Thomas Cook Business Strategy Analysis

This assignment delves into the strategic decisions made by Thomas Cook regarding its business operations. Specifically, it examines the company's implementation of both vertical and horizontal integration strategies in 2017. The analysis considers the merger of airline operations and the co-operation with Co-Op Travel as examples of these integration approaches. The assignment utilizes provided text references to support its analysis and understanding of Thomas Cook's strategic direction during this period.

Hospitality Provision in
Travel and Tourism Sector

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................2
1.1 Scope of the hospitality industry within the travel and tourism sector............................2
TASK 2............................................................................................................................................4
2.1 Integration of hospitality sector in travel and tourism industry.......................................4
2.2 Impacts and consequences of integration.........................................................................7
TASK 3............................................................................................................................................8
3.1 Rational for for new hospitality business.........................................................................8
3.2 Design a project proposal for respective industry............................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The hospitality sector is the fastest growing and most important industry in the service
sector industries. In integration with the travel and tourism sector this largely affects the
economic growth of the country. The hospitality industry is the primary source for the growth
and development of the tourism sector. The hotels, restaurants, pubs, adventure parks are the
hospitality services that enhance the standards and quality of the services produced by the
Thomas cook company to their customers. Along with the integration of the Sentido hotel chain
and easy jet and other airlines the Thomas cook company is growing globally at faster rate and
increasing revenue generation by enhancing customer loyalty of the clients through delivering
standards quality services to their customers (Darcy, 2010). The merger with the hospitality
industry helps in developing various strategies for the expansion of business and also shares the
customer base to increase profitability for the company. In this report the various factors
affecting the rational developed for new product developed on the hospitality services is
discussed. The business proposal is also defined in this assignment in order to study and analyse
the rational effectiveness in the practical market.
Company introduction: The Thomas cook group was established in 2007 The Thomas
cook company is dealing in the travel and tourism sector. This company is the second largest
travel and tourism group of the UK market which in delivering their quality services to the
tourist from all over the world. The Thomas cook organisation group is integrated their services
along with different industry services in order to effective delivery of services to the customers
and building competitive advantage in the market (Thomas Cook to merge three airline
operations. 2017). The group horizontally integrated with the small local travel agency of UK in
order to expand its business in local area. The company also merged with the different
companies of travel and tourism in various countries to expand business successful outside the
UK also. The Manos is the other travel industry that merged with Thomas cook to expand
business globally. The company merged with different local transportation services companies
top provide better experience to the customers. The Thomas cook merged with easy jet in order
ton provide quality services to the consumer of the company services.
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TASK 1
1.1 Scope of the hospitality industry within the travel and tourism sector.
The hospitality services are related to the welcoming customers with providing their
services to the consumers effectively. Hospitality industry is having a serving with some special
characteristics like friendliness, inhospitableness, sociability etc. all the services of the
hospitality industry serve a Friendly nature to customer and helps in exploitation of sociability in
particular area and results in creating a large social network with others. The hospitality industry
comprises various businesses involved in welcoming the customers for utilizing ether services.
The different business dealing in accommodation, food and beverages, recreational activities etc.
are the part of hospitality industry. The business like cafe, restaurant, hotels, motels, events,
conferences, theatre, club, pubs are the organisation that are serving hospitality services to the
customer (Fredman and Tyrväinen, 2010). The person engaged in purchasing these services are
hospitable and trying to full fill his various needs through hospitality industry like recreational
wants, food and accommodation needs etc. All these companies and business organisation are
involved in proving quality services to the perspective customers in order to enhance their
satisfaction level and helps in retaining and building higher customer loyalty towards the brand.
The Hilton hotels, various resorts, cafe, restaurants from 5-star hotels chain, Mac Donald, Disney
land all are the various companies that are involved in hospitality services and providing better
experience to their customers. The industry is providing various types of the services like 5-star ,
3-start hotels and restaurants targeting various class of customers.
The tourism sector is dealing in various services related to travelling services. This sector
is engaged in providing various types of consultancy services along with providing appropriate
holiday packages,. The travel and tourism industry is involved in establishing good relationship
with the customers in order to making a good holiday packages and services in order to enhance
satisfaction level of customers. This industry is focusing on the quality services, tourist
attractions, consultancy services and other activities that leads to better experience of prospective
client with the company by maintaining good customer employer relationship and better query
handling procedures (Hall, 2013). The companies like trip advisor, Thomas cook, TUI group and
other local smaller travel agency are involved in providing services of tourism industry. All these
company develop different quality services along with wide range of holiday packages
depending upon the customer class, and their motives. The tour packages comprises different
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activities and services depending upon the motives of client like travelling because of some
health issues and treatment, for business meeting, for adventures life, for leisure tome and
recreational activities or to explore some new cultural and custom values.
The hospitality services is having great relationship with the development of the travel
and tourism industry. The hospitality services companies are involved in various type of service
providing in integration with tourism sector. There is a high scale of utilization of the hospitality
industry services by the tourism sector. The companies like Thomas cook, TUI group is using
accommodation, food and beverages services at the purist destination at larger scales and also
helpful in development of both the industry mutually (Hunter, 2012). The wider scope of the
various hospitality services in the development for the travel and tourism supports the tourism
company to provide quality services and better experience to customers.
The accommodation services of the hospitality industry is having wider scope ion
expansion of travel and tourism growth and helps in creating brand loyalty by delivering quality
services according to their needs and demand. The different hotels chains in integration with
travel and tourism companies like Thomas cook serve place to accommodate and spend leisure
time by using their quality services. The tourism companies like Thomas cook develop their
packages according to the scale of the services of hospitality industry like 3, 4 or 5 star hotels
along with the breakfast, spa etc. services.
The food and beverages services also have larger scope in the development of the tourism
industry. The various holiday packages along with the buffet services, dinner, breakfast and
lunch services are included in different types of packages at variolous prices (Jaafar and et. al.,
2011). The travel and tourism companies along with integration of the food sector hospitality
industry provides beverages, food to the customers at the tourist attraction destination and helps
in development of both the industries mutually.
Wile the pubs, club, casino, adventures park, theme parks, theatre, live event, conferences
are other hospitality services that helps in recreation of the travellers and helps exploring their
interest area more significantly and provide better experience with both hospitality and travel and
tourism sector industries.
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TASK 2
2.1 Integration of hospitality sector in travel and tourism industry.
Integration is merger of the two industries with each other in order to accomplish some
specific task and operations effectively. Integration is sharing of common goal of individual
company with other which related to the company operations , functions, end products in some
way. This integration leads to mutual development of different sectors and leads to higher
probability in the market. The integration of the two sector can be achieved by sharing of some
function or distribution of the function in organisation working together in order to achieve
higher productivity and revenue generation. Integration leads to collaboration of various
strategies to expand business globally. Integration may involve the company integrate in same
country or integrate with other country company (Janta, 2011). This leads to sharing of customs,
cultural values and strategies to function appropriately in market. The Integration of different
brand s helps in sharing of common customer base that are interlinked to the similar products and
services of the different companies. For ex. the customer of any travel industry like Thomas cook
is also engaged in utilisation various type of services from other sector along with tourism
company services like, food, accommodation, luxurious facility, transportation, telecom and
retail services. In order to integration of tourism industry with these type of different service
provider sector will support development of both the integrated sectors. The customers of the
travel and tourism company will enhance the profitability of the hospitality industry in order to
this the quality services of hospitality industry will enhance customer satisfaction level and
customer loyalty top tourism services provider. The integration of the hospitality services with
the tourism companies will leads to sharing of common customer base and helps n gaining
competitive advantage in the market and results in sharing of customer loyalty and profitability.
This results in higher profitability of both the sector (Thomas Cook and Co-Op Travel merger
gets final approval. 2017). There are two types of integration i.e. vertical integration and
horizontal integration are strategies that are developed by various industries in order to
accomplish common goals and objective to increase their profitability.
The vertical integration of two companies or different sector involves merger of the
services provided by the companies that are part of the business operation hierarchy. This
integration included sharing of task that are involved in the system of the different functions of
the travel and tourism sector. Like the travel and tourism sector is involved in various functions
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like delivery of transportation, accommodation, food and leisure activity services along with
their consultancy services with designing holiday packages. Vertical integration supports
expansion of service line and product line of particular company. Thomas cook company is
merged and acquired various type of hospitality industry companies in order to expand its
business. These hospitality industry integration with Thomas cook company leads to
implementation of similarities in functions and standard quality in company operation with
increasing a brand value in the global market (McCabe, 2010). This helps in delivery of same
quality services in different country where the company is delivering their tourism services to the
customers. The Sentido hotel and resorts, Casa cook and Smarltline are the various hotel chain
that vertically integrated with the services of the Thomas cook services in order to supporting the
company delivering better experience with company and also involved in building customer base
with sharing consumer of Thomas cook brand. The Sentido hotel chan is luxurious hotels that
serve the quality services to the customers of tourism sector to higher class people and helps in
spending luxurious time with the company. While the Casa cook is integration with the tourism
company in order to deliver various accommodation and food services to the travellers in order
to build customer loyalty by delivering standards quality of services (Xiang and Gretzel, 2010).
Easy jet ion integrated with the Thomas cook and supporting the business organisation to deliver
transportation services to the packages booked by the visitors for particular tourist destination.
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(Sources: Vertical integration of Thoams cook, 2017)
The horizontal integration referred to merger, alliances and acquisition of different
companies that are engaged in delivery of similar product and services to the customers. This
leads to monopoly in market and reduces market competition (Witt, Brooke and Buckley, 2013).
The horizontal integration helps in expansion of the market base and increases the customer base
for the company. This merger will results in higher sales of the company. The horizontal
integration of travel and tourism company like Thomas cook involves merger with the smaller
local consultancy firms and the companies operating in different country travel and tourism
sector (Mensah and Dei Mensah, 2013). This leads top capture of higher customer base globally.
The horizontal merger leads to sharing of expansion strategies in order to implementation of
similar polices in the organisation. This horizontal acquisition and merger helps ion converting
small company into0 a big enterprise. The various companies that are involved in similar type of
services as Thomas cook delivering to the customers are like Airtours, club 18-30. Manos is the
travel agency that is delivering their services Greek countries and merger with the local firm of
Greek country helps expansion of Thomas cook globally. While the direct holiday is the
company dealing in various holiday packages to the customers it results in sharing of customer
base with the Thomas cook company.
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Illustration 1: Vertical integration of Thoams cook, 2017

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llustration 2: Horizontal integration of Thoams cook, 2017
(Source: Horizontal integration of Thoams cook, 2017)
2.2 Impacts and consequences of integration.
The integration affects the merger companies to the large extent. The companies that are
gone through merger and acquisition to integrate their operations in one in order to attain more
profitability and competitive advantage in the market have larger impact of their functioning and
economy of country. The various impact and consequences of the integration of hospitality
services with the travel and tourism sector are described below (Morgan, Lugosi and Ritchie,
2010). This integration leads to change in organisation culture and structure of both the
companies and leads to sharing of some beliefs, values and norms of workplace with each other.
Globalisation: The horizontal and vertical integration of the Sentido hotel, Casa hotels
with the Thomas cook company helps in globalisation of brand and effectively capturing the
global market. The integration of various sector helps in developing and sharing various growth
strategies in order to expand business services line and market shares globally.
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Cost integration: the integration in functions of the organisation leads to sharing of both
resources and assets of the company as one. The different operation can use various resources
available to the particular business and this helps in cutting down the production cost and service
delivery cost. The vertical integration of the companies working in hierarchical sequence can
share their resources in order to maintain effectiveness in functions and reducing various costs.
Lack of knowledge: The integration of the different sector can give positive results as
well as negative results. The vertical integration with other sectors or the horizontal integration
of the companies may face problems due to different working culture and environment
(Morrison, 2013). This can be problem if the merging companies are having lack of knowledge
about the specific country cultural values and work culture etc.
Competitive advantage: The integration will leads to gaining competitive advantage in
market as the two expertise company integrate in the operation in order to attain more
productivity and profitability.
Quality: The quality for services may affect positively or negatively due to integration of
different industries. The quality of the services delivered to the customer may be hindered by the
interference of different companies in functions as they are not part of same organisation and
same working environment. Their may be better quality services delivery by merging various
strategies used in different industries in order to attain more efficiency in the functions.
TASK 3
3.1 Rational for for new hospitality business.
The rational approach to new product development in the hospitality services to integrate
it with the tourism sector should be planned and designed efficiently to achieve effective results
from developed rational. Rational development include generation of new idea of product that
targets the niche market of the travellers to increase the productivity of the travel and tourism
sector integration with the other sectors (Nunkoo, Gursoy and Ramkissoon, 2013). The
hospitality services like integration of spa, saloon, pet shop, traditional shops in the hotels and
restaurant leads to more satisfaction level of customers and helps in maintaining good
relationship with the tourism industry employee with visitors. The rational developed for the new
product development in hospitality industry is discussed below.
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Idea: This include generation of different ideas of new integration methods with the
hospitality services and the tourism industry. This involves identifying various link that can
connect the hospitality services with the tourism services in marketplace.
Market research: This involves carrying out the market research and analysing the future
expectation of the market related to particular new idea developed in integration of hospitality
services with other sector services.
Target market: This defines the target market for newly developed services delivered by
the hotels and restaurant in order to fulfil the needs and expectation of the different customers of
both the integrating industries (Page, 2014).
Target location and size of business: The locations or the visitor attraction and the size
of business largely influence the success rate of the particular new integrated product of
hospitality companies in order to influence the choices of the prospective customers.
Investment: the developed new idea and business plan for the integration of different
services along with the basic hospitality services to deliver better quality services to customer
requires planning of investment required and assets available to the company. This will results in
finding effectiveness of the business plan and execution cost of the particular new developed
product idea in the practice.
Licensing: The new business plan should be provided with the authority form the UK
government after completing all the licensing procedure to integrate the different services in the
hospitality industry like merger of accommodation and food facility with the span and saloon
fatality also.
3.2 Design a project proposal for respective industry.
The development plan of the designed rational in the practice requires various factors to
consider. This involves various marketing plans, staffing operations controlling plan in order to
effective execution of developed new business plan for the integration of services efficiently and
leading to increasing probability of both tourism and hospitality services (Salazar, Costa and
Rita, 2010). The development plan of business in hospitality industry need the following factors
consideration:
Development: This step of the project proposal involves various policies and strategies in
relation to the financial feasibility, economic feasibility, target market capacity to buy and
analysing the demand of particular new proposed business in the organisation. This includes
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planing of various factors that many affect the execution and proper functioning of the particular
business product in the hospitality industry and integration with the tourism sector.
Design: This involves designing the infrastructure matching the grand image of the
company. The design proposal for particular selected new product idea should meet the demand
of business organisation structure, culture, norms, beliefs, goals and objectives (Scott, 2011).
This includes deciding the architecture of exterior and interior of the infrastructure of the
company.
Operations: the operation of the hospitality industry should maintain the quality services
in order to increase the customer satisfaction and consumer loyalty towards the band product.
The operations like cleanliness, staffing, services delivery room services, Spa services should be
effectively delivered to the target customers in order to provide better experience to the tourists.
CONCLUSION
The hospitality services provisions affects the growth of the travel and tourism, industry
to the large extent. It can be concluded from the above defined report that the hospitality services
is having large impact of the successful implementation and delivery of various services to the
customers of the tourism industry. The growth of the hospitality industry and the tourism sector
is affected and influenced by each other. The successful delivery of quality services of the hotels
and restaurant leads to enhanced satisfaction level of the clients of the Thomas cook company.
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REFERENCES
Books and Journal
Darcy, S., 2010. Inherent complexity: Disability, accessible tourism and accommodation
information preferences. Tourism Management. 31(6). pp.816-826.
Fredman, P. and Tyrväinen, L., 2010. Frontiers in nature‐based tourism. Scandinavian Journal of
Hospitality and Tourism. 10(3). pp.177-189.
Hall, C.M., 2013. Wine, food, and tourism marketing. Routledge.
Hunter, C., 2012. Aspects of the sustainable tourism debate from a natural resources perspective.
Sustainable tourism. A global perspective, edited by R. Harris, P. Williams, T. Griffi n,
New York: Routledge. pp.3-23.
Jaafar, M., and et. al., 2011. Entrepreneurship in the tourism industry: Issues in developing
countries. International Journal of Hospitality Management. 30(4). pp.827-835.
Janta, H., 2011. Polish migrant workers in the UK hospitality industry: Profiles, work experience
and methods for accessing employment. International Journal of Contemporary
Hospitality Management. 23(6). pp.803-819.
McCabe, S., 2010. Marketing communications in tourism and hospitality. Routledge.
Mensah, I. and Dei Mensah, R., 2013. Management of tourism and hospitality services. Xlibris
Corporation.
Morgan, M., Lugosi, P. and Ritchie, J.B. eds., 2010. The tourism and leisure experience:
Consumer and managerial perspectives (Vol. 44). Channel View Publications.
Morrison, A.M., 2013. Marketing and managing tourism destinations. Routledge.
Nunkoo, R., Gursoy, D. and Ramkissoon, H., 2013. Developments in hospitality marketing and
management: Social network analysis and research themes. Journal of Hospitality
Marketing & Management. 22(3). pp.269-288.
Page, S.J., 2014. Tourism management. Routledge.
Salazar, A., Costa, J. and Rita, P., 2010. A service quality evaluation scale for the hospitality
sector: Dimensions, attributes and behavioural intentions. Worldwide Hospitality and
Tourism Themes. 2(4). pp.383-397.
Scott, D., 2011. Why sustainable tourism must address climate change. Journal of Sustainable
Tourism. 19(1). pp.17-34.
Witt, S.F., Brooke, M.Z. and Buckley, P.J., 2013. The Management of International Tourism
(RLE Tourism). Routledge.
Xiang, Z. and Gretzel, U., 2010. Role of social media in online travel information search.
Tourism management. 31(2). pp.179-188.
Online
Thomas Cook and Co-Op Travel merger gets final approval. 2017. [Online]. Available through:
<http://www.bbc.com/news/uk-england-cambridgeshire-14550184>. [Accessed on 6th
June 2017].
Thomas Cook to merge three airline operations. 2017. [Online]. Available through:
<http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/
9851228/Thomas-Cook-to-merge-three-airline-operations.html>. [Accessed on 6th June
2017].
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