Understanding the Business Environment and its Impact on TUI Group

This report analyzes the impact of Covid-19 and UK government's recovery plan on TUI Group's internal and micro-environment. It also covers the impact of STEEPLE factors on TUI Group's operations. The report provides an overview of TUI Group's business, organizational structure, and SWOT analysis. It also discusses the impacts of social, technological, economical, environmental, political, and ethical factors on TUI Group's operations.

Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
Section 1...........................................................................................................................................3
Business Overview......................................................................................................................3
Section 2...........................................................................................................................................5
The impacts of the Covid 19 Pandemic on TUI Group's internal Environment-........................5
The impact of the UK government's recovery plan on TUI Group's internal environment........6
Section 3..........................................................................................................................................6
The impacts of the UK government’s recovery plan on TUI Group’s micro-environment.......6
The impact of the Covid-19 Pandemic on TUI Group's micro-environment.............................7
Section 4...........................................................................................................................................7
The impact of STEEPLE factors on TUI Group's Operations....................................................7
Conclusion......................................................................................................................................8
References .......................................................................................................................................9

INTRODUCTION
Business environment refers to the internal and external factors of the company which affect the
company's operations negatively or positively. The business environment helps to understand the
plans , management , desired goals, growth , opportunities and identifying threats which may
occur in future(Hamilton and Webster, 2018).Internal business environment(micro business
environment) refers to the factors such as culture , staffing , financing,human resource , policies
etc. while external environment includes all the outside factors the impact the functioning of the
organization and which are no under control, such as government,technological , social , legal ,
political factors. Business environment affects the performance , decision making process as well
as strategies of the organization. This report has been made in the context of the TUI
group(Tourism Union International), which is a travel and tourism company. It was founded 1923
having its headquarter in Hannover and Berlin, Germany. The aim of this report is understanding
the business environment (micro and macro business environment )and the impact of Covid-19
on TUI Group tourism company and the impacts of the UK government’s recovery plan on TUI
Group’s micro-environment. At last it will cover the impacts of STEEPLE factors on TUI
Group’s operations.
Section 1
Business Overview
TUI Group is the world's number one tourism company which provides services such as hotel
accommodation, cruise ship booking and flight. It is operating in around 180 regions worldwide.
The group operating more than 400 hotels, providing high standard facility with environment
management and there services are best in quality. TUI Group has around 1600 travel agencies
with strong tour operators,online portals, five airlines with around 150 aircraft and 16 cruise
liners. TUI Group covers the whole tourism value chain below one roof and the company serving
21 millions customers annually within its ecosystem. (Halbert and Ingulli, 2020). The tourism

sector showing constant and above GDP growth for a period of time and it continues to be
attractive providing an excellent basis for our businesses to grow.

The organizational structure is determines the activities and information of the company in order
to achieve goals. The structure also make companies operation more efficient and effective.
Organizational Structure or Leadership team
 Functional Structure:The organizational structure determines how information flows
between levels within the company. The functional structure is also known as
bureaucratic organizational structure. Functional structure is a type of business structure
which is used to organize a company into different departments based on areas of
expertise.
 Divisional Structure: This method is used in large companies which have many business
units. The leadership team is based on subsidiary they operate, projects and products of
company which is using this method. Each division is typically responsible for producing
one particular product or service, it develops expertise in that area.
 Flatarchy Structure: A flat or flatarchy organizational structure determines the system
to organizing employees directly through communication. It is called flatarchy because it
is a hybrid of hierarchy and flat organization. It is mostly use in modern small companies
and startups business which might be able to adjust in this type of environment.
Companies who use flatarchy organizational structure have a high speed of
implementation.
 Matrix Structure:
The fourth and final organizational structure is known as matrix structure. It is also the least used
and most confusing Structure( Durband, 2021).A matrix organizational structure is a structure in
which employees have dual reporting relationships - generally to both a product manager and a
functional manager. In other words, the reporting relationships are set up as a grid, or matrix,
rather than in the traditional hierarchy.

Section 2
The impacts of the Covid 19 Pandemic on TUI Group's internal Environment-
Swot analyse is helpful in order to illustrate the impacts of the COVID 19 pandemic on TUI
Group's internal Environment which is mention below:
 Strengths- TUI Group has invested in building strong brand portfolio. The company
provides good brand quality in their hospitality sector and services for their passengers in
airlines and cruises industry that why it has high level of customer satisfaction. During
pandemic UK's government reduces tax rates, TUI group take this advantage and earn
profitability in the business.
 Weaknesses-The impact of Covid-19 on TUI's internal environment from previous two
years have been a major reason of its weaknesses. The Tourism sector severely affected
by Covid-19 pandemic. The government released guidelines for flight suspensions ,
lockdown and travel restrictions because of these restrictions the customers lose their
confidence on travelling. So the TUI Group has been impacted and the economy of the
world.
 Opportunities-After the pandemics ends, TUI Group's lift their business again to seize
future opportunities such as apply new health protocols for safe travel and improve
working style of business to encourage innovation and investment. Economic up tick and
increase in customer spending, after years of recess and slow growth rate in the industry,
if TUI start to capture new customers it is helpful in its market share. Also decreasing cost
on transportation and lowering cost on TUI's product is a great opportunity to boost its
profitability.
 Threats-After the announcement of lockdown the tourism company affected the most
because no one is allowed to go outside their houses. In that situation a lot of employees
were losing their jobs, as the company don't have money to pay them. After that the
management of the organisation start getting weak. The working of the TUI groups

continuous to decline and results in booking a lot of loss. The employees of the company
do not feel safe as they are in fear that they will also loose their job. The customers were
not satisfied with their services because there is no supply of innovative products from the
past two years because of pandemic.

The impact of the UK government's recovery plan on TUI Group's internal environment.
The UK government wants to see a sustainable, dynamic and growing tourism sector reaching
its full potential and growth in every region and nation of the UK. The travel and tourism sector
has been one of the hardest hit by the coronavirus pandemic after flights were grounded and
travel ground to a stage. So the UK's government is determined to help the UK’s world class
tourism sector and recover as quickly as possible with a full return to pre-COVID to build back
better from the pandemic. The UK government release guidelines for the nation such as COVID
entry rules for tourists and introduced strict lockdown for months to protect UK's public from
infection. TUI Group follow all the guideline and protocols for the health and safety of guests
and employees( Camilleri, 2018). All TUI companies including cruise companies, airlines,hotel
follow the procedures to prevent from infection.
Section 3
The impacts of the UK government’s recovery plan on TUI Group’s micro-environment
The UK Government's recovery plan states that to recover the losses of the tourism sector as
soon as possible and build back better from the pandemic. The Government released health and
safety guidelines for the people to prevent them from infection. (Bjarnsholtet.al., 2021).After few
months of pandemic, government successfully bring the vaccination process for the safety and
measures of the public. The customers get back to the company again and start making profit.
As the government reduces tax rate,the company start giving discounts to travellers and
customers which is major reason for attracting customers. They take advantage of the discounts
benefits offered by government. The TUI Group's able to get back their customers and earn
profit again for the business growth opportunities.

The impact of the Covid-19 Pandemic on TUI Group's micro-environment.
Micro Environment are those factors that related to the business operations and its success such
as passengers, customers, media,suppliers etc. It is important to analyse micro environment of the
organization before deciding the business strategy. The world tourism industry is severely
affected by COVID -19 pandemic. TUI Group's faced variety of problems such as a decrease in
demand, losing customers, ticket cancellation by passengers as they stop travelling in UK,supply
chain delay and flight disruptions. The company starts discounting on payments but the situation
remains same. The travel and tourism sector has been one of the hardest hit by the coronavirus
pandemic after flights were grounded and travel ground to a stage. The company faces highest
fall in visitors and employment and the employees losing their job.
Section 4
The impact of STEEPLE factors on TUI Group's Operations
To analyse TUI Group’s macro (external environment) and the factors present in it ,here the
explanation of STEEPLE factors are below:
 Social Factors- Social factors include the age distribution, lifestyle,population growth,
education and social as well as cultural conventions( Vu, et.al.,2019). The TUI Group
follows the culture of different countries where they operate and take care of the need and
preferences of the customers,it acquires the attention of the customers and tourists as well.
Therefore,TUI is able to maintain broad network of customers and tourists globally.
 Technological Factors- TUI group use the innovation technology system for the growth
of the company such as online booking for hotels, flights and tourism sector( Sedelnikov
and Orlov, 2021). The technological factors has both positive and negative impact in the
company , people uses online platform for order their holidays and bookings but
sometimes they cancel their orders and it effect the operations of the company.
 Economical Factors- The UK is the sixth largest economy in the world by nominal GDP.
Previous year, globally economies have been affected during COVID-19 and lot of
employees losing their job because company don't have money to pay them. This may
severely affect the profits and operations of the TUI's Group.( Kang, Diao and Zanini,
2020)

 Environmental Factors-The TUI group sets the appropriate environmental policies
which makes the environment sustainable for good business conduct. The company is
also engaged in keeping the environment sustainable. Sometimes the passengers faces
difficulties in arranging flight and Cruise because of bad weather condition in such case
company providing them emergency services and back up tools. All competitors are
conducting their businesses are in an environmental friendly manner.
 Political Factors- Political factors is all about to set rules and regulations, taxes and
policies which affect the TUI Company .As the company operates its operations in
different counties across the world so it faces difficulties because of different political
factors. ( Mnuel, and Herron, 2020).Some countries have strict regulations for the
industry of aviation in which TUI operates its airlines. The new law such as minimum
wages can also minimize the company profits.
 Legal Factors-Legal factors are the external environment which are how the law affects
the operations of a business and TUI Group has made policies for the safety and health of
the employees. During pandemic company firing employees in order to recover the loss
which occurred by pandemic. The working culture is severely affected because of this
action taken by the organization.
 Ethical Factors- Ethical factor can be defined by the values and moral principles which
regulate the action of the group or individual( Alanzi, 2018). It analyse the organization
operation that the work is doing in right manner or not so the organization does not have
to face issues regarding ethics and code of conduct. The employees in TUI follow all the
codes and ethics made by the company.
Conclusion
From the above report it can be concluded that the business environment is important to
identify the internal and external environment of the which are affecting the businesses
directly and indirectly. The pandemic has affected the TUI Group business directly and
indirectly. The major suggestion to the company is apart from European countries they
should try to explore in other countries too,it will help them to expand their business and
competitive advantage. The recovery plan of UK's Government helps the Tourism company

in coming back to its initial position and during the pandemic government also reduces tax
rates which is beneficial for hotel and tourism sector to recover its losses.

References
Alanzi, 2018. PESTLE Analysis. Project Management.
Bjarnsholt, et.al.,2021. The importance of understanding the microenvironment.
Camilleri, 2018. The tourism industry: An overview. Travel marketing, tourism economics and
the airline product, pp.3-27.
Durband, 2021. Establishing sustainability standards in tourism. In Handbook for Sustainable
Tourism Practitioners. Edward Elgar Publishing.
Halbert, and Ingulli, 2020. Law and ethics in the business environment. Cengage Learning.
Hamilton and Webster, 2018. The international business environment. Oxford University Press.
Kang, Diao and Zanini, 2020. Business-to-business marketing responses to COVID-19 crisis: a
business process perspective. Marketing Intelligence & Planning.
Manuel and Herron,2020. An ethical perspective of business CSR and the COVID-19
pandemic. Society and Business Review.
Sedelnikov and Orlov, 2021. Analysis of the significance of the influence of various components
of the disturbance from a temperature shock on the level of microaccelerations in the internal
environment of a small spacecraft.
Vu,et.al., 2019. Time-lagged effects of weekly climatic and socio-economic factors on ANN
municipal yard waste prediction models. Waste Management, 84, pp.129-140.