, it can be said that education institutions in the future will still be concerned with the transfer of knowledge, but more and more specific competencies and skills will come to the fore. It is only in this way that it is possible to master the challenges arising from new (physical or digital) spaces.
