Thomas Cook PLC: A Comprehensive Business Environment & PESTLE Report

This project provides an analysis of the business environment of Thomas Cook PLC, focusing on marketing prospects and external factors. It includes a PESTLE analysis to evaluate the political, economic, social, technological, legal, and environmental influences affecting the organization. The report details the company's structure, management, and governance, highlighting the role of the Board of Directors and its relationship with stakeholders. It also examines the purpose of PESTLE analysis in identifying potential risks and opportunities, aiding in strategic decision-making and organizational development. The analysis emphasizes the importance of understanding the external environment for ensuring the company's success and sustainability in the international tourism industry. Desklib provides similar solved assignments and past papers for students.

BUSINESS ENVIRONMENT
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Executive summary
The summary in the project speaks about the prospects regarding the marketing and the
scenarios relating to the business environment simultaneously. The summary explored in this
prospect is regarding the business environment. Moreover PEST analyses has been provided
in the project which speaks about the external environment analyses for the organization
simultaneously. The prospects in the project are inclined towards the external environment
and the marketing analyses. The organizational aspects in this sphere are inclined towards the
development in the prospective environment. External environment is the prime concern in
the organizational sphere and needs to be taken note simultaneously
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Table of Contents
INTRODUCTION......................................................................................................................4
Describe the structure of the company, its management and how it is governed......................5
Identify the purpose of PESTLE analysis for a business organisation......................................8
Briefly discuss the PESTEL factors...........................................................................................9
Conclusion................................................................................................................................11
Reference List..........................................................................................................................12
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INTRODUCTION
In the modern era of internationalisation, understanding the business environments has
become essential for any company of every industry to ensure success and sustainability of its
business. The various aspects in the organization are mostly related to the external and
internal functioning of the organization simultaneously. The increase in the functioning of the
organization can be meet by the effective implementation of the policies in the organization.
Business Environment does play an important role in the effective implementation of the
policies of the organization simultaneously. It is the environment mostly inclined toward the
competitors prevalent. The effective changes in the environment are possible through
innovation in the working environment which can meet the deficiencies available.
.
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Describe the structure of the company, its management and how it is governed
Overview of Thomas Cook PLC
The organization is one of the largest tour operators in the country. The company is operated
by the Board of Directors panelled with the core group in the form of audit committee,
remuneration committee, nomination committee, health, environment, safety committee and
disclosure committee. The committees in the company are operated by the group of members
from different divisions. The committee is operated by the Article of Association. Article of
Association provides the structural framework along with the guidelines for performing the
functions of the company. The operations of the organization are operated in a synchronised
manner. Thomas Cook Group Boards Appointment Policy is the sole authority to appoint and
appointment is strictly based on merit.
The company established itself as an international tour organization in the year 1841. The
company organized three excursions during summer season where the travel was arranged
through rail. It was the first company to organize a mass tour in the year 1841. With time, the
company progressed into various fields of the travel and tourism sector and partnered with
small tour operators to expand their business in the international territories. In the present
market, the company serves more than 22 million customers and have recorded sales
estimating £8.5 billion (Thomascookgroup.com, 2018).
Thomas Cook Plc follows hierarchical organizational structure. The organizational function
of Thomas Cook is governed by a Board of Director (Thomascookgroup.com, 2018b). There
are one Non-Executive Chairman, two Executive Directors and 5 Non-Executive Directors.
There are different Non-Executive Directors to governed each board. Presently, respected
Frank Meysman is the Non-Executive Chairman, who appointed chairman designate in 2011
at Thomas Cook. Tow senior officer, Peter Fankhauser is the Chief Executive Officer (CEO),
appointed in 2014 and Bill Scott is the Group Chief Financial Officer, appointed in 2012. Mrs
Dawn Airey is the Senior Non-Executive director who is appointed in 2012.These two
officers assist the Non-executive chairman to supervise function and operation of Thomas
Cook. The independent non-executive directors and their appointment years are - Warren
Tucker (2013), Martine Verluyten (2011), Emre Berkin (2012), Annet Aris (2014), Lesely
Knox (2016), Jurgen Schreiber (2017) and Paul Edgecliffe-Johnson (2017).
Stakeholders
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The stakeholders are a group of people or organization who is concerned about the particular
industry and organization. Stakeholders have the potentiality to affect the business market of
an organization or industry. The stakeholders of hospitality industry are employees,
customers, investors, suppliers, society, several government and non-government bodies.
Thomas Cook is leading the current international hospitality industry with the aim to grab the
international competitive market. They prioritize their stakeholders to enhance business profit
and area.
Relationship between the Board of directors and the Stakeholders
The Board of Directors of Thomas Cook is responsible to take care of the stakeholders. The
board members set up the vision as the key to achieve better market position. Presently the
board has published their vision for 2020 to put their special focus over sustainability efforts
over medium to long term process (Thomascookgroup.com, 2018a).
The Shareholders: The shareholders of Thomas Cook are entitled to attend the Annual
General Meeting which is governed by the Senior Independent Director and assisted by the
Executive Directors. The Group CEO conducts an investor relations program with the
investor based on half yearly released financial reports.
Employees: The Group CEO of Thomas Cook sets up an Annual employee engagement
survey and Quarterly segment employee forum in order to engage and motivate the employee
for their better performances.
The Public (Corporate Social Responsibilities): The Board of Directors constituted a CSR
committee, who provides the annual corporate governance report of Thomas Cook. CEO
oversees the report of annual Corporate Social Responsibilities to get the clear concept about
the impact of their business and how to improve it.
Functioning of the Board
The Board to the Appoints Committee follows the UK Corporate Governance Code. The
committee makes its appointments on the basis of merits. All the committees provide the
update to the Board Committee which after detailed analyse provides the results. The Board
with the help of Nomination Committee reviews the functioning of the organization. While
discharging the duties the Board has to take note of the present prospects along with the
future possibilities. The Board takes into account unforeseen contingencies, strategies,
operational requirements, business model along with the possibilities for enhancement of the
organization before coming to a conclusion. Risk management takes note of the future
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changes that might occur and accordingly contingency measures are undertaken. Chief
Executive Authority is entrusted the responsibility and is at the top of the hierarchy. The
Chief Executive Authority is entrusted with the task of initiating the proceedings that are to
be operated in the organization. Presently Peter Fankhauser is the chief executive officer of
the organization.
Hierarchy of the Organization
The Board is chaired by Non-Executive Chairman in addition to the Chairman. There are 103
executives operating in the organization. Every committee of the Board includes Non-
Executive Directors. The hierarchical pyramid in the organization is chaired by the Chief
Operating Officer. He is entrusted with the responsibility to operate the functioning of the
management. The Chairman is appointed by the Board of Directors. The Chairman at the top
of the hierarchical chain functions after co-ordinating and synchronizing the activities with
other members of the committees.
Relationship between Board of Directors and the Company officials
The responsibility of the organization members towards the functioning of the member of the
organization along with the third parties of the organization has to be in a synchronised
manner (Folger, 2017). The cooperation of the organizational members in the organization
has to be accountable in nature. The meetings conducted half yearly or the annual general
meetings are to be maintained in the minutes of the meeting and had to be maintained
regularly. The responsibility as regards to the projection of policies has to be ascertained
frequently. The initiation of the proceedings with regard the management has to be
configured in a systematic manner. The Board of Directors principle responsibility in the
organization is to directing the activities of the organization along with meeting the interests
of the stakeholders along with the shareholders. Board Meetings should be held at least four
times during an accounting year so that the functioning of the organization can be reviewed
and faults if any are to be rectified in a simultaneous manner.
The ultimate authority of the Board of Directors rests with the shareholders. Shareholders
keep on fluctuating as the number of shares they incur keep on changing with the number of
purchase and sell of shares. The shareholders fix the meetings and the number of Directors to
be enrolled in the Board. The role of the Board of Directors is to determine the aim and
prospects of the organization, which sets the pace of current developments along with future
developments. Reviewing the company functions, determining the companies’ policies,
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reviewing and evaluating future and present prospects, determining strategic functions and
the once to be incurred for the development of the organization. Delegating authority to
management, monitoring relations with shareholders, understanding and taking note of the
interests of the stakeholders along with the shareholders. They are at a position of trust and
so can be held responsible for the functions of the organization. Shareholders have the
authority to remove the Board of Directors from the office. This is the immune authority
entrusted to the shareholders from the Articles of Association. Directors are responsible that
proper books of accounts are maintained simultaneously. The minutes are to be recorded un
every Board meetings. The Directors must exercise their powers for the development of the
organization. Directors must take into account the interests of the shareholders. They must act
with due care and meticulousness. The meetings can be called at the call of the directors. In
case of any conflict between the interests of the employees and the company the interests of
the company are to be upheld.
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Identify the purpose of PESTLE analysis for a business organisation
PESTLE analysis is one of the vital aspects in an organization. It the analyses of the political,
economic, social, technological, legal and environmental (Szukits, 2017). The analyses are
external in nature and helps to identify the risks that might come up and correct them
simultaneously. The analysis helps in the decision making which is fruitful and effective in
the execution simultaneously. The analysis is required to analyse the impacts that might come
up during the course of activities in the organization significantly (Bryman, 2013). The
analyses help in the understanding the changes that might occur in the organization
accordingly. It is a effective measure to curtail the deficiency prevailing in the organization.
It helps to analyse and create a framework in a much simpler manner. It also includes cross-
functional abilities and skills. If the PESTLE factors are properly analysed it helps to
decrease the negativity that may be a threat to the organisation. As it is an external analysis, it
involves the judgement of the threats and opportunities that come externally. After assessing
the PESTLE aspects, the organisation encourages and develops strategic and practical
thought accordingly. The organisation is also provided with a mechanism that helps to
identify and go through new opportunities in order to internationalise and expand globally
and assess about the effects of venturing to a new market. In order to bring out the maximum
benefit from the PESTLE analysis, the organisation should identify the new trends that need
to be brought about. Effort and time is the only input that needs to be incurred for putting up
the environmental scanning for a PESTLE analysis. Identification of the factors that are most
influential for the organisation those will visibly affect the launching of a new product,
program or service in the target market. A strategic planning method reduces external threat
to the organisation related to business. It involves advantages like cost effectiveness, provides
a better business understanding, being alert to threat. Information derived from the PEST
analyses helps to ascertain whether there are contradiction and to meet the contingencies
simultaneously (Baker, 2014). It helps in cost effective decisions and better allocation of
funds. Companies want to optimize their market in the global sphere and these are possible
through PEST analyses. It acts as an effective technique in the functioning of the
organization.
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Briefly discuss the PESTEL factors
The pestle analysis of Thomas Cook Plc is listed below:
Political factor: As per the Chartered Institute of Personnel and Development coalition,
government’s expenditure cuts are going to result in almost 0.7 million-job losses within the
public sector (Wise et al., 2015). The hospitality sector as well as Thomas Cook is in the
public sector therefore their workers are facing problems of redundancy. This governmental
announcement would of course effect on the employee conditions within Thomas Cook and
this organization could be facing trouble with employee retention policies
(Thomascookgroup.com, 2018). On the other hand, changing political decision regarding
Brexit is also affecting the current export and import business of Thomas Cook. Internal tax
reduction as well as tax reduction on the businesses among non-EU organizations and
Organizations within UK would help Thomas Cook in trading related operations. The
hospitality sector in UK has confronted noticeable pressure from the government of UK
currently (Thomascookgroup.com, 2018).
Economical factor: The travel and tourism business is an important economic part of the
United Kingdom and this sector has induced and indirect impacts on the country’s economy.
Changing policies related to the economic conditions of UK also affects the policies and
functions of Thomas Cook (Thomascookgroup.com, 2018). The rising inflation rates in
United Kingdom is affecting the direct investments of this company and increasing the risk of
less price competitiveness across the international market. Uncertainty related to the business
environment could also be increased due to the constant rising of inflation rate within UK.
This condition would affect on the expenses and costs of business operations of Thomas
Cook Plc. This increasing rate of inflation and unstable financial condition across UK has
weakened international travel influencing customer’s disposable income (researchgate.net,
2018). Fluctuation of oil prices, rising rate of unemployment along with currency rates have
negative impact on the business growth of Thomas Cook.
Social factor: Unemployment issue and other governmental cuts would potentially affect in
limited disposable income for consumers. As per the current market scenario in UK, it could
be said that almost 12% of the customers are spending nothing on the non-essentials. This is
happening due to the reduction in disposable income. This decreasing per capita income
would be affecting on the spending capacity of customers on package holidays ands this
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present scenario would influence on the profitability issue of the hospitality industry by
reducing the profit margin of Thomas Cook significantly (Thomascookgroup.com, 2018). On
the other hand, the spending cuts would mean that businesses within the travel and tourism
sector such as Tomas Cook Plc would have to cut their budgets as well as most likely to
apply low-cost travel policies like Rynair and Easy jet. These above-mentioned conditions
would affect on the customers arrivals for the hospitality industry. Requirement for the
products and services provided by the hospitality industry normally develops as most people
desire to travel for recreation (researchgate.net, 2018). This condition is reliant upon disposal
income that makes sure socialisation as well as spending.
Technological factor: Technology factor is an essential factor in the organization.
Technology has tremendous impact on the development of the organization. Technology has
to be upgraded to enhance the functioning of the organization simultaneously .In this project
tourism has been identified and in order to enhance in the growth prospects of the
organization technology up gradation is a vital sphere. To eliminate uncertainty in the
functioning of the organization the technological configurations are to be ascertained and
changes should be implemented simultaneously. To boost the tourism sector the enhancement
of the organization in terms of technology are to be ascertained significantly. New ways of
meeting target markets, initiating effective communication, initiating new ways to develop
marketing scenarios are to be effective ascertained. Moreover, the scenario with regard to
cost effective measures in the functioning measures in the technology are to be initiated
accordingly. The technological measures are to be implemented in order to curtail the
ineffectiveness prevailing in the organization simultaneously. The effectiveness with regard
to the implementation of the technological aspects can be ascertained by the developments in
the sphere of tourism simultaneously. Technology plays a pivotal role in the function of the
organization simultaneously (Bortolotti, et al., 2015). Technology does help in the effective
implementation of the development in the organization. Technological factor in a tourism
sector has a great potential to replace hum labour that is quite expensive, which avoid
customer service issues. However, a lot of unwanted consequences may occur due to
technological advancement. E-commerce for Thomas Cook has led to an increment of online
booking facilities with the help of internet. This made the company close some of main street
stores. Social media has also diversified the business with online booking of tour and travels.
This is also an obvious advantage for the company.
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Environmental factor- Environmental factor is one of the pertinent factors in the
development of the organization (Fang and Wu, 2013). The development of the organization
does take into account the environmental aspects in the scenario. This has become important
because of the scarcity prevailing in the field of raw materials, doing business, target markets,
and doing business in a substantive manner. The organizational scenario can be ascertained
by the effective implementation of the factors ascertained .The effective implementation in
the factors tend to provide the changes in the development of the tourism industry
simultaneously. The effective implementation in the policy scenario would tend to provide a
scope in the effective execution of policies ascertained. Sustainable source of acquiring the
product is necessary in order to develop in the field of tourism. The effect in the environment
does play a pivotal role in the execution of tourism policies. The environmental aspects in the
organization has to be ascertained with regard to the fluctuations in the market.
Legal factor- Legal factor does play a pivotal role in the organization. The legal scenarios
are to be ascertained in an effective manner to eliminate the faults. Any legal issue would
hold the tourism sector in injunction for a time being. Any legal issues are to be ascertained at
the earliest and need to be rectified simultaneously. In this scenario the legal issues can
mainly be regarding the land dispute which might be ascertained during the proceedings of
the organization simultaneously. The legal aspects in the organization can be settled by
mutual consent between the parties in the organization simultaneously. The issues if
ascertained in the proceedings of the organization can be injunction for the time being. Once
the issue is taken in the Court the issue might take hearings continuously (Scott and Davis,
2015). The effective implementation in the proceedings is possible through mutual consent in
the proceedings of the organization simultaneously. The negotiation has to be ascertained by
the effective conciliation and mediation proceedings in the organization simultaneously.
Legal issues tend to be the issues ascertained in the government proceedings and one of the
parties in the negotiation is the government parties in the organization simultaneously.
Negotiation is the prime medium in eliminating the issues related to the legal scenario
(Njoroge, 2014). Legal factor in an organisation plays a very important role. In order to
eradicate faults, the legal aspects are to be assessed. Similarly, a tour and travel company also
need to follow a set of legal rules and regulations. Tourism industry has to focus on the risk
management or they may lose market shares. With respect to Thomas Cook, the high cost
visa application can be reduced in the UK, increment for bookings with Thomas Cook could
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be attracted by air passenger duty. There are some holiday destinations that face political
unrest, like, Egypt and Tunisia. The bookings for these destinations needed to be cancelled.
Conclusion
The aspects in this project speak about the trade prospects in the functioning of the
organization simultaneously. PESTAL analyses have been ascertained in this project which
speaks about the external environment during the course of proceedings of the organization.
The aspects in this scenario relate to the functioning of the organization along with the
functions of the Board of Directors and their relations with the management authorities there
under. The authorities functioning has been discussed and the minutes should recorded in the
proceedings simultaneously. This is a project on the organizational functioning along with the
detailed analyses regarding the same.
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