Analyzing the Business Environment of TUI Group

This case study analyzes the business environment of TUI Group, including its size, sectors, competitors, and organizational structure. It also examines the impacts of Covid-19 pandemic and UK government's recovery plan on TUI's internal and micro-environment, as well as the STEEPLE factors affecting its operations.

Business Environment

Contents
INTRODUCTION...........................................................................................................................3
SECTION 1.....................................................................................................................................3
Overview of TUI group...............................................................................................................3
Size of TUI Group.......................................................................................................................4
Sectors and Industry of Operations..............................................................................................4
Direct and Indirect Competitors..................................................................................................4
Organizational Structure and Leadership team............................................................................4
SECTION 2.....................................................................................................................................5
The Impact of the Covid-19 pandemic on TUI Group's internal environment............................5
The impacts of UK government's recovery plan on TUI Group's Internal environment............5
SECTION 3.....................................................................................................................................5
The impacts of the UK government’s recovery plan on TUI Group’s micro-environment........5
The impacts of the Covid19 Pandemic on TUI Group’s.............................................................6
SECTION 4.....................................................................................................................................7
The impacts of STEEPLE factors on TUI Group’s operations...................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The business environment is unpredictable and dynamic, it fluctuates frequently and affects
the marketing and business strategies of companies. New market trends are introducing with new
technologies. The case study shows the importance of analysing business environment for
maintaining good market position and to predict future planning. Covid-19 hits industries badly,
many businesses shut down due to loss but if they perform specific research to analyse the
market and understand the current need of market then definitely they would survive in changing
environment.
Environment within the organisation is internal business environment and can be controlled
by the company. It defines the success of operations and activities by approaches taken by top
level management. It is affected by plans or policies, man power of the company, financial
planning and budgeting, interpersonal relations among different levels of company and
equipment’s used in production process.
Micro Business Environment can be described as operating environment of the business
because its functions affect performance of the firm directly. Control of micro environment is not
fully in hands of business but can be controlled at some levels. It includes suppliers of raw
material and other factors of productions, Resellers who acts as an intermediary between
consumer and business.
Macro Business Environment affects the operations of business externally and cannot be
controlled by the firm but can predict in the long run only. This surrounding is determined by
economic policies, environmental changes, legal rules and regulations, political stability and
technological enhancement (Lang, and Zhao, 2020).
SECTION 1
Overview of TUI group
TUI group is the largest hospitality and tourism group of Europe founded on 9th October
1923 then after merging many leading groups it become TUI group. It is an international
organization which offers a wide range of services and products like airlines, hotels, and cruise
ships. There are around six European airlines under TUI group connected with approximately
eighteen hundred travel agencies. Products offered by TUI are scheduled passenger airlines and
charter's, package holidays or cruise lines (Forrest, 2018).

Size of TUI Group
The multinational tourism and hospitality groups TUI reported a fall in their revenue over the
previous financial years in 2020 and 2021 due to covid-19 pandemic. In the year 2020-2021, the
revenue of company is $4.7 billion, indicating loss of around $14 billion in comparison to pre
pandemic situations. TUI group has a base of more than 7,7000 employees who work hard with
dedication to deliver best services and fulfil their promises. They have large number of satisfied
customers. TUI's portfolio is broadly combines under the brand Umbrella who operates five
airlines with more than 400 hotels and 1500 air crafts in the industry.
Sectors and Industry of Operations
TUI is presented across the world offering their hospitality services to almost 21 million happy
customers annually but their core business targeted market is European market. However, TUI
also works on acquisition strategy and analysed market for their expansion moves by reducing
competition from small entities and new entries. They work in cruise industry with four ships
with luxury facilities in the German market. Their collaboration and joint venture offers premium
services. Cruise services offered by TUI in British market are Marella cruises with four liners
and fleet with seven vessels.
Direct and Indirect Competitors
TUI is leading in the industry but still face competition from many local hotels businesses,
airlines and cruise service providers and from international competitors as well. TUI does not
have monopoly in the market. There are competitors who distributes their market share and
influencing TUI's strategies. The main rivals of TUI group are Carlson Wagonlit Travel, Thomas
Cook plc, Transat, Holiday break, Sunwing, Sealink travel group and Flight centre travel group.
This is only few number of TUI's rivalries, there are many more remaining (Niland, McCreanor,
and Lyons, 2019).
Organizational Structure and Leadership team
The management team of every company is an important reason for the success of business their
strategic decisions and coordination with stakeholders and other employees determines the
growth rate. TUI group is a merger of two well-known and successful companies that are TUI
AG and TUI travel PLC. Current deputy CEO is Friedrich Joussen and Chairman of board is
Dieter Zetsche.

SECTION 2
The Impact of the Covid-19 pandemic on TUI Group's internal environment
Tourism and hospitality is the most affected industry during pandemic affecting economies
and businesses. Pandemic damages TUI group badly in all their business whether hotels or
airlines. Global restriction on crossing boundaries of countries even with in countries stops
peoples from travels and hotel stays which have a negative effect on TUI earnings. Their
operations shut down during Covid year which raised their operational risks. However,
businesses have control over internal environment but Covid made every small thing
unpredictable. TUI suffered from huge customer loss because their regular or trusted customer
would come back but new customer database could not have prepared. Pre prepared plans and
policies had wasted due to sudden restrictions. Due to health issues efficiency of employees
affected. Physical resources become expensive. Work from home trend caused in reduction in
coordination between man power. TUI also suffers from lack of financial and market resources.
But their risk managers and decision makers performed effectively throughout the pandemic and
there have been no significant effect or failing seen. The data reported a loss of approximately
68% in ticket booking in comparison to pre pandemic year (Lee-Ross, and Pryce, 2021).
The impacts of UK government's recovery plan on TUI Group's Internal environment
United Kingdom's government made a recovery plan from the damages caused due to
Covid-19 pandemic to tourism sector. This recovery plan aims to build back UK as the most
desirable tourists destinations in the world by supporting the businesses in tourism industry. TUI
group will also be benefited from recovery plan in context of increasing tourists. Plan is
providing a framework to increase environmental management and technological advancements.
Government also plans to help service providers financially to improve services and suffer loss.
Plan also indicates that government will host some business and tourism events to initiate more
and more tourist activities (Asif, Safdar, and Ali, 2020).
SECTION 3
The impacts of the UK government’s recovery plan on TUI Group’s micro-environment
Tourism is a social, cultural and economic asset. This is a major contributor sector towards
the jobs and growth in the UK. They employing indirectly 4 million people and stablish the
direct economic contribution of £75 billion in pre-pandemic year. UK government acted swifty

in the whole pandemic, helps in providing a range of both pan-economic and targeted support to
protects the businesses and jobs across the tourism industry (Houghton, 2018).
 Suppliers and the distribution channels: Suppliers are one of the main factor of every
business because they provide all the important production factors which are required for
the smooth operations of the business. On the other side in the distribution channels, all
the factors are related with each other, retailer depend on the wholesaler, wholesaler
depends on the manufacturer.
 Customers: In every business customer are the most essential and important asset. To be
successful in the market the company should focuses on the wants and needs of their
customer.
 Employees: The man power of the company is an important factor of production. The
availability of highly qualified workers plays a virtual role in success of the company as
well as highly motivated employee also contribute in the success of the company.
 Shareholder: Shareholders are also the part of the business as they get ownership in the
company and demand for dividend. Paying dividend to the shareholder on the time
company has to earn profit and has to maintain a right balance for the liquidity in the
business.
 Media: Media also effects the ongoing business. It becomes essential for the business to
maintain better relation with the media (Malarkodi, and Ranjitha, 2021).
The impacts of the Covid19 Pandemic on TUI Group’s
Covid19 effects the overall business of TUI Groups. Pandemic across the world implies
restriction on people form going out which huge effect the tourism companies. TUI has been
severely affected due to the travel restrictions, slew of negative press, flight suspension is some
of the issues faced by TUI group's. During the time of pandemic TUI has decreases its
cancellation fees and if the customer chooses to rebook their cancelled vacations rather than
requesting or funds they offers 20% of bonus to the customers. Another additional of 20% bonus
offered by the company to the customers separately to refund credit notes. Due to pandemic TUI
extended suspension of its cruises and holidays. All the holidays packages were cancelled about
900,000 holidays were cancelled. The new trend of work from home effect the efficiency of
work. Business travels meetings take place of online meetings which also effect the TUI business
(Kulak, 2019).

SECTION 4
The impacts of STEEPLE factors on TUI Group’s operations
 Social factors: By understanding demographic factor, customer pattern of spending,
power structure helps the TUI to choose the target market in which there is high growth
scope. TUI Group marketing department can utilize information from social analysis to
target the market and after that they can increase the production of products offered by
the potential buyers.
 Technological Factors: A deep analysis of technological environment helps the TUI
groups to utilize and captured the trended technology to utilize business advantages, like
increasing in operational efficiency, increasing in profitability of the business. Adoption
of new technology helps the TUI, because the efficiency of the machinery increases
which reduces the cost and that's helpful in producing the good quality of product.
 Economic Factors: Increasing in economic growth offers wide range of opportunities to
the TUI group. The ability to continue its growth strategies in long term this will
determine by the GDP growth rate. High GDP states that consumer's ability to pay more
on a product. TUI group should carefully considered the rate of interest because it
influences the ability of borrowing and motive towards investment but the high rate of
interest encourages the motive towards investment and increases the various growth
opportunities (Rapp, M.S. and Strenger, 2018).
 Environmental factors: There are some of the regulations and laws for environment
which the TUI group should take into consideration while doing business operations. TUI
group can attain benefit by the investment in renewable technology to gain long term
efficiency and sustainability. They can use eco-friendly product because of increasing in
demand of the product day by day and can take advantage of this trend by adopting eco-
friendly products in business practises to win customers trust.
 Political Factors: TUI is currently available in different countries, each country has their
own politics. Instability in the global political environment can set limit to the growth
opportunities available for the TUI group. Increasing in the environment uncertainty can
effects the business performance so, that become important for the TUI group to analyse

the current trends as change in government policies may change the government priorities
towards the different industries development.
 Legal Factors: For the TUI group it's important to consider careful evaluation of some
legal factors which are essential to avoid getting into some trouble. If this circumstances
ignored by the TUI group then they may face some issues like bad competitive advantage
as a result of intellectual property rights violation and due to the violation of employee,
consumer the organisation image can be damage. That's why TUI group should provide
secure and good work environment to the employees (Gandolfi, 2020).
CONCLUSION
Hence, concluded from the above report, TUI group is highly effected by the impact of
Coved19. To overcome from the covid19 impacted TUI needs to take some strategic measures
by considering the health factor of the people. By taking effective safety and hygiene measures
helps the TUI business to retain their old customers. After the Covid19 pandemic whole business
world is shifting towards the technological advancement, Improvement in technology helps the
TUI to achieve higher profit in the market. As TUI is a multinational company as the economy of
other countries start recovering after the Covid19 impact, and that will open a new market place
for TUI. To increase the efficiency in work TUI can use customer’s data to know their future
moves and offer deals according to that helps to recover from the covid19 effects.

REFERENCES
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