Strategic Position of TUI Group: Differentiation Strategy and Competitive Advantage

Running head: TUI GROUP
TUI GROUP
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1TUI GROUP
Introduction
TUI Group (Tourism Union International) is a travel and tourism industry. The company
is popularly known as the largest leisure, travel and tourism company all across the world. The
company owns travel agencies, airlines, ship cruise hotels and retail stores. The company owns
six European airlines; it is the largest holiday fleet in the Europe. The company has an ongoing
digital transformation which creates the infrastructure for destination services. The company was
founded in the year 1923. The company is the world’s leading leisure and travel company that
operates in more than 180 countries. It has around 30 million customers in around 27 key market
sources. TUI Group has 200 brands that are comprised on specialist travel agency and leading
mainstream brands (Aguiló, Alegre and Sard 2013). It provides its customers wide range of
differentiated and flexible travel experiences to its customers
Strategic position of TUI Group
TUI Group has a differentiation strategy as it focuses on increasing products in the
portfolio so that the customers meet their needs and requirements on their holidays. TUI Groups
targets to improve each area in order to increase its level of differentiation. The company
continuously reviews the products and services. One of the major competitive advantage of the
company in its differentiation strategy over its competitors is it’s maintain sector which is the
largest in the TUI Group considering its scope and size. Further the company offered Sensatory
and First Choice Holiday Villages in United Kingdom (Čavlek 2013). As compared to its
competitors like Thomas Cook, TUI obtains a higher margin majorly because of its products
offered in the portfolio. Moreover, the customers of the company book the service earlier and

2TUI GROUP
release the late market pressure. Additionally, the company offers high quality of customer
service, luxury accommodation, transportation, lost cost offers and its travel insurance, which
stimulates the demands for the products and services offered by TUI Group worldwide (Clerides,
Nearchou and Pashardes 2018).
Currently the company is increasing its focus on new markets especially in the Asian
markets including Ukraine, Russia where there is low amount of competition. The company has
gained its market position by strategically collaborating with Sun Wing in Canada. This enabled
the company to gain a competitive advantage against its competitors and Thomas Cook in the
tourism and travel industry (Pearce and Taniguchi 2018). Currently the company is having a
competitive edge over its competitors considering its low cost, flexible offers offered by the
company to its customers, and most importantly it has the largest distributors of global
accommodation. The company tactfully takes advantage of its market position to outdo its
competitors.
External environment analysis of TUI Group
Porter’s five force analysis:
Porter’s five force analysis is a management tool which helps to analyze and understand
the profitability of the organization.
Threats of new entrants
The new entrants in the industry brings in innovation and new ways of doing things which
pressurizes the organization as it has to implement lower pricing strategy, under the competitive
pressure the company has to reduce costs and it provides new value proposition to its potential