Business Decision Making

This document discusses the process of business decision making and its importance in the growth of a leading tour operator. It covers topics such as data collection, survey methodology, analysis techniques, and more. The document also includes a questionnaire for conducting a survey and analyzing the results.

BUSINESS DECISION-
MAKING

Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1..............................................................................................................................................3
1.1 Plan for the collection of primary and secondary data.........................................................3
1.2 Survey methodology and sampling frame.............................................................................4
1.3Designing a questionnaire to carry out the survey................................................................4
TASK 2..............................................................................................................................................6
2.1 Creating information by summarizing the raw data in spreadsheet.....................................6
2.2 Analyzing the results to aid in solid decision-making with regards to the market...............7
2.3 Analysis of the data using measurement of dispersion to develop the new tour................8
2.4 Explaining the use of quartile, percentile and correlation coefficient..................................9
TASK 3............................................................................................................................................10
3.1 Graphical presentation and charts......................................................................................10
3.2 Create a trend line in spreadsheet and its use to forecast demand for 2017 & 2018........11
3.3 Preparing a business presentation based on your analysis.................................................12
3.4 Produce a formal business report for the proposed new product development initiatives
...................................................................................................................................................12
TASK 4............................................................................................................................................13
4.1 Use of appropriate information processing tools...............................................................13
4.2 Preparation of a project plan using appropriate software..................................................14
4.3 Use of financial tools to take viable investment decisions.................................................14
CONCLUSION.................................................................................................................................15
REFERENCES...................................................................................................................................17

INTRODUCTION
In the competitive corporate scenario, businesses success is greatly depends upon the
solid, rationalized and effective quality of business decisions. Before making any decision,
managers are responsible to search out all the possible solutions and analyze each & every
alternative to select the best course of alternatives or actions to combat hurdles and fuel growth.
The thrust of the current research is to investigate the effectiveness of business decisions in the
growth of a leading tour operator, TUI Group. It is a multinational tour operator which design
luxurious tours for providing the best leisure services, accommodation, hotels, airlines, cruises &
others for giving the best holiday experience to the visitors. It has gained a strong brand
popularity in the market by delivering the exceptional quality offerings to the visitors and
currently, it is looking to introduce a new tour package for attracting crowd audience. Thus, the
report will gather data by surveying 90 customers and other secondary source. However, analysis
will be made by employing statistical tools & techniques like central tendency, dispersion &
correlation-coefficient.
TASK 1
1.1 Plan for the collection of primary and secondary data
TUI Travel Group is looking to bring a new tour product in the market and for which, it
is require obtaining a multitude of information which can be collected by two sources,
enumerated underneath:
Primary source: The first-hand or highly-fresh materialistic information can be obtain
by the researcher using primary source i.e. survey, field observation, interview, questionnaire
and others. The obtained information from these sources are highly-realistic and considered
reliable, authentic and valid because researcher himself gather it from the respondents
(Solomon, 2014). Thus, it is decided to organize a web survey wherein participants will be
invited to participants in the survey on their free consent for providing their responses to
examine their preference and perception towards the new tour product offering.
Secondary source: It is just inverse source to the opposite wherein TUI Group marketer
will not have to carry any real survey and can use other’s reports, library sources, published
articles, research papers, useable industrial statistics, TUI’s annual financial reports and other
online material (Poussaint and et.al., 2016). For assessing the business performance, it is
decided to make a secondary analysis of sales and profit of TUI Group over last one decade.
The data about the same will be gather from the official website or any other web source.

1.2 Survey methodology and sampling frame
As decided earlier, TUI Travel Group will organize a web survey, in which, consumers
will be the respondents and all of them are invited to take voluntary participation. The desired
candidate will be ask with several questions, open and close-ended upon which they will provide
their responses and opinion and enable the tour operator to make better planning to launch
successfully the new tour product. The best advantage of the survey is privacy & confidentiality
promote & encourage the participants to give authentic views and help the firm in solid planning.
Moreover, questionnaire which design various question will take very few minutes in fulfilment
and gather required and necessary information.
TUI is UK’s leading outbound tour operator whose consumer base is spreaded all over
the world, therefore, it is too difficult to survey everyone on web, and therefore, a sample (group
of people) of 90 current visitors has been chosen using simple random sampling technique free
of biasness (Babajana and Phillips, 2016). The questionnaire will gather both the qualitative
aspect information like individual choices, preferences and demand and quantitative data like
information about prices & others. With the help of this, tour operator will be able to make solid
plans and decisions for effectively introduce the new tour product.
1.3Designing a questionnaire to carry out the survey
QUESTIONNAIRE
(Provide authentic and valid information, it is highly secured and will not be disclosed by
maintaining full confidentiality)
Demographic information:
Locality:______________________________
Age:__________________________________
Annual income: ______________________
Occupation:_____________________________
Q.1: What first comes in your mind when decides to travel?
 Leisure
 Meeting friend, family and relatives
 Business meeting
 Employment
 Other (Kindly specify)
Q.2. Based on your experience, how well TUI’s travelling services and tour packages has

satisfied your tour requirements?
 Extremely well
 Very well
 Average
 To some extent
 Not satisfied at all
Q.3. Which is the most influencing factor that you consider before others while booking tour
package?
 Luxury hotel
 Cheaper price
 Attractive discounts
 Sightseeing
 Other (Please specify)
Q.4. In which kind of the tour, you wants to visit?
 Business tour
 Escorted tour
 Inclusive tour
 Independent tour
Q.5. Which of the tour you often prefer?
 Inbound tour package
 Outbound tour package
Q.6. Do you think that TUI Travel Group must introduce new tour packages to provide unique
travelling experience to the visitors?
 Yes
 No
Q.7. What prices ranges you might be ready to pay to the TUI for enjoying the memorable
travelling experience?
 Less than £500
 £500-£800
 £800-£1100
 Above £1100

Q.8. What features will you demand in the new tour product offering of TUI?
 World class hotel
 Cruise ships
 Reasonable price
 Easier access
 Attractive tourist destinations
 Other (Please specify)
Q.9. Which of the following has a greater impact on your buying decisions?
 Marketing
 Discounting offers
 Word of mouth publicity
 Social-media advertisement
 Others (Please specify)
Q.10. How do you book the tour packages at TUI?
 Telephone conversation
 Online
 Any one
Q.11. Let us know the biggest rivalry of TUI Group?
 Thomas Cook
 Cox and Kings
 Thompson Holidays
 Other (Please mention)
Q.12 Give us the valuable suggestions to come with the best and unique tour package?
___________________________________________________________
TASK 2
2.1 Creating information by summarizing the raw data in spreadsheet
Representative values are used in the statistical analysis to make an idea about the entire
data series. The most important central tendency measures for the measurement of representative
values are presented below:
Mean: It is also called average which is the most effective measurement of central
tendency which is computed by adding the sum of total values divided with the total number of

items (Zhang, 2016).
Mode: It is the highest frequency incurring value which has been reported in the data set
for a number of years.
Median: It is different from the mean which divides the data set into two equal parts by
finding out the 50% value, one group’s value are above the median and another is below the
value (Zheng and et.al., 2016).
Year
Revenue (In Euro
Mil)
Profit (In Euro
Mil) % change % change
2007 20514 -890
2008 21865 236 6.59% -126.52%
2009 18631 -142 -14.79% -160.17%
2010 16350 101 -12.24% -171.13%
2011 17480 23 6.91% -77.23%
2012 18330 -15 4.86% -165.22%
2013 18478 -11 0.81% -26.67%
2014 18715 105 1.28% -1054.55%
2015 17516 340 -6.41% 223.81%
2016 17184 1037 -1.90% 205.00%
Total 185,063 784
Average sales = 185,063/10 years= 18,506.3
Average profit = 784/10 years = 78.4
Median = (N+1)/2
= (10+1)/2th item
= (11/2)th item
= 5.5th item
= (18,330+18,478)/2
= 18,404
Median profit = (23+101)/2
= (124/2)
= 62
Mode – Not exists
2.2 Analyzing the results to aid in solid decision-making with regards to the market
From the results founded, it is presented that TUI Travel group’s average annual sales
income is computed to 18,506.3, however, looking to the current sales value, it is founded lower
than average which is a sign of poor business performance. However, average return is reported

very less to 78.4 Euro million and currently, its actual return worth 784 is far greater than the
mean profit.
However, the median (M) of both the sales revenues and net earnings are founded 18,404
and 62 Euro million which showcase, that current sales of the business is below half of the sales
whereas profit is founded high (Zheng and et.al., 2016). In contrast to this, in every year,
performance shows a volatile trend both ups and downs therefore, in none of the year, similar
level of sales & profit is generated, thus, there is no mode exists in the data set.
2.3 Analysis of the data using measurement of dispersion to develop the new tour
Range = Highest – Lowest
Sales = 21,865 – 16,350
= 5,515
Profit = 1,037 – (-890)
= 1927
Year
Revenue (In Euro
Mil) DX = X-A DX^2
Profit (In Euro
Mil) DX = X-A DX^2
2007 20514 3034 9205156 -890 -913 833569
2008 21865 4385 19228225 236 213 45369
2009 18631 1151 1324801 -142 -165 27225
2010 16350 -1130 1276900 101 78 6084
2011 17480 0 0 23 0 0
2012 18330 850 722500 -15 -38 1444
2013 18478 998 996004 -11 -34 1156
2014 18715 1235 1525225 105 82 6724
2015 17516 36 1296 340 317 100489
2016 17184 -296 87616 1037 1014 1028196
10263 34367723 784 554 2050256
Standard deviation = √∑DX^2/N – (∑Dx)^2/(N)^2
Sales = √34367723/10 – (10263)^2/(10)^2
= 1543.85
Profit = √2050256/10 – (554)^2/(10)^2
= 449.3956
Finding the outcome of the dispersion statistics, it is clear the range is founded greater in
sales data to 5515 thus, this dataset has more spreadness or scattered. However, profitability
range is comparatively less to 1927 indicates less spreader. Range quantifies dispersion using
only highest and lowest values thus, the results are highly affects by the extreme values,

therefore; standard deviation is a better way of dispersion which find out difference between
each value from the average to find out the scatter (Poussaint and et.al., 2016). The sales figures
reported St. dev. of 1543.85 which is very high from St. dev. under profit series of 449.39 thus,
series one has more variability at high dispersion. Changing the consumer attitude & luxurious
holiday choices is the main reason behind the volatile sales income of TUI Group. Thus, it is
suggested to the tour operator to introduce a unique tour package to attract more visitors from
both the home and foreign countries and thereby stabilize the revenues.
2.4 Explaining the use of quartile, percentile and correlation coefficient
Quartile distribute the entire given data series into 4 parts presenting 1/4th of the series
whereas every percentile gives the value that falls under a specific percentage of observation
(Howell, 2016).
Quartile Percentile sales Profit
Q1 P25 17489 -14
Q2 P50 18404 62
Q3 P75 18694 203.25
Q4 P100 21865 1037
Interpretations: Above results presents that Q1/25%, Q2/50%%, Q3/75% and Q4/100%
for sales and profit figures are derived to 17,489, 18,404, 18,694 and 21,865 euro million.
However, with reference to profit, it is computed to -14, 62, 203.25 and 1037 Euro million.
Year Revenue (In Euro Mil) Profit (In Euro Mil)
2007 20514 -890
2008 21865 236
2009 18631 -142
2010 16350 101
2011 17480 23
2012 18330 -15
2013 18478 -11
2014 18715 105
2015 17516 340
2016 17184 1037
Correlation-coefficient -0.42323
Generally profit follows a positive relationship with the sales revenues. However, as per
the current data base, TUI’s revenue and profit reported a negative relationship to -0.42. It is
reported very low level of strength or relationship between both the elements and stated that with
the higher sales incoming, TUI’s profitability resulted drop or vice-versa (Pettigrew, 2014). It

may be possible like for instance, high booking of the hotel may raise the cost of accommodation
and results in less yield.
TASK 3
3.1 Graphical presentation and charts
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-5000
0
5000
10000
15000
20000
25000
TUI's sales and profitability
Revenue (In Euro Mil) Profit (In Euro Mil)
Year
Amount (In Euro million)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
-5000 0 5000 10000 15000 20000 25000
TUI's sales and profit
Profit (In Euro Mil) Revenue (In Euro Mil)
Amount (In Euro million)
Year

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-5000
0
5000
10000
15000
20000
25000
TUI's sales and proffitability
Revenue (In Euro Mil) Profit (In Euro Mil) Year
Year
Amount (In Euro million)
Findings and analysis: Looking to the constructed graphs, it can be seen that in 2008,
TUI’s sales revenues goes up by YOY growth of 6.59% to 21,865 Euro million. However,
thereafter, it shows a declined trend because in 2009 & 2010, the income has resulted down by
14.79% and 12.24% and came to 18,631 and 16,350 Euro million. Declined trend in the
consumer demands, tough level of competition, and availability of tour packages at discounted
prices, price sensitive visitors etc. may be the several reasons behind declined sales revenues
(TUI’s financials, 2016). However, after this, TUI witnessed positive growth at a YOY growth
by 6.91%, 4.86%, 0.81% and 1.28% respectively. In past 2 year, it came down to 17516 and
17184 Euro million by 6.41% and 1.90% due to tough competitive rivalries and changes in the
visitors tour choices. However, on the other side, profit figures shows a continuous volatile trend
because in 2009, TUI’s operation reported loss of 142 Euro million and then in next year, it
reported favorable profit of 101 Euro million and after continuously decreased till 2013 and
came to 11 Euro million. In the ending two year, it had spotted positive performance at profit has
been reported to 340 & 1037 Euro million respectively.
3.2 Create a trend line in spreadsheet and its use to forecast demand for 2017 & 2018

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
-5000
0
5000
10000
15000
20000
25000
f(x) = − 319.751515151515 x + 20264.9333333333
R² = 0.353889394298006
f(x) = 114.739393939394 x − 552.666666666667
R² = 0.537800677725505
TUI's sales and profitability
Revenue (In Euro Mil) Linear (Revenue (In Euro Mil))
Profit (In Euro Mil) Linear (Profit (In Euro Mil))
Findings and analysis: Looking to the above graph, it can be seen that sales trend line
present downward trend which projected for the sales performance to be decline in the near
future. It is because, historical trend performance of the TUI Group indicates up and downs, as a
result, the projection also founded to be decrease in the sales for the upcoming period (TUI’s
financials, 2016). Similarly, profit is also expected to be drop down in the future from the current
level of net earnings, it has been forecasted below:
Y = -319.75x+20265
2017 = 319.75(11) + 20265 = 16,747.75
2018 = -319.75(12) + 20265 = 16,428
Y = 114.74x – 552.67
2017 = 114.74(11) – 552.67 = 709.47
2018 = 114.74(12) – 552.67 = 824.21
3.3 Preparing a business presentation based on your analysis
Enclosed in power point presentation
3.4 Produce a formal business report for the proposed new product development initiatives
To: TUI Group’s board of directors
From: Management consultant
Date: 2nd May 2017
Subject: Business performance analysis
From the findings of the analysis of the last decade’s results, it is reported to the board
members that the sales records does not show progressive growth and shows many ups and

downs due to change in the consumer attitude and preferences towards their holiday tour
planning. Further, in the external market, competitors such as Thompson Holiday and Thomas
Cook offerings also have a strong impact on the buying decisions of the consumers. As a result,
till 2010, sales reported downward trend then till 2014, it showed progress but again at the end, it
dropped by 1.90%. Thus, from the historical financial report, it has been analyzed that TUI faced
financial problems & competitive rivalries during past years. Likewise, profit also reported the
volatile trends, but in the last two years, it showed improvement in the net earnings as it came to
340 and 1,037 Euro million which is a sign of improved yield.
Besides this, the historical trends has been utilized to predict the possible change in the
upcoming years and the results founded that in the next two years, 2017 & 2018, both the
revenues & profit will be decline results adverse changes. Less demand, high price-sensitiveness,
excessive cost, high service prices by the suppliers may be the key reasons behind adverse trend
in the performance. Thus, on the basis of it, TUI Travel Group can be suggested to create the
unique and innovative holiday packaging for providing the exceptional tour experience to the
travelers’ at the most attractive tourist destination over the world. Thus, new product offerings
will be really beneficial for the business to gain larger audiences and thereby maximize the
performance.
TASK 4
4.1 Use of appropriate information processing tools
Different types of tools which TUI’s strategic, tactical and operational level team can
utilize for disseminating information effectively & efficiently are presented here as under:
Executive information system: Strategic level managers and policy formulators of TUI
Travel Group can get assistance of EIS to easily access the required information about any
operational area & use it to make right decisions and suitable policies for fuelling growth.
Management information system: Departmental managers can use MIS for recording,
integrating & summarizing the big dataset into meaningful statistics in the way of report which
they can analyze & examine to make viable and successful growth plans (Laudon and Laudon,
2011).
Transaction processing system: This system gains importance for the tactical level
where accounting and other non-accounting information is recorded in the system by the TUI’s
personnel which is then processed by the system to provide a summary of key statistics by easily
accessing the reports and aid in business decisions (Link and et.al., 2017).

4.2 Preparation of a project plan using appropriate software
Task Name Duration Start Finish Predecessor
s Total Slack
Preparing a plan 2 week Thu 4/27/17 Fri 4/28/17 0 week
Design questionnaire and
selection of respondents 4 week Mon 5/1/17 Thu 5/4/17 1 0 week
Data gathering 6 week Fri 5/5/17 Fri 5/12/17 2 0 week
Data analysis, findings and
interpretation 3 week Mon 5/1/17 Wed 5/3/17 1 7 week
Conducting a market research 6 week Fri 5/5/17 Fri 5/12/17 2 2 week
New tour product planning 1 day Mon 5/15/17 Mon
5/15/17 5 2 week
Testing in target market 3 week Mon 5/15/17 Wed
5/17/17 3,4 0 week
Final launch 2 week Thu 5/18/17 Fri 5/19/17 6,7 0 week
Gantt chart:
Network diagram:
Results: Critical path or duration of the framed project plan is founded to 2+ 4 +6 + 3 + 2
= 17 weeks. Thus, in order to launch the new tour product in the market, TUI Group needed a
time duration of 17 weeks (Heagney, 2016).
4.3 Use of financial tools to take viable investment decisions

Investment decisions is a major area of financial decisions which must be taken after
making proper analysis of the strength & weakness of the particular long-term investment
project.
Payback period is a non-discounting way of assessing project viability by quantifying the
required duration in getting back the initial outlay (Dellavigna and Pollet, 2013).
Net present value is the discounted method wherein the future cash flows must be
discounted to reflect their current worth and then the excess of it over the beginning cost is
reported as NPV (Herbener and Rapp, 2016).
Internal rate of return method just identify the interest rate at which break-even exists
means no profit no loss at zero NPV.
Year
Cash
flow
Cumulative cash
flow
DF @
7%
DF @
10%
DCF @
7%
DCF @
10%
Initial
investment -150000 -150000 1.0000 1.0000 -150000 -150000
2017 32000 -118000 0.9346 0.9091 29906.54 29090.91
2018 48000 -70000 0.8734 0.8264 41925.06 39669.42
2019 67000 -3000 0.8163 0.7513 54691.96 50338.09
2020 83500 80500 0.7629 0.6830 63701.75 57031.62
2021 94000 174500 0.7130 0.6209 67020.70 58366.60
27% NPV 107246.01 84496.65
Payback period = 3 year + (3,000/83,500)
= 3.04 year
IRR = LR + (NPV at LR)/(NPV at LR – NPV at higher rate) *(HR – LR)
= 7% + (107,246.01)/(107,246.01-84,496.65)*(10%-7%)
= 7% + 107,246.01/22,749.36*(10%-7%)
= 7% + 107,246.01/22,749.36*(3%)
= 21.14%
From the outcome, it is seen that at 7% & 10% DF, NPV is founded favorable to
107,246.01 and 84,496.65 respectively. However, on the other side, the prospective project will
recover its beginning investment within a period of 3 year 5 month (3.04 year). Besides this, IRR
to 21.14% also exceeded the cost of capital of 7% & 10% and reported indicates that the project
is of viable and worthwhile choice hence, TUI can undertake it.
CONCLUSION
The above study concluded that the historical results did not reflect an impressive

performance of the TUI Group regarding both the sales & profit data. Moreover, volatile
consumer attitude, preference and demand has brought considerable fluctuations in the data set
from the average at high dispersion. Further, project plan founded that new tour product offering
will require minimum 17 weeks means more than 4 months and lastly, investment project is
founded as a viable choice thus, it should be accepted by TUI Travel Group.

REFERENCES
Books and Journals