Business Environment of Thomas Cook Plc: A Comprehensive Analysis

This report provides a comprehensive analysis of the business environment of Thomas Cook Plc, a global travel company. It begins with an executive summary and table of contents, followed by an introduction defining business environment and its impact on companies. The report then delves into Thomas Cook's history, organizational structure, management, and governance, highlighting its evolution from a 19th-century rail excursion to a major international travel brand. A significant portion of the report focuses on the importance and application of PESTEL analysis, examining the political, economic, social, legal, and technological factors that influence Thomas Cook's operations. The analysis includes specific examples of how these factors have impacted the company, such as political unrest, economic fluctuations, social trends, and legal challenges. The report concludes with recommendations for the company to navigate its complex and dynamic business environment, emphasizing the need for market research and strategic adaptation. References are provided for further study.

Business Environment of Thomas Cook Plc
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Executive summary
Business environment is a set of those factors that influence the operations of any company in a
positive and negative manner. Focus of the report is thus on making a study about business
environment of Thomas Cook by carrying out an analysis about its history, structure,
management as well as its overall governance and carrying out Pestle analysis. From the report it
has been found that Thomas Cook commenced its operations in the year 1841 with a vision to
fulfil the dreams of britishers for travelling in just one shilling. Since then the company has
become a big brand name in not only UK but all over the world with a presence of 22000
employees and offices in 15 nations. In this regard, the company faces different kinds of business
environment on account of political, legal, technological and social factors that are diverse in
every nation. It is thus recommended to the company that it must focus on different factors that
put an impact on its business operations and carry out proper market research in this direction.
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Table of Contents
Introduction.................................................................................................................................................5
Describe the structure of the company, its management and how it is governed.........................................5
Identify why companies may benefit from conducting PESTEL analysis...................................................6
Explain the general external environmental forces that could influence, or have influenced the company
that you have chosen...................................................................................................................................7
Conclusion.................................................................................................................................................10
References.................................................................................................................................................12
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Introduction
Business environment can be defined as the sum total of all those factors that surround the firm
and influence its operations in a positive as well as negative manner. The business environment
is ever changing in nature and carries with it a set of opportunities and risk which marks overall
future of the firm hence it should be paid attention in a proper manner (Smith and Murray, 2016).
The present study has thus made an attempt to study the business environment of Thomas Cook
Plc. which is a British global travel company started in the year 1841 (Dickinson and et.al.,
2014). Focus of the report is thus on making a study about the company with respect to its
history, structure, management as well as its overall governance. Emphasis has also been given
on finding out the importance of carrying out Pestle analysis for the company and implementing
in the firm.
Describe the structure of the company, its management and how it is governed.
About Thomas Cook PLC
Thomas Cook is regarded as one of the leading travel groups of the world that has a sales of
approximately 7.8 billion £ and 19 million travellers on a yearly basis (Thomas Cook History,
2018). As of now the group owns a large number of tour operators and a set of airlines that are
based in UK, Germany, Belgium as well as Scandinavia. It further owns a booking website
known as Hotels4u. The company is supported by around 21813 employees that work from 15
nations (Whyte, 2017). The vision of this company is to best loved holiday firm that focuses on
providing inspiring as well as personalised holiday journey to its clients. Moreover, emphasis is
also given on meeting as well as exceeding the expectation of consumers on a consistent basis.
History
Thomas Cook started because of the inspiration and dedication of this man who began the
company in the year 1841. This had a presence of one day rail excursion that began from
Leicester and ended at Loughborough. The train had a presence of 500 passengers that were
carried in open carriages’ for a huge distance of 12 miles in just one shilling (Holland and Leslie,
2018). It was from these humble beginnings that Thomas Cook launched an entire international
travel company that was there to help the Britisher’s in seeing the world. Since then the company
has been acting as true pioneer in travel industry by offering the clients with a world of new
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places and novel travel experiences (Smith and Murray, 2016). This is done by delivery of best
services and products to the consumers whose foundations were laid by Mr Cook and that are
prevalent even in today’s era.
Organisational Structure of Thomas Cook
Thomas Cook has a presence of decentralised organisational structure where board of directors
have the responsibility of delegating tasks and responsibilities to the committees as well as sub
boards. The structure has thus been found to operate on a top down or vertical fashion. The
objective is to lay an increased emphasis on the individual divisions as well as teams so as to
ensure towards a best possible management (Thomas Cook History, 2018). The structure has
thus aided in efficient decision making, followed by making the employees empowered and
relieving the burden from management (Hannam, Butler and Paris, 2014). It has also aided the
firm in preparing itself for emergency on account of self-sufficiency present in managers and
employees that makes them work in an autonomous manner.
The board of directors of Thomas Cook focuses on the importance of adhering with highest
standards of corporate governance to ensure towards effective and efficient decision making.
Structural aid is further provided to the directors so that duty is performed properly by them in
order to promote the overall success of the company so as to benefit the shareholders. The firm
has further committed itself in building a long duration shareholder value by growing the
business through acquisitions and alliances (Thomas Cook (India) Ltd Directors Report, 2017).
The overall working of Thomas Cook is supported by around 21813 employees that operate from
around 15 nations. The company gives due emphases on its staff members and provides them
Employees stock option plans (ESOPS) so as to retain and motivate the talent. The board of
directors’ further wants that the employees must be appreciated at all levels as they are aware of
the fact that without them the consistent growth attained by the firm would not have been
possible. The board of directors have further recognised the importance of gender diversity
within the employees and aims to build up the existing composition in the near term future.
Identify why companies may benefit from conducting PESTEL analysis.
Thomas cook works in a highly dynamic as well as complex business environment that has a
presence of uncontrollable forces which must be adapted by the company. Hence it is very
essential for the management to carry out an overall examination with respect to macro-
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economic factors. This leads to carting out of Pestle analysis which is inclusive of factors being
Political-legal Socio-economic, environmental and Technological factors which puts a major
impact on its overall working, Hence knowledge of Pestle is likely to aid in identifying as well as
analyzing the risk factors that can be then be used to make informed decisions (Glover and et.al.,
2017). The strategy is all the more important for Thomas Cook as it has an international presence
all over the world hence the generated information can then be used to focus on whether there
should be business expansion or consolidation within the borders. Carrying out PESLTE
analysis is further a crucial part of strategic planning process that is usually undertaken by the
company. Without having a general idea about external factors a person can never attain the set
target. The analysis aids in gaining a comprehensive insight in order to ensure that the
formulated strategies render success (Dickinson and et.al., 2014). Hence the management at
Thomas Cook must lay emphasis on carrying out a Pestle analysis so as to keep the operations of
the firm on the right track. It can further assist in intake of cost effective decisions and better
allocation of the funds.
Explain the general external environmental forces that could influence, or have influenced
the company that you have chosen.
Political – these factors play a crucial role in determining the overall future of the company. This
is as Thomas Cook has operations in diverse nations and hence is exposed to different political
systems. Hence it is required to analyse lot of factors while carrying out its business activities.
For example, the operations of the company are largely impacted due to the political unrest in
Syria has led to a decline in sales (Christian, 2017). There was also a fall in company’s UK
profits after the political unrest in mediterranean region, Hurricane Irma etc. Moreover the
falling pound in UK on account of brexit issue resulted in price hikes for Thomas cook as well as
thereby resulting in diminished demand. Other than this terrorism attacks that took place in
London during 2017 also put a significant impact on the revenue and profit figures of the
company (Yılmaz and Yılmaz, 2016). On a positive note, some of the governments such as that
of Bulgaria are joining hands with Thomas Cook so that it can invest in high-category hotels for
attracting financially rich tourists. This will not only aid Bulgaria in improving its brand image
on world tourist map but further assist Thomas Cook to get political support of Bulgarian
government on policy front.
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Economic – The company while carrying out its operations in different nations is required to lay
emphasis on varied economic factors such as inflation, interest rate, foreign exchange, recession
among others. In this regard, the labor markets over the globe are quite strong and there is also
an increase in consumer spending as well as disposable personal income. However rising
operational cost such as increase in fuel charges etc. are creating pressure for Thomas Cook as
well. Moreover the increased competition from other tour operator all over the globe is also
posing a huge problem for Thomas COOK (Cook, Hsu and Marqua, 2014). The company is
further required to be aware about various inflation rates that are prevalent in different nations
such as UK that was in recession during 2017 on account of brexit issue. Such cases may occur
in near term future as well hence diversifying its business to other nations is the best strategy
which has been followed by the company.
Social - As per the new social trends, international tourist arrivals on a worldwide basis may
reach up to 1.8 billion by the year 2030 (UNWTO Tourism Highlights, 2016). The need on part
of Thomas cook is offer the travellers with unique experiences in form of food tours, cultural,
adventure, dark tourism etc. Solo travelling is also being counted as a new trend in the present
times as according to a study there has been a 230 percent increase in women only travelers since
the past 6 years (Bond, 2018). Thomas cook is thus required to formulate a strong market research
team and keep it updated with all the new forms of travelling. The need is then to focus on what
fits the best with business needs and work on it so as to gain a competitive advantage. Other than
this various factors may further influence the choice of consumers towards Thomas Cook. These
are in form of Trust, consistency and a memorable experience which must be provided by the
company if it wants to maintain its brand image in the long run. As per a survey it has further
been found that 70 percent of the travelers wish to develop relations with their holiday service
provider (Key industry trends, 2013) .The relationship must go beyond booking and trip
payment and should be inclusive of providing support during and before the trip. This
philosophy must be imbibed in the overall mission and vision statement of the company.
Legal – the company is required to abide by laws and regulations in all nations so as to maintain
a smooth flow of operations. Not doing so can lead the firm in trouble which happened recently
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when Thomas Cook was found to breach antitrust laws over hotel pricing (Whyte, 2017). This
went against its policy of maintaining a fair and open competition and led to bad mouth of
publicity for the company. One more issue where holidaymakers pretended to suffer from food
poisoning and started to ask compensation from the tour operator also led to decrease in brand
image of the company. The claims however turned out to be false but still it put an impact on
working of Thomas Cook in a negative manner (Robinson and et.al., 2016). On the positive
front, the company is abiding by security measures wherein intensive screening of the luggage is
done at departure gates as per the governmental requirement. Other than this, the company is
also required to adhere with local laws that are a part of every nation. These are with respect to
staff training, recruitment, no wage discrimination, marketing tactics etc.
Environmental – Adhering with the norms of environmental protection is must needed strategy
for the success of tour operator such as Thomas Cook. Travellers in present times are also
bringing a change in their travel habits owing to the concept of environmental sustainability.
Hence they are making an attempt to travel to closer destinations, choose operators who are
environmentally responsible and also prefer those accommodation providers who are involved in
recycling and use of renewable energy (Robinson and et.al., 2016). Hence Thomas Cook is thus
required to lure this new set of consumers by increasing flights to nearby places and involving
itself in ecofriendly activities so as to set up a brand image accordingly. As the company has a
presence of its own further owns booking website known as Hotels4u where it is required to keep
only those accommodations that are adhering with some or other environmental friendly
practices. It has further invested around 100 million pounds by adopting a state of the art engine
and enhanced aerodynamics so as to cut the overall consumption of kerosene. This will aid in
bringing a reduction in fuel emissions and also improve sound protection (Government Heathrow
Airport announcement, 2018). With an overall increase in global warming, the world is going to
witness changing weather conditions which has a direct impact on Thomas Cook . This is as
airlines cannot work on stormy weather and if any disaster happens then difficulties may arise
for the company. These unknown disasters and others like Hurricane, earthquake, volcano etc.
are also required to be taken care by Thomas Cook and risk management strategy is required to
be formulated with respect to it.
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Technological – Tour and travel businesses such as Thomas Cook is often required to be in tune
with advanced technology so as to provide the best services to the consumers. These can be in
form of connecting with the consumers through social media, providing them with customized
booking online option; adopting a tech friendly Multiple Distribution Channel Support; Retail
Integrated Payment Gateways among others (Felicen, Ylagan and Buted, 2014). From the
secondary data sources it has been found that Thomas Cook has adopted most of the
technological innovations that are there in present times. It is required to maintain the same for
coming future as well (Gallent, Mace and Tewdwr-Jones, 2017). Although use of technological
may add to overall cost factor for the company but it can be easily maintained by increasing sales
and revenue that will arise on account of technology that provides a competitive advantage over
rival firms (Thomas Cook History, 2018).
Conclusion
From the above report it can be concluded that Thomas Cook is a well-known name in the area
of hospitality and Tourism. The company has provided a means by which travellers can see a
world of new places and novel travel experiences. The management adheres with a decentralised
organisational structure that has aided in employee empowerment, preparing for emergencies and
ensured towards efficient decision making process. As the company operates in a highly
competitive and every changing business environment hence the need is to carry out a pestle
analysis so as to aid the firm in the process of strategic planning. As per the pestle analysis a
conclusion can be drawn that the firm is required to have a knowhow about legal and political
conditions of the nation where it is operating so as to avoid any issues if any policy changes
takes place on part of the governments. In the same lines, the need is further to adhere with socio
cultural factors so as to serve the consumers in the best possible manner. Adherence with techno
logical and well as environmental factors will assist in long turn sustainability of the firm.
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References
Online
Bond, M., 2018. Women Travel Statistics and Women Travel Trends. [Online]. Available through:
<https://gutsytraveler.com/women-travel-statistics-women-travel-trends/> [Accessed on 12th March
2018].
Government Heathrow Airport announcement. 2018. [Online]. Available through:
<https://www.thomascookgroup.com/government-heathrow-airport-announcement/>
[Accessed on 12th March 2018].
Key industry trends. 2013. [Online]. Available through: <https://www.thomascookgroup.com/key-
industry-trends/> [Accessed on 12th March 2018].
Thomas Cook (India) Ltd Directors Report. 2017. [Online]. Available through:
<https://www.indiainfoline.com/company/thomas-cook-india-ltd/directors-report/564>
[Accessed on 12th March 2018].
Thomas Cook History. 2018. [Online]. Available through:
<https://www.thomascook.com/thomas-cook-history/ > [Accessed on 12th March 2018].
UNWTO Tourism Highlights. 2016. [Online]. Available through:
<http://www.dadosefatos.turismo.gov.br/images/pdf/estatisticas_indicadores/
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Whyte, P., 2017. EU Is Investigating Tour Operators Over Suspected Anticompetitive
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investigating-tour-operators-over-suspected-anticompetitive-practices/> [Accessed on
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