Contemporary Development: An Analysis of the TUI Company and Industry

This report provides an executive summary and detailed analysis of TUI, a major player in the global travel and tourism industry. The report begins with an overview of TUI, examining its products, services, and financial performance. It then conducts a PESTLE analysis to assess the political, economic, social, technological, legal, and environmental factors affecting TUI's operations. The report also delves into the internal elements of TUI, including market size, demand, and supply dynamics. Furthermore, the report explores the impact of globalization on the tourism industry and discusses the effectiveness of TUI's organizational responses to these global changes. Finally, the report identifies areas for improvement and offers concluding remarks on TUI's contemporary development and future prospects. This analysis is crucial for understanding the challenges and opportunities within the ever-evolving travel and tourism sector.

CONTEMPORARY
DEVELOPMENT

EXECUTIVE SUMMARY
Development is a concept which is followed by every enterprise in order to enhance their
organizational image with the help of several models. Corporate world is engaged in introducing
creative ideas at marketplace by fulfilling the needs of entire society. Their main motive is to
enhance company image by understanding consumer taste or preferences in order make
necessary changes at workplace. For this coursework, TUI is selected for understanding the
current status of travelling industry. However, assessment of macro and micro elements are
going to expressed in this report for analysing overall market changes. Along with this, impact of
globalisation is also determined and need of changes at workplace. Moreover, entire project is
outlining requirement of assessing global changes.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Overview of TUI.........................................................................................................................4
PESTLE analysis of TUI.............................................................................................................4
Internal elements.........................................................................................................................7
CONCLUSION................................................................................................................................9
TASK 2..........................................................................................................................................10
INTRODUCTION.........................................................................................................................10
(i) Relevance of globalisation and it influence on policies and competitive strategies............10
(ii) Effectiveness of organizational response............................................................................12
(iii) Areas of improvement........................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business is an essential aspect that is done for the purpose of trading products and
services from one destination to another. It is vital for the manager to make all necessary
arrangement those are useful in the manner for increase overall business of TUI company. In the
meanwhile, there are certain contemporary issues that are associated within an organization.
Some demographic changes have been challenging matters for the other companies (Settersten,
2012). Business is considering as one of the internal and external implication that are associated
with the department are mentioned under this report.
TASK 1
Overview of TUI
The TUI Company can be considered as an Anglo- German travel and tourism firm
which is headquartered in Hannover in Germany. This organization is usually known as largest
leisure, travel and tourism at global level. It was founded in the year of 1923, almost 95 years
ago. They provide several products or services such as charter, scheduled passenger airlines,
holidays packages, cruise lines hotels and resorts. TUI has revenue around €18,535 million,
operating income €1,079.7 million and net income approximately €910.9 million. They have
almost 67,000 of staff members working with them on regular basis to complete desired goals
and objectives of TUI successfully.
Business environment is all about studying of corporate changes which incurred at
global marketplace in order to design company policies by considering necessary facts or figures.
Two types of surroundings which are going to explained in this are-
 Micro environment
 Macro environment
PESTLE analysis of TUI
The tourism industry operates in a sector which has different effect on the operations of an
enterprise. It is important that while taking the distinct decisions the possible change in these
factors are determined in advance so that accordingly judgments are made which can deliver the
required returns to an enterprise. External environment can be described about all those outside
factors of an organization that impacts on operational activities. It includes two section like
micro and macro elements. Micro factors involves suppliers, competitors, wholesalers, financiers

and public perceptions. But macro components includes political, economic, social,
technological, legal and environmental which strongly effects the procedures of company. These
factors are necessary to be observe and analyze so that negative impacts can be reduced and
benefits will be attained properly.
To understand how it is effecting TUI a detailed discussion is given below:
Political – These are those factors which are distinct in every country and has to be
considered while expanding business globally (Sharpley and Telfer, 2015). It is of great
importance that before choosing the place for developing present sector the political factors of
same are evaluated. TUI is operating at a huge scale and is greatly effected by the laws which are
formulated against this sector. In order to ensure security and safety of the service users the
government involvement in tourism is high which restricts the capacity of company to grow.
Degree of risk is high in those part of the countries where there is less stability as it made
difficult for the management of TUI to take long term decisions. Apart from this the impact of
terrorism is also high on this industry as it has a direct influence on the demand for this services
as places prone to attacks are not easy to visit. Government follow strict laws against same and
limits tourism in such places.
Economic – This is the most effecting factor which though has an indirect impact on
business but restricts the profitability of TUI to a great extent. The most effecting factor under
this is the inflation rate which effects the capacity of TUI to raise its profit margins. Instability in
the economic conditions makes it difficult to achieve the target sales as in case of inflation in the
society demand for these services reduces. Thereafter taxes which are imposed by different legal
bodies further divide the revenues earned and hence the growth becomes limited to a limit
(Büscher and Arsel, 2012).
Social – Social factors consist of demographic and culture aspect of the external area.
Changes in living style make the customer more demanding for new experiences with
concentration on price. Consumer generate a new attitude of wait and see and do last time
bookings. Changes in the global economy affect the organization. Painful effect on international
travel from 2000 to 2004 happen due to recession and the health crises, such as breakdown of
SARS in 2003. Now a day’s people are more brand conscious it’s a common social factor.
People trust on the services provided by popular brand name. The brand name is developed by
their last experience or by the mouth of publicity or the advertisement activity. This make TUI to

look after their previous and post services with the advertisement campaign of the company to
develop their name in the society. Change in the attitude towards safety and environment of the
customer. The survey conducted by Boston consultancy group on “going green” inform about the
attitude of the customer. According to this survey and many other surveys which are done time
to time tell that people become more environment conscious and get attract to a companies who
have better environmental policies (Banerjee-Guha, 2013).
Technological factor: - The term technology can be described as various types of
technological equipment’s, machines or software to implement in company. This will facilitate to
carrying out different kinds of activities or tasks on regular basis ion an appropriate manner to
gain better productivity as well as profitability. Technology is helpful in several aspects as it
provides support to boost up daily outcomes and facilitate to reduce cost as well as time.
Companies are become capable to reduce their work pressure along with providing facility of
easy purchasing to customers. TUI has also introduce online facility to clients for buying tickets
and gain any kind of information regarding booking system of the enterprise. Technology helps
them to cut off staff members because it will reduce work load due top use of applications or
software in company for various purposes. It will support to decrease overall cost of production
of an organisation which facilitate to render better quality of services to consumers. It will TUI
to attract more customers along with retaining the current ones to boost up profit share as well.
They also use several innovative promotional activities and launch programmes on television
which helps them keep in touch with customers. TUI can also implement an effective as well as
efficient system of EDS planning to improve the potential which support to attain better profits
(Matanle and Rausch, 2011).
Legal factor: - This can be described as various kinds of legal rules and regulations
which are made by government authorities which is necessary to be followed by every
organisation to run their business in proper manner. Different legal policies are prepared so that
no one can harm others and each business entity can conduct their procedures easily and earn
desired profits. Different countries have established their one criteria of legal policies which are
mandatory for every organisation to follow while running their business in particular nation. It is
necessary to first observe and analyse thoroughly about legislation of particular place while
going to launch a new venture or branch of company so that goals or objectives can be fulfilled
without facing by harmful barrier. In respect of TUI, they provide facilities to customers in

different countries and hence they follow all of their legal policies regarding health & safety
measures. This will help them to make travelling journey of consumers more comfortable. TUI
have to face several difficulties while establishing their branches on other nations because they
put several restrictions on the growth of business in different parts of the world (Kontopodis,
2012).
Environmental – Last but not the least are these factors in which the working of an
enterprise is monitored so that in no way it hampers the surroundings. It is necessary for TUI to
ensure that it uses the technology which is friendly with the surroundings. ISO 14001 standards
are maintained as it is a legal framework constructed in order to secure the environment from
getting effected.
Internal elements
It can be said that microeconomic factors tend to influence business operations in a
significant manner. These elements tend to influence availability of resource and their usage in
context of an organisation. TUI is a renowned tourism company which is known to impacted
through elements which lies on the microeconomic grounds. These forces are in immediate close
to business organisation and can make sure that its functions and operations are influenced
(Moore, Dunham and Dunham, 2014). A brief description of the major elements in the
microeconomic environment are as follows:
Market size: The size of the market impacts on number of goods which are to be sold to
the prospective buyers. The determination of higher potential customers for an organisation
improves the chances of sustainability of business. The primary impact can be seen through the
number of quantities of product which are to be traded. There is an impact upon price of the
services offered as well. The rise in the demand due to market size assures that prices of services
are increased as well.
Demand: Demand is defined to the amount of services which people are willing and able
to buy at provided market prices. The demand for a particular service not only influences
decision making by an organisation but also influences prices for goods and services as well. The
law of demand has stated that a marginal increase in the price of product or service will assure
that there is decline in the supply with similar intensity. The TUI is a renowned travel operating
company which is making sure that suitable pricing strategies are formed which assures that its

goal of profit making is being fulfilled. The right understanding of the forces of demand and
supply will assure that a business is able to form right decisions for enterprise (Street, 2014).
Supply: The supply section of an organisation refers to the number of people which can
be served by the company through their endeavours. TUI have been known to organise tours and
travelling packages and is being operating at large scale when it comes to rendering services to
people in the United Kingdom market. To manage the supply in the ideal manner it is essential
for a business to take into account pricing and demand of the service. Before formulating
decision relating to business it is essential to gather a detailed understanding of forces of demand
and prices so that equilibrium could be established. Due to inflation in the market, it has been
identified that there is an increase in cost to organise tours and traveller which shoot up the
prices. The increase in the prices have resulted in marginal decrease in the supply which is to be
countered by an organisation with development of the cost cutting measures so that more and
more people are influenced in taking up travelling. It has been become crucial for a business to
make sure that opportunities in the economy can be well capitalised upon so that sustainability is
achieved (Lan and et. al., 2014).
Competitors: TUI Company is influenced by competition pose by different companies in
same industry. Large number of competitors signifies lots of demand for products and services
provided. If TUI lack competition, then they won't be able to provide better services to customers
and may lack behind from other rival teams. Main competitors of TUI are Kuoni Travels,
Barrhead Travels, The Ultimate Travel Company, Cox and Kings and Thomas Cook. Company
can build effective strategies to face the competition in better manner. TUI offers different types
of products to their customers Charter and scheduled passenger airlines, package holidays, cruise
lines, hotels and resorts. They have merged with First Choice in order to increase the market
share and give competition to others rival companies.
Distribution chain: TUI Company believes in direct distribution to the group's strategy.
Company increases direct distribution of holidays in order to lower distribution costs and also
reduces the reliance on third party distributors. This helps them to build good relations with
customers. Company is using online media to provide better customer services. By this
customer’s holiday experienced has increased and has become more user friendly (Yarber, Sayad
and Strong, 2013).

Suppliers: TUI has been following guidelines known as Supplier Code of Conduct. This
serves as a guideline to standards of ethical conduct, values and principles. Company expects
suppliers to be stick to their deals when making it with workers, agent, suppliers and off course
customers. Suppliers to TUI uphold the principles by adopting accessible and clear policies and
procedures to respect human rights and labour laws. They also support local committees, identify
and monitors environmental impacts and also maintain Quality assurance and health and Safety
policies and procedures in business where possible. TUI Travel has a global supply chain and
their suppliers are their driving force for improving company's sustainability performance.
Competitive strategy: it is defined to be long term plans which have been undertaken by
an organisation. It is an approach through which a business attempts to achieve higher
profitability and improved position in the market. TUI is a renowned retail provider which is
known to be delivering customised holiday packages to people which acts as a unique feature
along with undertaking of cost leadership approaches as services are cost lower than prices of
competitor firms.
Competitive advantage: These are referred to set of elements which puts an organisation
in favourable position when compared with its rivals. The approach of this organisation in terms
of customer management and retention have put them in an superior position in the industry.
This organisation is known to keep priority of customers above all and assures that they are
provided with differentiated experience.
Niche Market: It is a small specialised market which is being served with offering of an
organisation. The promotional and marketing efforts of an organisation are diverted towards that
specialised market exclusively. The niche market for this business are people who are looking
for specialist and activity businesses which are more inclined on quality aspects of tourism rather
than focusing on geographical reach. The major markets for this institution are UK, Germany,
Sweden and France as they account for 479 billion euros.
CONCLUSION
From the above assignment is has been concluded that Globalisation is procedure of
integration and interaction within people, organisations and government of several nations, along
with the process of international trade and investment which is helped by IT (information
technology). Apart from this it gives wide impact on economic development, political factors

and many more. Globalisation gives its wide impact on travel and tourism sector TUI is
generating more and more revenue because of the same.
TASK 2
INTRODUCTION
As an increasing branded consumer services provided company TUI is influenced by all
factors those are related with the future development and sustainability of the company. This
project aims at providing vital information about four external impacts that can influence to an
organization as well as significance to TUI get competitive advantage. Apart from this, concept
of globalization and their vital benefits are discussed under this report. Critical assessment of all
relevance to an organization and their policies and competitive planning. The effectiveness of
business is mentioned effective to get reliable outcomes in near future time. Examination of
crucial aspects those are associated with the department are mentioned effective under this
report.
(i) Relevance of globalisation and it influence on policies and competitive strategies
Globalisation is that procedure which incorporate and interaction between organisation,
companies and authorities in all over the world. With the help of enhancing global interactions
that comes for growth and success of international trade, culture and ideas in better manner.
Globalisation has presented and existing for wide range of centuries through which this will
evolving trade routes that includes bond trade, immigration and colonization. The impact of
globalisation on TUI group from a number of perspectives effectively (Barakat, 2015). The
current international recession that will directly impact on TUI group in all over the world and
there are some places which are unaffected. The globalisation can be relevance factor for the
company so this will attracting large number of customers towards organisation services and
facilities in proper manner. There are various factors of globalisation that will directly influence
on TUI group which affect on competitive strategy are described as follows: Influenced by policies and procedures – The government develop and make various
policies or strategies which directly or indirectly affect on TUI group so they need to
manage all such factors which occurs in the business organisation. There are various
factors such as enhancing available procedures, food revenue and income, technology,
etc. this is required for travel and tourism company is to follow all rules and regulation

which has been made by government bodies for their smoothly running of business
operations in proper manner. So this is necessary for them is to developing and making
all current policies and procedures in effectively (Ferguson, 2011). Impact of social ecosystem – There is no doubt that, social media has mainly affect on
travel and tourism sector for reserving tickets to share views and reviews. According to
the TUI group survey, there are around 60% travellers said that social networking has
highly influence various changes in their travelling plans. Globalisation influences the
social ecosystem so this will directly affect on TUI group operations and its functions in
proper manner. Instant communication technologies – In current time period, telephone is the one
medium of communication with their family or friend. With the help of globalisation,
they can easily interacting with their travellers and tourists who are willing to travel in
different places. They can also attracting large number of travellers who can interacting
with them through emails, telephones, Skype. TUI adopting communication technology
which help them in easily interacting with their domestic as well as international visitors
who willing to going outside for some different places. Global mobility and ease of travel – TUI group need to analysing and examining whole
market place where they conduct travelling for their tourists in different locations. They
will provide international mobility and ease in travel for their visitors effectively. The
ease of travel will assist in dealing with various issues and barriers such as frustration,
fear and expense (Shepherd, 2016). This is another factor which directly affect on travel
sector that will help in getting high amount of income and revenue from their visitors.
 Enhancing awareness of new places – The globalisation influences on tourism is mainly
creating awareness of destination and the wide range of free activities or functions,
locations and cultures to travel in all over the world. TUI need to gaining attention of
more visitors towards services or facilities in better manner. They are generating high
level of skills and knowledge of destination which is main key factor of conducting
marketing on specific location through this they will achieved by way of travel events,
shows, blogs and other forms of interactions with their travellers. Along with this,
globalisation will influences towards policies and strategies of TUI group and assist in
getting high income or profitability (Coetzee, 2014).

(ii) Effectiveness of organizational response
Globalisation is a most effective process that helps to increasing business structure on
international level easily. Through this an organisation can build positive relations with other
countries. TUI is a travel and tourism company that provide effective services to local and
international tourists. For them, it is required to expand their business structure on international
level because through this they can serve quality services to each and every tourist properly. For
a small scale organisation, it is hard to maximise their business easily in several countries while
as large scale firm respond positively on such business activities. For TUI, it can be a smart
move, so for them effectiveness of organisation's respond is given below -
Innovation and invention – Globalisation is a most effective business approach that
helps to maximise business structure on international level. In this procedure, innovation helps in
making positive changes in business strategies and services. TUI needs to make positive changes
through innovation process to getting desirable benefits and outcomes as well. Innovation is a
effective business procedure that assist to use creative thoughts and ideas in business process to
getting higher competitive advantages. Invention is also a business strategy in which employees
of firm introduce new services for their customers to capture their attention easily towards them.
These bother activities can be beneficial for TUI to getting positive respond of their globalisation
strategies (Vasudevan and Doherty, 2012). Through innovation process, employees of firm can
easily build direct relation with their visitors to provide them higher satisfaction by quality
services. Innovation and invention provide their equal contribution to rebuild new strategies of
business development process. In this business approach, advance technology provide its equal
contribution in globalisation strategies.
Employees collaboration - For management of an organisation, it is required to
collaborate positive with their employees. Through this, they can easily implement several
strategies in their business firm to getting desirable outcomes easily. Employees are the key
element of an organisation who provide their effective services and contribution to achieve
business goals easily (Kiely, 2012). So for this management needs to collaborate properly with
them to analyse their own view and opinions toward this. Through this, they can easily make
positive changes in different working approaches to getting positive and desirable benefits and
outcomes. Main objective of this procedure is to provide quality service to tourists and visitors.