External Factors Affecting Thomas Cook's Business Environment

This article discusses the external factors that affect Thomas Cook's business environment, including political, economic, social, technological, legal, and environmental factors. It also explores the drivers of change in the company.

BM461 GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................1

MAIN BODY
A firm’s business environment can be evaluated by the external factors affecting it and the
trends of the competing environment also affect the policies developed by the organisation.
Thomas Cook is an international tour and travel company that has its headquarters located in
UK.
Pestle Analysis
The Pestle analysis involves consideration of the six factors of the external environment
that affect the decision making of company:
 Political Factors: The political stability of a country affects the decision making of the
company and also the entire tourism industry because the corruption, bureaucracy or the
infiltrated politics always leads to the brewing of negative culture (Abubakar and
Junaidu, 2019). Additionally, taxation policies, trade regulations or tariffs can also impact
the decision making of companies. Since Thomas Cook operates in multiple countries, it
affects the decision making and policy formulation of the company.
 Economic Factors: Inflation rate, interest rates, economic rates, savings etc. are some of
the critical aspects that affect the competitive advantage that a company can gain. The
economic growth rate or the unemployment rate, different business cycle stages or the
prosperity, recession etc. are some of the major factors affecting the decision making at
Thomas Cook because they have to implement pricing strategies accordingly.
 Social Factors: Demographic aspects, cultural levels, attitudes, leisure interests etc. are
some of the critical aspects affecting the entire society (Patil and Kodag, 2018). Since
Thomas Cook basically deals with the people belonging to different backgrounds who are
associating for the purpose of tourism, the social aspects affect the decision making
majorly.
 Technological Factors: Regular development of technological aspect in the dynamic
environment leads to the creation of the fast disruption speed in the technological
environment. Integrating such technology with the products and services can increase the
output of the entire tourism industry. Thomas Cook ensures implementation of the latest
technology in the organisation so as to maximize revenue generation.
 Legal Factors: Legal framework of the country in which a company is operating deeply
impacts the policy formulation and decision making of an organisation (Westerburg and

Bode, 2018). Employment law, health or safety law, data protection are some aspects
which every company needs to comply with.
 Environmental Factors: Climate change, cleanliness, endangered species of animals are
some of the major factors impacting the overall customer attraction in the tourism
industry. Thomas Cook being a tourist company needs to analyse such trends regularly
with great concern.
Change drivers
The constantly changing dynamics of the industry in which Thomas Cook operates makes it
necessary to evaluate the different factors affecting change implementation in the organisation.
There internal and external drivers of change in a company and these affect change
implementation and acceptance levels (Makgopa and Daniel, 2017). The internal drivers are
usually concerned with the resources that are available, the invention and innovation aspect that
is associates, different capabilities etc. that affects an organisation and its decision making and
the external drivers are technological aspect, investors available, competitors or the customers
etc. which organisation needs to consider in longer run so that they can develop policies
accordingly. For Thomas Cook, the understanding and integration of these drivers is the critical
aspect in increasing the profitability of the company.

REFERENCES
Books and journals
Makgopa, S.S. and Daniel, T., 2017. External environmental considerations in the planning of
strategies of car dealerships. Environmental economics. (8, Iss. 1). pp.83-92.
Patil, R.R. and Kodag, V.B., 2018. QWL of Women Employees in Service Sector and External
Environmental Factors. A Journal of research articles in management science and allied
areas (refereed). 11(1). pp.12-20.
Abubakar, S. and Junaidu, A.S., 2019. External Environmental Factors and Failure of Small and
Medium Enterprises in Kano Metropolis. Asian Journal of Economics and Empirical
Research. 6(2). pp.180-185.
Westerburg, M. and Bode, C., 2018, July. Sources of Supply Chain Risk: External
Environmental Factors or Strategic Choice?. In Academy of Management Proceedings (Vol.
2018, No. 1, p. 14532). Briarcliff Manor, NY 10510: Academy of Management.
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