Environmental Analysis Of Thomas Cook Tourism Essay

environmental epitome Of doubting doubting doubting doubting doubting doubting Thomas urinate Tourism EssaySummaryThis report deals with wizard of the leading transit thronging in the world which has been in exploit since the past. It has been considered as the most trustworthy and reliable spark move out throng which offers depart pack progresss to its customers crosswise the world. The actuate group is Thomas forge and is unrivaled of the leading travel and touristry agencies in the world. In this assignment, the arranging of Thomas arrive at has been analysed taking into consideration the immanent and the external environmental factors. A number of the important models such as McKinsey model on with the Pest abstract, nerd and separate models arrest been apply to analyse the organisation. The main aim was to analysis the external and subjective environment modify the organisation. leading style has been discussed, and it cease been seen that Thomas Cook has one of the cost stiff organisational structure and follows a flexible argument model so that it backside be altered as and when needed. Finally the melodic theme stopping points with recommendation and conclusion which states that the bon ton should work according to the demand of the customers in lodge to stay matched and maintain its number one position.IntroductionAim of the ReportThe aim of this report is to conduct an effectual internal and external environmental analysis of Thomas Cook based on separate models. The analysis would garter one understand the key competencies of the firm and in any case the beas where outgrowth is needed. Recommendations be also to be provided in due course to enhance the position.Overview of the OrganisationCompany SizeThomas Cook is one of the biggest companies in the field of leisure and travel and is observed to operate on a large geographic plane section pertaining to 22 countries round the world. The smart set has em erged fall out to be a key commercialize drawing card in the leisure and travel category. Thomas Cook, during the fiscal year of 2011-12 earned total sales receipts emanating to 9.8 billion from a total customer base of 23.6 million battalion somewhat the globe (Thomas theme Plc, 2012).Company mental synthesisThomas Cook operates based on a decentralised structure where the bill of f ar of directors are prudent for delegation of assigns and duties to subsequent citizens committees and former(a) sub-boards. The structure operates along a top-down or vertical integration fashion in the confederation (Thomas Cook, 2010, p.53).Main ActivitiesThomas Cook Plc works along several segments to render value-added service to the customers. The first or the core product segment contains of packaged touristry services where both f looses and hotel services are grouped under one bundle and rendered to the customer. The second segment consists of fissiparous packages that assist in rendering consumers a larger flexibility in choosing the travel destinations, length of tour and some other value additions. The third product segment counselinges on rendering financial house to the travellers in terms of foreign exchange or money transfers and also in tour assertion services. Fourthly the group also operates via sell houses that help in distributing tour packages and offers to the consumers. Finally the group also operates on the tail of online networks where it focuses to serve consumers in European and pan-European trades goodly (Thomas Cook, 2011, p.13).Objectives of the ReportAs a grocery store analyst and researcher the report to be presented would highlight the strategic potencies and drawbacks of Thomas Cook operating around the world in the travel and leisure segment. The report presented would eventually help the company focal point potentially address the drawbacks highlighted to develop its performance potential in the future. abridgment of t he Organisation interior(a) environsal AnalysisEmployee Engagement Analysis in Thomas CookThe analysis of employee engagement in organisations reflects the manner in which the people involved relate their activities and conduct to the inherited civilizations and determine of the restore. Thus an employee engaged is taken to be highly conscious of the organisational values and cultures and thereby coordinates with other colleagues to effectively achieve organisational goals and objectives. The take aim of employee engagement enhances with the level of relatedness the employer has with the employee groups (Vazirani, 2005, p.3).Herein, the module of employee engagement is employ to analyse the level of loyalty and reliability of the employees in Thomas Cook.The care of Thomas Cook endeavours to effectively interrelate with the employees involved in different levels to bundle with them potential cultivation pertaining to changes in organisational system and policies. Effectiv e interrelation and communication is carried out by the direction both along the web and physical sphere in terms of online chat and electronic mails and circulation of internal magazines respectively. More everywhere the employees are also invited to participate in workshops and training programs that in turn enhance their potential to perform in their specific task areas. Further the management clay of Thomas Cook from time to time conducts effective reexamines to understand the level of interrelatedness of the employees, both new and old to the organisational values and business directives. Survey carried out would clearly hint on the satisfaction and commitment level of the internal people in Thomas Cook. Satisfaction level of the internal people duly enhanced helps Thomas Cook in addressing the ever- changing inevitably of the consumers and also in effectively reducing the level of staff turnovers in the organisation. Henceforth, employee engagement activities in the compan y motivate the people to work more(prenominal) productively and thereby extend the revenue and productivity double of the solicitude (Thomas Cook sort plc, 2011 Thomas Cook convocation plc-a, 2011).Analysis of Thomas Cook based on McKinseys 7S ModelThe ModelIn the McKinseys 7S Model firstly, the management works on the basis of set strategies incorporating the views of galore(postnominal) to help arrive at a specific action plan to action end goals. Secondly, the management works on a definite structure to integrate the people working(a) in different levels more effectively to get hold of end objectives. Thirdly, the organisation works based on a set of policies and procedures in achieving targets set. Fourthly, the concern uses internal people as a key election in meeting the tasks set. Fifthly, different managers reflect different types of styles in meeting the same objectives. Sixthly, the management needs to share the objectives and policies of the concern with the employees to coordinate the actions taken. Seventhly, the skills of the people need to be enhanced in meeting end objectives effectively and successfully (Bhattacharya, 2011, p.333-334). McKinseys 7S Framework is reflected in the following diagram. plan 1(Bhattacharya, 2011, p.334)The attributes of the model would be used to analyse the internal environment of Thomas Cook for they help in setting a paradigm by dint of which the organisational manager gains the potential in drawing the attention of the employees in meeting end objectives.StructureThe organisational structure of Thomas Cook is found to be vertically coordinated with a top-down management structure. Thus decisions are commonly taken by the board of directors and higher management body of the concern and percolated downwards to different organisational levels. However in recent times, Thomas Cook is observed to take stamping ground of a global outsourcing strategy to transfer the finance and accounting services in t he hands of outsourced teams to help in cost reduction and organisational productivity (Banham, 2005).SystemsThomas Cook works based on an integrated business model incorporating the blueprint of both individual and packaged tours and also assisting the consumers in terms of support and insuring their tour activities. besides, the company works in gaining an enhanced consumer base through carrying out its operations via retail marts and also through the online base. Thomas Cook trains its staffs to render effective customer services acting on such planes (Thomas Cook, 2011, p.13).StyleThe management style at Thomas Cook firstly works in encouraging the festering of organisational diversity in terms of employing people pertaining to different ethnic backgrounds, sex and age differences. Secondly, the management style in the concern promotes growth and promotion based on merits and performance parameters and thereby restricts the practice of unlikeness in the workplace (Thomas Co ok, n.d.).StaffThe organisational management works in effectively recruiting a talented and knowledgeable workforce in the concern. Having recruited a talented and multi-skilled workforce the management works in motivating the people and effectively integrating training them to fulfil the needs of the concern (Thomas Cook Group plc-b, 2011).SkillsThe skills of the internal people are enhanced by Thomas Cook through the incorporation of effective training and performance management programs. Feedback is generated to the employees based on performance appraisal systems to help them address the drawbacks. In 2011, the company invested around 9.9 million pertaining to the training segment (Thomas Cook Group plc-c, 2011).StrategyThe core business strategy of Thomas Cook is to train its employee base to render value-additions to the service parameters pertaining to the category of independent travel. Further, the management also desires to enhance the financing and business development pa rameters of the travel related services framework to augment the customer satisfaction experience (Thomas Cook Group plc, 2012).Shared ValuesThe higher management body of Thomas Cook works on the basis of transmitting potential information pertaining to business and strategic value to the employees pertaining to different levels. Through the above function the company management desires to work as a single unit in helping to achieve end goals effectively (Thomas Cook Group plc-d, 2011).Leadership Style of Thomas CookAdair (2011) states that leaders style pertaining to an organisation gains effect such that where different individuals and groups are employed to help in achieving a desired task. Herein, the manager is inevitable to divide the entire task among groups and individuals and thereby to monitor and evaluate their performance levels in helping to meet the objectives taken (Adlair, 2011, p.92-93). The same bottom of the inning be represented through the following illustrati on.Figure 2(Adair, 2011, p.92) task one-on-oneTeamThe leadership style of Thomas Cook reflected that it works on a task based model where decisions taken by higher management are percolated through the management hierarchy along different levels.TaskIndividualTeamIdeal leadership style of Thomas Cook would be where the task is uniformly matched with team and individual pursuits. However, the same is difficult to implement for it means a complete restructuring of the organisational structure.TaskIndividualTeamThus the ideal style would be to delineate and percolate the entire organisational task along different layers while at the same time encouraging the development of individuals and teams by incorporating them in decision making functions.Organisational Structure of Thomas CookThe organisation structure of Thomas Cook is reflected in Figure A in the Appendix section. Headed by the Board of Directors the company is run by different committee bodies looking after finance, health an d safety, auditing and disclosure functions and similar other departments. These committee bodies report to the body of Directors. Similarly the different segments and functions of the company are governed by different boards which are linked therewith other region heads serving different markets (Thomas Group Plc-a, 2012).Human Resource Systems in Thomas CookInductionThe institution program of Thomas Cook helps in introducing the people to the procedures and policies of the company. It also helps in providing guidance to the students regarding aspects of value and culture of the company. Moreover, a buddy is rendered with the apprentices who introduce the aspirant to the task to be performed at different levels along with the values of the company. Effective survey is conducted based on the apprenticeship program where feedback is gained from them to be used for further developments in the innovation training rendered. Again, the apprentices are also rendered specific electronic learning modules to enhance the knowledge of the employees in the light of modifications and developments (People 1st, 2011).AppraisalThe company conducts effective performance appraisal programs of the people pertaining to different levels in the organisation. Performance reviews of the people in the concern are conducted on an annual basis and feedbacks are generated to the people on that behalf. phylogeny of the people is done through involving them in training programs where the skills sets are honed to meet drawbacks (Thomas Cook Plc, 2010).CommunicationInternal communication is practiced in Thomas Cook through the holding of meetings by the board of directors of the concern every year on timely schedules. In addition to the scheduled meetings the directors are also responsible for conducting of other additional and supplementary meetings as and when needed by the company. It is observed that on a general note the board of directors holds around 9 scheduled and 10 other addit ional meetings in the company (Thomas Cook, 2011, p.45).IncentiveA host of financial and other incentives and amenities are rendered to the individuals by the organisation so as to effectively retain a productive and highly skilled workforce. The range of benefits rendered range from holiday packages, to shopping discounts and also other insurance and other leave related benefits. Moreover the workplace is do advanced in terms rendering flexible working hours to help the people work more productively.Areas of Development in Thomas CookStructural ParadigmPertaining to the structural paradigm the introduction of decentralisation in the organisational ambit has required the company to incorporate information technology infrastructure in the designing of data centres in different regions (Chillingworth, 2010).Leadership Style ParadigmThe managers of Thomas Cook are required to adapt to changing situations through training programs rendered based on change leadership models. Similarly , the management skills are honed through incorporation of tenets pertaining to emotional intelligence and qualities to manage stress in the workplace (People 1st, 2008, p.3).Systems ParadigmPertaining to operation systems and procedures the company is focal point to enhance its relationship with the consumers through augmenting their safety paradigm and suppliers alike hotels and air services on an enhanced scale. Moreover the company is also working for promoting a safer and healthier environment through evaluation of carbon footprint (Thomas Group Plc, 2009).Plan of Development in Thomas CookKotters eight-spot Step ModelThe analysis of the plan of development in Thomas Cook is conducted based on the Eight Step Model presented by John P. Kotter of Harvard. The first three steps focus on analysing external changes, modifying the fancy and thereby aligning teams to incorporate the change process. The subsequent three steps focus on implementing the change process through effecti ve communication, empowerment of individuals and motivating people through short-run wins. Finally, the seventh and eight steps focus on sustaining the change rendered and enhancing the impacts of the change through modifications (Kotter, 2006, p.4). The same can be shown in the following illustration.Figure 3 Kotters Eight Step replace Process(Kotter, 2006, p.4)Change Process in Thomas CookFirstly, the company management take ind the urgency in gaining hits from the market. Secondly, a team was created through replacements and promotions rendered in the executive body to incorporate the change. Thirdly, a new vision was created focusing on reducing costs, redesigning its organisation structure and enhancing its existing brand image (Linder, 2004, p.114).Fourthly, the management endeavoured to share the vision gained with the employees involved at different levels. Fifthly, employees were empowered to take individual decisions while rendering services to the consumers. Sixthly, a reward system was brought out to effectively motivate the employees to enhance the service quality (Srinivasan, 2009, p.280).Seventhly, the company focuses on gaining hold of talented and effective people that would help the concern achieve its set goals. Communication along the lines is enhanced through holding of training and interactions on a two- appearance level. Finally, new leadership policies and procedures are brought about by the company management to motivate the people to work in a productive fashion (Thomas Cook, 2010, p.40).External Environmental AnalysisNo organisation tends to exists in vacuum as distributively of the organisations is come toed by the external environment. The external environment refers to the context in which organisation promotes, provides and also distributes its services. In maximum number of cases, the organisation doesnt constitute control or has limited control over the environmental factors. According to Rubrigt and MacDonald (1981), if any of the organisation faces weakness it would become the tendency of the organisation to overlook the hazard or the obstacles in the market place, also the external environment (Winston, 1985, p. 45).Process of Environment Monitoring in Thomas CookWith a wide range and scale of environmental impacts across the business of Thomas Cook, the operating companies tend to coordinate the performance of the environment locally under the banner of Group Environmental Policy. Thomas Cook is committed in reducing the impact of the environment by way of defend the environment and the resources and the business usually depends on safeguarding the wildlife, biodiversity and also animal welfare.Market research In order to monitor the upcoming challenges and trends of the consumer Thomas circumvent can conduct market research based on the needs of the customers. As the disposable income intensify, there arise a shift in the mindset and olibanum it is required to introduce and act accordingl y the customers expectation. Thus doing a proper market research would help the travel agency to stay ahead of its competitors. The company can make a page and share it in social networking sites to get feedbacks about the new schemes and can alter accordingly.Demographic Thomas Cook is a closely known and the oldest travel agency and thence the customers are attracted towards it because of the reliability and experience. Thomas cook can expand its stores where most number of customers visit to attract even more customers.Benchmarking Thomas Cook has benchmarked the employee satisfaction. The company believe that employee who is engaged tends to perform better which leads to satisfied and loyal customers. Thomas Cook has compared separately of the business segments through an employee survey and the rate of response was 64% in the year 2009. As per the survey in 2009 the engagement index was 3.74 as compared to the benchmark index of 3.67 (Thomas Cook Group Plc, 2009).Trade taki ngs Thomas Cook pocket guides covers about 170 destinations and at the same time compact and applicative guide for the sun seekers and also for the city breakers. Other guides available for the travellers include driving guides, travellers guide and others. belatedly Thomas cook has launched Canadian website which is a conjunction with rebranding of all the retail locations of Thomas Cook across Canada (Travel Trade, 2012).Scenario Planning Thomas cook has acquired other travel agents in order to stay agonistic in the travel agency sectors.PEST Analysis of Thomas CookPEST Analysis is mainly used to scan the environment. PEST refers to political, economical, social and technological factors (Henry, 2008, p. 41). Thus Pest is used to analyses and scans the general environment meet Thomas cook. It is through PEST that the company will be able to detect as easily as monitor the weak signals in order to recognise the fractures which shape the environment.Political FactorsThe UK trav el and tourism industry has faced immense pressure from the government as it has introduced tourism taxation and has give tongue to to affect all the travel and tourism business including Thomas Cook. The travel agents had opposed to the proposal of bed tax which the government had levied 1 per head per night from the visitors staying in the local hotels. The proposed bed tax is said to accession the domestic price and keep the foreign visitors from holidaying in UK (The Guardian, 2012). The potential tax of about 5% to 10% would make England the proposed bed tax is said to increase the domestic price and keep the foreign visitors from holidaying in UK (The Guardian, 2012). It is one of the highest taxed holiday destinations in whole of Europe (BHA, 2012). Thus with the rise in tax, business like the local shops, the restaurants and the travel agencies are said to be affected.Economic FactorsDuring the past few years the tourism sector have faced hard times due to challenging eco nomic times and have largely impacted the global travel market but however there are signs of recuperation within the consumers. The travel and the leisure sector were impacted mainly due to the consumers disposable income, unemployment rate, grippectuation in the rate of currency and the vegetable oil price. All these drives have hugely impacted the travel and leisure industry. The gross domestic product declined by 6% in the year 2009, the rate of unemployment has increased to about 2%, the price of oil continued to be highly volatile. In addition to the above factor, there are other factors which have impacted the global travel market. Global terrorism has impacted the confidence of the consumers from travelling along with the swine flu in Mexico which had similarly affected the travel planes along with an increased taxation the economic conditions seems to get worst. thereof due to these challenging economic conditions, the travel market over the past few years has signific antly declined in the travel market (Thomas Cook Group Plc, 2009).Social FactorsThe parsimony of UK is one of the strongest economy in Europe where the disposable income of the consumers are at a rise and thus the expenditure made on leisure is growing at about 6% and thus has higher level of expectation from the travel and tourism sectors. Most of the people will at least go for one holiday to abroad, thus increasing the demand of the travel and tourism industry. In addition one of the important markets in travel and tourism is the grey market which mainly comprises of older people who are healthy and fit and as such has plenty of time along with funds to spend on travelling (Pearson School and College, n.d, p. 11). scientific FactorsTechnological factors refer to the use of internet which has allowed the people the opportunity to become much more independent and make plans according to their desire. Thomas Cook aims to be among the top online service provider and it can be done through modified and advanced technologies.Analysis of the Competitive Environment of Thomas CookThe competitive environment is analysed in order to describe the nature of the following attributes. As the environment keeps on changing distributively of the listed attributes becomes more or less attractive in order to achieve profitable growth rate. Thus the competitive environment of Thomas Cook has been analysed.Figure 4 Attributes in the Competitive Environment(Source Bigler Norris, 2004, p. 81)DiversityThe Thomas Cook Group is committed to provide a workplace which is free from discrimination and that supports diversity. Not only is it beneficial to the employee but also to the company in having a diversified workforce. The organisation provides employee training and monitors the diversity among its employees. Diversity is key strength of Thomas Cook and is an essential part of the business. The company operates in bout 22 countries and thus employs people from different backgr ounds and cultures. A diverse workforce tends to create a dynamic as well as innovative culture of the company (Thomas Cook Group Plc-a, 2011). (Refer Appendix A)RivalryRivalry is high among the leisure industry as with the rise in the disposable income people are spending more amount of money on travelling which has led to the development of many tourism and travel agencies. As a result Thomas Cook also faces disceptation from other travel agencies such as American Express Company, Carlson Wagonlit Travel and Holiday break plc (Hoovers, 2012).BuyersThe buyers are not give many options to choose from, by the company and thus they need to finalise from the given set of options and thus it can be said that the class of power of the buyers are low.HostilityThe degree of hostility is low to moderate in case of tourism industry. The travel and tourism agencies face from cutthroat competition but they do not declare an open war with respect to price. The marketing strategy adopted by the Thomas Cook and its competitors are almost the same to attract the customers. The companies compete with each other in all the aspects but do not declare open price wars with the competitors.monetary value of EntryThe cost of entry into the travel and tourism industry is relatively moderate to high. The capital demand is usually high and thus creates a high rate of barrier for the new entry in the tourism sectors. Also the market share is occupied by the top leaders in the market and therefore it becomes hard for the new company to form a brand image and acquire a decent market share to compete with the already established firms. Brand recognition also acts as a barrier to the new entrant.FragmentationThe degree of fragmentation is high among the travel and tourism industry. Thomas Cook remains highly fragmented as it had the opportunity to achieve the top three market position. Thomas Cook has targeted gross booking with value of about 3.5bn (Thomas Cook Group Plc-b, 2010).Turb ulenceThe travel and tourism industry suffers from unpredicted variance and thus the turbulence is also high. With economic downturn and other related factors the tourism industry tends to gets affected to a very large extent and it increases the rate of turbulence.SWOT Analysis of Thomas CookSWOT analysis is mainly used by organisation as strategic planning and usually refers to the identification of the strength, weakness along with the opportunities and threats of the organisations. SWOT is conducted to know about the internal as well as the external environment of the company and act accordingly. SWOT Analysis of Thomas Cook will enable the travel group to know its strength and overcomes its weakness and through opportunity overcome the threats.StrengthThomas cook has a strong brand name and image and is one of the leading leisure travel agencies in the world. It offers various package tours and other holiday components and other services. The group has recorded revenue of about 9, 808.9million during the financial year 2011 The company has managed to show an increase of about 10.3% from the previous financial year 2010 (Research and Markets, 2012). The group continues to build upon the strengths which the company has created over the years which include strong financial position, trusted brand portfolio and the ability of the company, with its flexible model, to manage the business so that the group is able to meet the needs of the customers in the future (Thomas Cook Group Plc-c, 2009).WeaknessOne major weakness lies is that with a economic slowdown the travel agencies have experienced a huge break down in the number of consumers travelling from one place to another. This has impacted Thomas Cook Group.OpportunityWith a rise in the disposable income of the consumers a huge opportunity lies with Thomas Cook to expand itself into various other countries and help the consumer experience the pleasure of travelling. Technology being an upper hand for the trav el agencies, the online market is said to flourish which makes it easier for the consumers to select from various options made available from the travel agencies.ThreatThreat lies from the other competitors which has been doing as well in the travel and tourism sectors. With many travel and tourism agency, the customers gets a wide admixture to choose from the best options and this tends to increase the competition among the travel and tourism industry. Also shift in the consumer behavior also poses a threat for Thomas Cook.Major Challenges of Thomas CookThomas Cook has been go about some tough challenges which include financial consolidation as well as restricting. The CEO of the company, Manny Fontenla-Novoa resigned which took the company as a surprise. Another set of challenges is the growth of the company through acquisition. Growth by way of acquisition was one of the core strategies together with strict cost in order to improve the profit margins. In recent years Cook ha d sealed its market entry in Russia by a majority of stake in tour business operator. But at the same time, both internal as well as external problems have increased in Thomas Cook and it becomes a huge challenge for the company to undergo its operation when the environment is not healthy. The demand has slowed because of the weak economy of UK and also its strong focus on cost cutting, UK invested little in IT and product which left Thomas Cook positioned poorly in the market (FVW, 2011). The oldest travel agency has also seen a drop in summer holidays by about 10% which is one of the core businesses of Thomas Cook of sending the families off to destinations like Balearics and Canaries. The shares of Thomas Cook have also slumped to about 86% but still many of the problems of the company tend to persists (Moulds, 2012).ConclusionsThomas Cook is one of the most successful travel agency which meets the travel need of the customers. Thomas Cook is the leading travel groups with flexib le business model and also focussed strategy and has a team of more than 31000 people who are equally committed towards the vision of the company. It can be said that the company has been performing well in the financial year and plans to do well in the near future but with changing market environment along with the demands and needs of the customers Thomas Cook needs to adapt to new technologies and serve or provide its customers with the wants and requirements. Thomas Cook has been facing few challenges as mentioned and it should take the necessary steps to avoid problems which could hamper the