Analysis on Failure of Thomas Cook Report 2022

Running head: ANALYSIS ON FAILURE OF THOMAS COOK
Programme Title
Module Code and Title
Analysis on Failure of Thomas Cook
Student Details

ANALYSIS ON FAILURE OF THOMAS COOK1
Executive Summary
This report has discussed about the macro and microeconomic factors that led to the failure of
Thomas Cook in the UK. The report focused on the main causes such as inability to adapt to the
new technological changes that occurred in the country especially in the concerned industry.
Other than that continuous loss and debt burden, external factors like Brexit and competition
from rivals aggravated the condition of Thomas Cook. Therefore, with induced effect and series
of disastrous situation ceased the failure of Thomas Cook. However, it has been recommended
that if the company had not took the decision such as merger with My Travel Group and staying
traditional then it might have survived.

ANALYSIS ON FAILURE OF THOMAS COOK2
Table of Contents
Economic Impact on Business Organizations.................................................................................3
Impact of micro and macroeconomic factors on Thomas Cook......................................................5
Background..................................................................................................................................5
Microeconomic analysis..............................................................................................................5
Macroeconomic analysis.............................................................................................................6
Recommendation.............................................................................................................................8
Conclusion.......................................................................................................................................9
Reference.......................................................................................................................................10

ANALYSIS ON FAILURE OF THOMAS COOK3
Introduction
The impact of economics on business is significantly strong because the economic factors
are the factors surrounding which a business make strategies. The economic factors can be
categorized as macro and microeconomic factors. The microeconomic factors include firm cost
structure, market demand fluctuation due to consumer preference, rivalry and competition and
market structure. The report thus analyses the macro and microeconomic factors that lead to the
failure of Thomas Cook a travel service providing organization based in the United Kingdom. In
order to analyse the macro and microeconomic factors the models of SWOT, PESTLE and
Porter’s five forces shall be used in report (Islam and Mamun 2017). These models are selected
because they help to understand the economic scenario under which a firm operates and what are
the advantages and disadvantages faced by the business organization. Therefore, by studying the
factors the report recommends what the firm could have done to avoid the failure.
Economic Impact on Business Organizations
Both the macroeconomic and microeconomic factors impact the business organizations
and thus it is necessary to analyse these factors. To analyse the macroeconomic factors using
PESTLE model (Perera 2017). The macroeconomic factors are political, economic, social,
technological, environment and legal. Every business organizations operate in some country and
the above macroeconomic factors of the country impacts the operation of an organization. The
political factors include the structure of the government, the stability of the existing political
regime, policies of the country both domestic and international, anti-trust laws, intensity of
corruption and tariff policies (Woo and Choi 2018). These factors influences business
organizations externally in most of the cases and before making starting operation in a country it
is necessary to assess the above said factors. The economic factors are of much importance since