Business and Business Environment: A Comprehensive Analysis of Thomas Cook

This assignment delves into the intricacies of business organizations, focusing on Thomas Cook as a case study. It explores different organizational types, structures, and functions, analyzing their interrelationships and impact on business objectives. The assignment further examines the influence of the macro environment on Thomas Cook's operations using PESTLE analysis and SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The study concludes with recommendations for Thomas Cook to leverage its strengths and opportunities to overcome weaknesses and threats, ultimately achieving sustainable growth and success.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION................................................................................................................................4
LO1: EXPLAIN THE DIFFERENT TYPES OF ORGANISATIONS, INCLUDING THEIR SIZE AND SCOPE...5
P1&P2..........................................................................................................................................5
M1 ANALYSE HOW THE STRUCTURE, SIZE AND SCOPE OF DIFFERENT ORGANISATIONS LINK
TO THE BUSINESS OBJECTIVES AND PRODUCT AND SERVICES OFFERED BY YOUR CHOSEN
ORGANISATION............................................................................................................................9
LO2.................................................................................................................................................11
P3 EXPLAIN THE RELATIONSHIP BETWEEN DIFFERENT ORGANIZATIONAL FUNCTIONS AND
HOW THEY LINK TO ORGANIZATIONAL OBJECTIVES AND STRUCTURE....................................11
M2 ANALYZE THE ADVANTAGES AND DISADVANTAGES OF THE INTERRELATIONSHIPS
BETWEEN ORGANIZATIONAL FUNCTIONS AND THE IMPACT THAT THEY CAN HAVE UPON
ORGANIZATIONAL STRUCTURE.................................................................................................14
L03..................................................................................................................................................16
P4 IDENTIFY THE POSITIVE AND NEGATIVE IMPACT THE MACRO ENVIRONMENT HAS UPON
THE BUSINESS OPERATIONS OF YOUR CHOSEN ORGANIZATION.............................................16
M3 APPLY THE PESTLE MODEL APPROPRIATELY TO SUPPORT A DETAILED ANALYSIS OF THE
MACRO ENVIRONMENT THAT AFFECTS THE OPERATIONS OF YOUR CHOSEN ORGANIZATION
...................................................................................................................................................19
LO4.................................................................................................................................................20
P5 USING SWOT CONDUCT AN INTERNAL AND EXTERNAL ANALYSIS OF YOUR CHOSEN
ORGANISATION IN ORDER TO IDENTIFY ITS STRENGTHS AND WEAKNESSES...........................20
P6 EXPLAIN HOW STRENGTHS AND WEAKNESSES INTERRELATE WITH EXTERNAL MACRO
FACTORS....................................................................................................................................22

M4 APPLY APPROPRIATELY SWOT ANALYSIS AND JUSTIFY HOW THEY INFLUENCE DECISION-
MAKING BY YOUR CHOSEN ORGANIZATION.............................................................................24
CONCLUSION.................................................................................................................................26

INTRODUCTION
This assignment will throw light on the different types of the organisations on the basis of size.
And there will be the comparison of the private company like Thomas cook with the public and
voluntary enterprises. Regional development agency is taken as the example of public
enterprises of UK and Tourism concern is taken as the example of the voluntary sector
organisation. This will be classified which will include the scope, legal structure, size and the
stakeholders. There will be also an explanation of the relationship between the various functions
and their relationship with the organisational structure and objectives. Moreover, there will be
the description of the advantages and limitations of the organisational functions of their
structure. This assignment will demonstrate the negative and positive impact of the macro
environment on the business operations using PESTLE analysis. Further, there will be the
determination of the strengths and weaknesses of the Thomas cook with the relation of external
macro factors.
Thomas cook group is the global travel company which is a British enterprise. It operates in five
main divisions like Central Europe, UK, Germany, Northern Europe and West Europe having
approx. 19.1 million annual customers and it is the second largest travel company in the UK. The
three main shareholders of the company are Standard Life Investments Ltd., Invesco and Guo
Guangchang.

LO1: EXPLAIN THE DIFFERENT TYPES OF ORGANISATIONS, INCLUDING THEIR SIZE
AND SCOPE
P1&P2
INTRODUCTION
This part of the assignment will focus on the comparison of the public, private and voluntary
sector with the example of each on the basis of the size, scope and type of the organisation.
There will be the explanation of the differences between a for-profit organisation, not for profit
organisation and non-government organisation (Hasan and Sultana, 2014).
Following are the differences between the For-profit, not-for-profit and non-governmental
organisations.
For-profit organisations. Not-for-profit organisations. Non-governmental organisations.
 It is a legal entity
which focuses on
earning a profit
 Its area of
operation may be
large or medium
with the sole
proprietorship or
partnership or a
company form
(Subramanian, et
al. 2016).
 This organisation
work for the profit
motive.
 It is being set up to
provide services and
goods to the people
and the member does
not receive the profit
share.
 Its area of operation is
limited.
 This organisation work
for the promotion of
science, art,
commerce or
research.
 It is formed by ordinary
people that operate
independently with no
interference from
government.
 Its area of operation is large.
 This organisation works for
the welfare of the economy
and society (Hasan and
Sultana, 2014).
.

There are different types of the organisations:
Sole trading organisation: It is that type of the organisation which is maintained and owned by
a single person and that is responsible for all profit and loss of the organisation.
Partnership organisation: This is owned and maintained by the two or more people or partners
and both the partners share all profit and loss. For example, FAB.
Limited organisation: The ownership is easily transferable in this kind of the organisation and it
is owned and maintained by the board of directors. Example of this organisation can be the
Associated Foods plc.
Following are the differences between different types of organisation
PARTICULARS PRIVATE COMPANY
(THOMAS COOK)
PUBLIC ENTERPRISE
(REGIONAL
DEVELOPMENT
AGENCY)
VOLUNTARY SECTOR
(TOURISM CONCERN)
DEFINITION This is the type of the
company whose
shares cannot be
offered to the public
for sale and which
works under less
strictness of the legal
requirements. They
may have
shareholders and
issue stocks (Alford
and Greve, 2017)
This enterprise is a
business which is
partly or wholly
owned and
maintained by the
state and is controlled
by the public
authority (Nash,
2017).
The voluntary sector
is also termed as the
non-profit sector and
it is the social activity
which is undertaken
by the organisations
that are non –
governmental and
non for profit (Nash,
2017).
OBJECTIVES This focus on the
profit-making and
The public sector is
set up with the aim of
The main aim of this
enterprise is to do

making sales and
revenue.
offering public service
instead of earning a
profit (Alford and
Greve, 2017).
social welfare and
aims at the social
activity (Nash, 2017).
SIZE Thomas Cook is the
large-sized
enterprises with the
revenue of £9,007
million and 22000
employees as of
2017.
Regional
development
agencies comprised of
the nine non-
departmental public
enterprises
Tourism Concern is
the large-sized
enterprises having
more than 1000
employees and makes
an average income of
around £ 75k (Alford
and Greve, 2017).
LEGAL TYPES Thomas Cook is a
British based global
travel agency which is
listed on the London
stock exchange (Nash,
2017).
It is a public sector
agency of nine public
bodies with one RDA
for each of the NUTS
It is non-
governmental
organisation and the
charity registered
based in the UK with
the charitable status.
SCOPE It is the leading travel
industry company
with the sales of £7.8
billion in the year
offering services all
over the world. It is
176 years old
organisation and
providing new travel
experiences to
everyone (bovaird
It is having nine public
bodies which have
been operating with
the aim of the
economic
development of
England. Its objective
is to inform, educate
and provides service
to its customers.
It advocates the
ethical tourism with
its operations in the
UK. It is a charitable
trust which exposes
the worst human
rights abuses of the
tourism. They
promote tourism that
can welfare the local
community of the

and klijn, 2015). tourist (Nash, 2017).
Thus, there are various types of the organisation having different size, scope and purposes. The
size of the company varies on the basis of the scope and purposes.

M1 ANALYSE HOW THE STRUCTURE, SIZE AND SCOPE OF DIFFERENT
ORGANISATIONS LINK TO THE BUSINESS OBJECTIVES AND PRODUCT AND
SERVICES OFFERED BY YOUR CHOSEN ORGANISATION.
Extent, size and structure of any organization are interconnected with the objectives of the
business organizations. It has been observed that the organizations set their business targets on
the basis of their objective. Moreover, the business objectives are also set according to the size
of the business.
As in the case of the Thomas Cook, the objective is to provide a great experience of the
travelling and tour to it visitors. For this, the company has to make its structure accordingly and
need diversification and expansion on a timely basis. The Board of directors of Thomas Cook
aims s at the application of the corporate governance for the effective and impactful decision
making which is aiming at the success of the company So, the structure of the Thomas Cook
aiming at the attainment of the objectives of the organization. The aim of the Thomas Cook is
to provide the wonderful travel experience and exposure to its visitors thus, the structure and
size of the organization are framed accordingly (Nash, 2017).
In the Instance of the Regional development agency, there are nine units under the agency. All
units are focusing on the fulfilment of the objectives so that they can promote the development
of the region in an effective and efficient manner. The scope of the organization also focuses on
the attainment of the main objectives of promoting economic development. Their structure is
also framed on the basis of the scope and purpose of the agency (Grant, 2016).
Looking at the scenario of the Tourism concern organization, the main purpose of this
organization is to do welfare of the society and people. The organizational structure also
consists of the subunits which are engaged in promoting the ethical tourism. Thomas Cook size
is medium in size but all the members, managers and the employees are concentrated at the
encouragement of the tourism that can benefit the local community of that area. Its scope is
also focused at the ethical tourism and it is an ethical tourism which is engaged in the providing
services and facilities which can expose the exploitation of the human rights in the tourism any
kind of abasement (Grant, 2016).

LO2
P3 EXPLAIN THE RELATIONSHIP BETWEEN DIFFERENT ORGANIZATIONAL
FUNCTIONS AND HOW THEY LINK TO ORGANIZATIONAL OBJECTIVES AND
STRUCTURE
There will be the explanation of the role and function of the finance, marketing, human
resource management and operations and their interrelation for the Thomas Cook
organization. There is a description of the different functions of the organization like Thomas
Cook and how it relates to the organizational structure and objectives (Tomczak, et al. 2018).
Figure 1: Organization Functions
[Source: http://textbook.stpauls.br/business_organization/page_11.htm]
The marketing department of the Thomas Cook aims at the implementation and framing the
strategies and researching the market in a way so that the needs of the tourist and the visitors
can be identified and satisfied. The basic function of marketing in the organization Thomas Cook
is to manage the 7p’s of the marketing. The human resource management team of the Thomas
Cook is concerned with the recruitment and selection of the right people, gives training to them
and maintaining the relations with the employees (Carlson, 2017). The finance team of the
Thomas Cook focuses at the maintaining the record of the financial transactions of the Thomas
Cook. They prepare the financial statements and manage the payroll operations. The operation
function of the Thomas Cook focuses on the managing the process of the creation of services.

They have to do planning, coordinating, organizing and controlling of the resources required to
produce a Thomas Cook services and products.
Every organization is usually divided into various different departments and each department is
interconnected. In the case of the Thomas Cook, for example, if the Thomas Cook need to
launch new holiday package then there will be the promotion of the services that requires
coordination with the finance and operations team as the fund requirement would be fulfilled
by the finance team and operations team is the only department which will look at the
production and management of the production of new services (Carlson, 2017). Moreover, the
marketing and human resource department of the Thomas Cook is also interconnected. The
Thomas Cook need talented candidates for their sales team and it can only be fulfilled by the
coordination with the Human Resource team. Human resource is interrelated with the all
functions of the organization as all staff of department requires a good work environment and
good remuneration which can be only fulfilled by the human resource team. Operations and
Human resource department of the Thomas Cook are also connected at the fundamental level
(Naumann, et al. 2015).
The objectives of the Thomas Cook are to survive in the UK market it means the facing the
competition so that the company can remain in the market. Further its objective is to increase
the sale which means the selling maximum number of the tour packages that will also lead to
maximizing profit. Thomas Cook also has the objective of the satisfying the visitors and growing
the company. Marketing is at the heart of every business, as it will help the Thomas Cook
organization to increase the sales, maximizes the profits and satisfying the customers by
implementing the strategies. The finance department will minimise the costs so that profit can
be left over and the operations will aim at the growth of the company by producing new
services (Bolman and Deal, 2017).
There is four structure, the first is product based structure is used by those companies which is
having diversified product lines which are based on the service and product. Customer-based
structure aims at the dividing different segments on the basis of the particular customer group.
And the geography-based structure involves making of groups on the basis of the groups.

Functional structure involves making groups on the basis of the functional area. Marketing,
finance human resource and operations are being considered as the important in the functional
organizational structure.
Thus there are various departments in the organization which is having their specific roles and
are interconnected. Organizational functions are interconnected with their objectives and
structure (Carlson, 2017).

M2 ANALYZE THE ADVANTAGES AND DISADVANTAGES OF THE
INTERRELATIONSHIPS BETWEEN ORGANIZATIONAL FUNCTIONS AND THE
IMPACT THAT THEY CAN HAVE UPON ORGANIZATIONAL STRUCTURE
There are many pros and cons of the interconnection between the organizational functions and
their impact can be seen in the organizational structure.
Following are the advantages and disadvantages:
Advantages:
1. The interrelationship between the employees of the different organization department will
help the organization to maintain the cooperation.
2. It will increase the association among the employees and members and effectiveness within
the business (Bolman and Deal, 2017).
3. It will boost up the profit level because every member of the different department shares the
information in the organization.
4. There will be the high productivity due to the coordination among the departments (Rahim,
2017).
Disadvantages:
1. There may be the wrong utilization of the information and data which may lead to providing
harm to that department (Bolman and Deal, 2017).
2. It may lead to increase in competition among different branches.
3. It can also raise the conflicts among the individual of the different departments.
4. There may be the lack of control among the different departments (Rahim, 2017).

The organizational structure will have the clear structure and there will be the removal of the
complexity in the understanding the behaviour of the employee of the different departments
due to the interrelation. The interconnection and relation may create some conflicts between
the employees of the departments. The supervisor may fail to recognize the different
departments and their functions.

L03
P4 IDENTIFY THE POSITIVE AND NEGATIVE IMPACT THE MACRO
ENVIRONMENT HAS UPON THE BUSINESS OPERATIONS OF YOUR CHOSEN
ORGANIZATION
The positive and negative impact will be identified for the six microenvironment factors like
political, Economic, social, technological and environmental with the examples. These all factors
will be discussed.
There are six main macro-environmental factors that can shape the organization environment
which are:
1. Political
2. Economic,
3. Social,
4. Technological
5. Legal and
6. Environmental
1. Political factors: This includes the government interference and the political issues and rules
prevailing in the market. It can be the major factor for the Thomas Cook that can affect the
profitability of the company. The positive effect that it may have as Thomas Cook is operating in
multiple countries and it will expose to different types of the political risks. This may be help in
achieving the success by diversifying the political environment risks. The negative impact can be
seen in the form of the imposing of bed tax in the tourism business will affect the Thomas Cook
domestic cost (Harper, 2015).
2. Economic factors: This factor also influences the company in both ways negative and
positive. It includes the inflation rate, economic situation like recession or inflation,

unemployment rate etc. For example, low rate of the foreign exchange rate will lead to the
Thomas Cook to attract a lot of visitors as it will minimise the costs for the visitors and increase
the sales. Contrary to it, in the past years the rate of the GDP was declined and the rate of the
employment has increased which all have impacted negatively to the Thomas Cook (Feys and
Probert, 2015).
3. Social factors: The social factors include the education, shopping habit, disposable income,
age etc. The different age people demands different holiday packages. For example, the UK’s
economy is among the strongest economy where there is a high disposable income of the
consumers which will leads to the more expenditure on leisure and thus Thomas cook can
expect a high number of the increase in sales. In a negative aspect, it can be seen that the
people of the UK are not spending more on recreational and leisure activities which affects the
sales of the Thomas cook (Carroll and Buchholtz, 2014).
4. Technological factors: This factor also influences the operation of the business in negative
and positive aspect both. Company can use the internet and mobiles devices within the
organization. For example, the positive impact of this factor can be seen for the Thomas Cook is
the emergence and acceptance of the Internet which aid to minimization of the costs and
efficiency increment within the organization. The limitation of this factor is Thomas Cook faced
difficulty and challenges to cope up with the prompt changes due to the advancement in the
technology (Feys and Probert, 2015).
.
5. Legal factor: This factor comprises of the various law such as competition, employment and
taxation law. For example, Thomas cook have the competitive advantage as the Thomas cook is
the market leader of the tourism business so all the strategies of the competitors does not
affect the Thomas Cook’s business. Apart from these, the Thomas Cook also facing the
employment and taxation law by the number of the increment in the rate law (Carroll and
Buchholtz, 2014).

6. Environmental law: This factor has the major influence on the working of the Thomas Cook.
Like the temperature for the UK it will be majorly affected. For example, there is various
environmental laws, Thomas Cook has applied the sustainable tourism for the development
and preservation of the destination site as it will attracts more customers (Carroll and
Buchholtz, 2014). Further, Thomas Cook is facing the climatic change problem which is majorly
affecting the tourist attractions.

M3 APPLY THE PESTLE MODEL APPROPRIATELY TO SUPPORT A DETAILED ANALYSIS OF
THE MACRO ENVIRONMENT THAT AFFECTS THE OPERATIONS OF YOUR CHOSEN
ORGANIZATION
There are various macro environmental factors which affect the operation of the Thomas cook
to a great extent. It can affect positively and negatively both. The external factor has the impact
on the Following is the analysis of the Thomas Cook of the PESTLE model (Moutinho and Phillips
2018):
POLITICAL ECONOMICAL SOCIAL
 International barriers
 Tourism policies
 Tax policies
 State instability
 Rate of inflation
 The intervention of the
government
 Unemployment rate
 Loans interest rates
(Kimani and Ogutu,
2018).
 Cultural ethics
 Age differences
 Customer preferences
 Seasonal variations
 Population scattering
TECHNOLOGICAL LEGAL ENVIRONMENTAL
 Online ticketing
 Mobile tourism
 Online checking and
reservations
 Upgraded technologies
 Legal constraints within
the travelling
 Labour law on tourism
business
 Legal rules and
regulations
 The increment in the
eco-friendly travelling.
 Environmental group
pressure which is
related to the
environmental
pollution (Kimani and
Ogutu, 2018).

LO4
P5 USING SWOT CONDUCT AN INTERNAL AND EXTERNAL ANALYSIS OF YOUR
CHOSEN ORGANISATION IN ORDER TO IDENTIFY ITS STRENGTHS AND
WEAKNESSES
This part will focus on the internal and external analysis of the Thomas Cook with the help of
the SWOT analysis which will able to distinguish the strengths and weakness of the
organisations.
There are two types of the business environment:
Internal Environment: This factor comprises of the aspects of the organisation which affects
the approach and success of the operation of the business. The company have control over this
aspect. The internal factors of the company include the strength of employees, organisational
structure, operations, strategic risks, innovation etc. (Bryson, 2018).
Strengths in the internal environment of the Thomas Cook:
1. Thomas Cook is the among the oldest and largest travel company.
2. The holiday packages of the Thomas Cook is accessible and affordable.
3. Thomas Cook has the diverse range of the employee’s strength worldwide.
4. It is having a strong brand presence with the efficient and effective promotional activities.
5. Thomas Cook is providing the flexibility and customisation in the holiday packages (Bryson,
2018).
Weaknesses in the internal environment of the Thomas Cook:
1. The company have the limited market share due to the heavy competition.
2. Thomas Cook also has the persistent long-term debts.
3. The organisational structure of the Thomas cook is complex (Bull, et al. 2016).

External Environment: It includes all the factors which are outside the business which impact
the operations and working of the environment. The business does not have control over these
factors so the business should react and respond according to the business situations
(Wheelen, et al. 2017).
The positive effect of the external environment of the Thomas Cook:
1. Due to the technological revolution in the company, there is a start of the online booking for
the tour package of the Thomas Cook.
2. The demand for the Thomas cook services has increased all over the world due to the less
competition and market leader.
3. Thomas cook develops the opportunity of expanding the business globally due to the largest
tour operator (Bryson, 2018).
The negative effect of the external environment of the Thomas Cook:
1. There is a no much profit in the business of airline.
2. There is a low-cost service provider in the market which is a threat to the company.
3. Due to the government regulations, Thomas cook faced the difficulty in the various activities
like VISA, foreign exchange, etc. (Wheelen, et al. 2017).
Thus the internal and external environment has the impact on the working of the business
operations. The internal environment of the company is having many strength and weaknesses.
Also, the external environment has the positive and negative impact on the operations of the
Thomas Cook.

P6 EXPLAIN HOW STRENGTHS AND WEAKNESSES INTERRELATE WITH
EXTERNAL MACRO FACTORS.
This section will throw light on the strength of the Thomas Cook which can be utilised for the
maximisation of the opportunities and minimising the threats of the business organisation.
There will also the explanation of the utilisation of the opportunities for minimising the
weaknesses of the Thomas Cook (Liefbroer, et al. 2015).
Thomas cook has the strength of the experienced business units and the opportunity to grow
worldwide. Thomas cook can send the experienced team to the new business area so that the
business can be set up there in an effective manner. Thomas cook also has the sound financial
position which can be used for the enhancement and improvement of the technology (Barney,
2014).
Thomas cook can use the strength threats strategy for the minimisation of the weaknesses of
the company. The market share of the company can be increased by the funds and finances of
the organisation. Thomas Cook can diversify and expand to increase the market share as it will
require the funds and amount.
Thomas cook is also engaged in the weakness and opportunity strategy as it can use the
opportunities for the minimisation of the weaknesses. The company have the opportunity of
the launching the online booking services which will focus on the growth of the Thomas Cook in
the market which will boost up the market share and decrease the competition. It will also help
the company to decrease the competition in the market (Liefbroer, et al. 2015).
Now, talking about the weakness threats strategy, Thomas Cook should minimise the
weaknesses of the company so that the company can avoid the threats prevailing in the
market. Thomas cook should increase the market share so that Thomas cook can also provide
the services at lowest costs which will minimise the threat of the low-cost service provider
entrance in the market (Barney, 2014).
.

Thus all the factors of the SWOT are interconnected which will help in the utilisation of the
strengths and opportunities for the minimisation of the weaknesses and threats of the
organisation.

M4 APPLY APPROPRIATELY SWOT ANALYSIS AND JUSTIFY HOW THEY
INFLUENCE DECISION-MAKING BY YOUR CHOSEN ORGANIZATION.
This section explains the analysis of SWOT within the organization and their influence on the
decision made by the Thomas Cook. Below is the SWOT analysis of the Thomas Cook:
STRENGTHS WEAKNESS
 Sound financial position
 Global recognition
 A strong base of capital resource
 Prior staff and experience
 Oldest travel business in the UK
 Availability of the customized and
flexible holiday packages.
 Competition in the market.
 Low market share
 High level of capital maintenance
 Non-value added activities
OPPORTUNITIES THREATS
 Online booking
 Expansion and diversification in the
global and international market.
 Increase in demand for the quality of
service
 Small firms inability to cope up with
the competition
 Financial crisis
 Regulations of the government
 Low-cost service providers entrance
 Growing competition
 Changes and unpredictability of the
customer's preferences
The strengths, weakness, opportunities and threats can influence the decision making of the
Thomas Cook. It can be utilised as the tool of the decision making so that it can take the benefit
of the strengths and opportunities to achieve the business goals. Swot analysis can help the
Thomas cook to clarify and summarise the main issues and opportunities regarding the business
of the Thomas cook which will help the organisation to make the decisions and develops the
new strategies and objectives. With the help of the strengths like sound financial position will
help the company to take decision-related to the further investment. Moreover, the

weaknesses of the Thomas cook will also help it to make the optimum utilisation of the
resources. I will also help in taking decision for grabbing the opportunities in the market (White,
et al. 2015).
Thus the analysis of the SWOT will help the company to attain the business objectives and help
in the effective decision making.

CONCLUSION
This assignment focused on the different types of the organization with the help of the size,
scope and purpose of the organization. Thomas cook has framed the structure according to the
objectives of the organization. It also has the interconnection of the various functions with the
organizational structure. Further, there was a discussion of the negative and positive aspect of
the macro environment. Also, the internal weaknesses and strengths of Thomas cook have
influenced by the external macro factors.
There is a recommendation to the Thomas Cook that company can increase the market share
and cut off the competition by the increase in demand for the services through online media
and expansion in the global market.

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