Business Environment Analysis of Thomas Cook and Transport for London

This report provides an analysis of the business environment for Thomas Cook and Transport for London, covering aspects of private, public, and voluntary sectors. It describes the organizational functions of both companies, emphasizing their relationship to achieve common objectives. The report includes a PESTLE analysis to show the positive and negative impacts of the macro-environment on Thomas Cook, and a SWOT analysis outlining the company's strengths, weaknesses, opportunities, and threats. Furthermore, it explains the relationship between strengths and weaknesses in relation to macro factors, offering a comprehensive overview of the business environment affecting these organizations. This report also describes about the impacts of political, economical, social, technological, environmental and legal factors on the business. This document is available on Desklib, a platform offering a wide range of study resources for students.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
P 3 Relationship between different organisational functions......................................................1
P 4 Positive and negative impacts the macro environment.........................................................3
P 5 Swot analysis of Thomas cook.............................................................................................5
P 6 Relationship between strength and weakness from macro factors.......................................7
CONCLUSION................................................................................................................................8
REFERENCES .............................................................................................................................10

INTRODUCTION
There are certain factors that can be or cannot be controlled by the organisation but can
scatter their impacts on the performance of their business. They even influences the turn over
and their working (Aterido and et. al., 2011). Sometimes survival of company is not possible
without them. Business environment contains those factors. There are two types of environment
namely macro and micro . Macro-Environmental contains political, economical, social,
technological, environmental and legal factors. While micro environment includes strength,
weaknesses, threats and opportunities of enterprises. The present report is based on the business
environment of Thomas cook and Transport for London. In this project three major sectors are
described namely private, public and voluntary sectors. The National Trust is one of the
voluntary organisation of UK. Their size and scope of also described. The relationship between
different organisational functions and how they link to objectives and structures are also
explained here. The positive as well as negative impact of macro environment and how these
factors relates to micro-environments is also described here.
TASK 1
Covered in PPT
P 3 Relationship between different organisational functions
The are several organisational functions of all enterprises but have a common objectives
to earn profits. The relationship between Thomas Cook and Travel for London are explained
below:
 Production: Thomas cook having the aims to give quality services and luxurious
facilities to their travellers by providing them high quality foods, making adventurous
holiday packages, giving them proper sleeping as well as sitting facilities (Bharadwaj
and et. al., 2013). Travel for London also have the similar motive to keep satisfied their
users by providing them services according to their wishes.
 Research and development: Thomas cook has are doing a deep research for
determining the current demand of their customers by examining their life style and
population growth. After examining they made a report and manufacture their goods or
services according to that report so that they can easily satisfy their users. Because of
that large number of travellers chooses this organisation for travelling purposes. Travel
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for London also do the same task by conducting research on demands of their
consumers. They cautiously determines religions, culture, festivals, etc. of their users
and make their holiday packages as per that. For example at the time of new year,
Christmas and several other occasions , people generally travels in large number. As this
is public travel agency,ticket prices are quite low in comparison to those of private one.
So, large large number of people that are in middle class prefers it most.
 Purchasing: Both of the corporates are trying to purchase best quality of resources like
they buy flying jets or aeroplanes of high speed and good quality , healthy food materials
to prepare their own delicious foods, etc. in lower prices in order to provide services at
minimum prices to their passengers (Blanchard,Tolbert and Mencken, 2011). Both of
them offers online business whereby tickets get booked by home only from their official
website. This assists in decreasing the number of road accidental cases and also aid in
minimizing the level of crowd at airports.
 Human resource management: Both of the enterprises are using the activities of
human resource management. HRM assist in recruiting large number of skilled
employees in corporate. Skilled workers are those employees who have best
communication skills, can speak up most 3 languages, can perform both day as well as
night shift work of eight to nine hours, having better interpersonal and intra personal
skills, etc. They hire employees who have good driving skills as thousand of lives
depends on the single driver (Boons and Lüdeke-Freund, 2013). If they are selecting
freshers then it is their responsibilities to arrange them training and development
programmes of at least 5 to 6 months so that they can learn how to drive effectively in c
rowdy areas.
 Accounting and Finance: It is a risky task of calculating of all the income and
expenditure. So, for this they are utilising modern software like Ms-excel, Spreadsheet,
ubuntu, etc. Calculation gets automatically done writing formulae only. This reduces the
physical errors and also reduces the time periods. They are using effective modes of
communication like social media (Face book, twitter, What's app, email, video
conferencing, etc.). Now employees can attend meetings of their seniors without getting
physically present. Thomas cook uses the divisional organisational structure. This assist
them in enlarging their services or functioning across all branches. Firm consist of
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different product lines and those get splitter into several regions like marketing, human
resource management, financing, etc. On the other hand, Travel for London uses matrix
structure. This gives them malleability in terms of several functions of their business in
relation to those of hierarchical structure. Here employees work under the leadership of
different managers because they are offering different types of services. This structure is
working as per the demand of consumers.
P 4 Positive and negative impacts the macro environment
The impact of macro-environment can be seen by doing pestle analysis of Thomas cook
that are described below:
 Political factor: The political factors are affecting at large extent the performances of
organisation. According to CIPD, spending cuts of coalition government causes major
loss of job that is around 0.7 million in the public sector (Bryman and Bell, 2015). This
occurred redundancies and due to this team spirit, motive and productiveness of left
employees gets more effected. This negative effects can be minimized by handling those
redundant employees sensitively in order to gain trust of remaining workers.
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source 1: SWOT Examples, 2017

 Economic factors: In travel and tourism economical factors are concern as they give
impacts on the demand, cost and profits. The holiday packages are fluctuating in nature
as earning from that are minimizing or maximises. This led a significant effect on the
demand of consumers.
 Social factors: Limited expendable income gets occurred due to redundancies and other
government cuts. Economy of the UK is very strong whereby disposable income of
clients are rising and hence there are large amount of revenue that is getting spend on
leisure which rises up to 6 % (Cai and Yang, 2014). So, levels of exception gets higher
from the sector of travel and tourism. People are going to spend their holiday in abroad
and therefore demand of tourisms are at its peak.
 Technological factors: Thomas cook are using various modern technology in order to
increase their performance. They are using internet based techniques and offering their
business online. Now people become independent and can plan their own holidays by
booking from their tickets of different places. By using social media like Face book,
What's app, twitter, email, video conference, etc. employees easily contact their clients
and plans for their holidays (Cavalcante and Ulhøi, 2011). They also can attend meeting
organised by their seniors via video conference or calling. They use updated software like
Power point in making presentation of their business in order to attract their customers.
 Environmental factor: This also impacts on organisation by increasing or decreasing the
number of travellers. People generally wants to visit natural places like hilly areas, seas,
mountains, etc. so that they get feeling of freshness and spend their some of time in
pollution free environment. In order to reduce pollution, company should take use those
vehicles that are emitting less amount of carbon dioxide in nature.
 Legal factor: There are certain rules and regulations led by government like tax
imposition that majorly impacts on turn over of corporate. Most of the revenue of firm
goes on paying these taxes only. Additionally, as company is operating their business
globally, they have to face fluctuation in value of currency of several nations. If it gets
lower then they have to suffer from loss and when it gets higher , they gain benefits from
that. Certain rules are made by government like prohibition of child labour, restriction of
smoking and drinking alcohol, etc. If any passenger will find smoking and drinking at
public place, then they will get punishment by government.
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P 5 Swot analysis of Thomas cook
Thomas cook company is the oldest and largest British travel company in the U.K. and
all over the Europe comes under the Landon Stock Exchange. Established in June, 2007 merged
with successful business organisation Thomas Cook AG owing also a tour website. The
company mainly runs in Five main places Germany, east Europe, West Europe, U.K. And
Northern Europe. Innovation, Credibility and privatization offered by the company drawn people
from all over the world,which serve approx over than 19 million travellers and offers the comfort
them in their own way (Chow and et. al, 2011). It is very successful in earning its own consumer
and their locality.
The company is facing strong competitors in the market such as TUI travels which is
holding Thomas Cook place in the market by providing successful holiday offers. Change in the
financial situation and marketing environment leading the company into second position. To
overcome such marketing, Financial and political and environment issues, SWOT analysis is
require to be done. SWOT analysis is an overview of an business's strength and weakness as well
as new opportunities and threats in the environment. It's a Structured Planning to Evaluate these
four factors of the company and offers the innovative plans which can help the organisation in
the betterment of the market strategy of the organisation. So after going through a SWOT
analysis, the overcome of the analysis is mention in four factors that are listed below:
 Strengths- Thomas Cook company is the largest travel company in the whole Europe
who serve every class of people by providing convenient and affordable holidays to the
consumers But also contain a hard regulations and policies system. The company must
focus on Promotion mix tools and service provider at workplace and also on the serves
they are providing and sales. Thomas Cook company connected with East like India and
Egypt with Europe and UK (Commander and Svejnar, 2011). They offers various offers
to the clients like resorts, Flights, Holidays and Hotels provided by the the company for
the ease of the consumers. Thomas Cook has astonishing position in the market and it is
their reputation in the industry of why people choose to travel in the Thomas Cook flights
instead of others. The company became more famous after the involvement in Olympic
game. It has Approx. 20,000 employees serving customers. Also Thomas Cook actively
initiate in the several events, occasion and campaigns and very concern with branding,
advertising in TV,print,and online ad and by other modes.
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 Weakness-Each organisation and system has loop holes in their structures which become
hurdle in the growth of their body. But with the perfect maintenance they might be
transformed into strengths of their work. The company has a lot of potential to serve the
people but due to less profit in the economical situation, the benefits are decreasing
everyday on the financial scale (Cuervo‐Cazurra, 2011). The other weakness of the
company is recognition of Thomas cook. The confusion leading into chaos and the credit
is not going to a particular brand. Also Very high Fixed cost and no concession is leading
fall of consumers. The limited brand presence due to intense competition. Also their work
is facing coordination problem among their offices. A very intense study needed to done
and new market strategy to overcome such weakness.
 Threats- The very genuine threat is decreased demand for package holidays. Statics facts
that the market is improving but in sluggish pace. Thomas Cook should draw again his
clients by offering affordable cost on plans by creating custom holiday and Price
addition. Various competitors from other travel companies promoting their brand on large
scale which is sharp threat to Thomas Cook. The company also has to promote itself
thorough social media and providing online market facilities and use integrated
promotion mix tools to gain potential consumers.
 Opportunities- Thomas cook company has the biggest opportunities to become the
biggest travel company in the whole Europe. It has great chances to increase their share
prices by expanding their business in the other countries and continents and explore and
advertise itself into new market (Granger and Schroeder, 2013). By utilizing its brand
name, the company can expand their business into different operators and fill the space
left by these operators. The company can also serve the people to plans to go the place
where people afraid to plans their vacations. Also those unpopular location can be the
area of new travel location by providing new affordable packages and open the new path
of tourism and also get funds from those places and their Govt. by branding their tourism.
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P 6 Relationship between strength and weakness from macro factors
The strength and weakness of Thomas cook is closely to its macro factors that are
political, legal, social, economical, technological and environmental elements. The performance
of business totally depends on its strength and weakness. The relationship between macro and
micro factor are listed below:
 Strength: It is the strength of the enterprise that assists in expanding the business
globally. Some of the powerfulness of firm are its popular brand image, trustful relation
among their clients, global business, etc. The impacts of macro factor on them are
described below:
▪ Political factor: The stableness in the political situations aids corporate in
earning more profit. As when government stables for certain year then company
understand their policy and starts their work according to them so that they do not
face any issue in future. On the other hand, certain other tasks like imposition of
tax done by government impacts negatively on the working of enterprise as large
sum of money goes on paying such taxes only. Therefore, it lowers the annual
turn over or income of company (Klapper and Delgado, 2011). Additionally,
specific norms or legalisation made by government such as prohibition of child
labour, laws related to wages, employment laws, equality law, etc. also influences
the working style of organisation. Government wants that no children get engaged
in corporation-al work because at this time they should complete their study.
Wages should be given at proper time by enterprise to their workers so that they
do not get depressed. Also they should given healthy environment so that they can
work effectively.
▪ Technological factors: This aids in making company more strong towards their
performance as modern techniques are used to accomplish activities like
communication, calculation, etc. Organisation can use internet based system like
social media (Face book, twitter, email, etc.) in doing effective communication
among their clients and workers (Onetti and et. al., 2012). They can maintain a
transparent layer by spreading all information related to work throughout the firm.
This increases the working efficiency as all members knows everything about
their work or any change that is done in firm. They also use Spreadsheet, Ms-
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excel for making correct calculation work in minimum period of time. This
reduces the errors that were occurring in physical calculation work.
▪ Social factors: Society led a positive impact on the performance of the Thomas
cook. As in the time of festivals, they book tickets in large number because they
have to go to meet their relatives (Harrison, 2011). This as a result increases the
income of organisation in specific months or weeks.
 Weaknesses: If firms got failed in attaining their goals and objectives , then it is clear
that there are some weakness of organisation. This occurred due to the influence of macro
factors that are listed below:
▪ Environmental factors: This is the major factor that negatively affects the
working of venture. Sudden change in nature causes serious issues like accidents,
plane crashes, etc. This causes death of many people. But if smaller impact is
recognised, then occurrence of foggy weather, pilots or driver cannot see properly
and due to this planes or train arrival and departure time increases. Because of this
people loose their trust from company as they have a fear that they will also get
effected by this and do not select this organisation for travelling purpose.
▪ Legal factors: This also impacts negatively on the firm. Several laws are getting
imposed by government like child labour prohibition, employment related law,
etc. If company will not follow these laws then they get punished. Punishment
may be in the form of compensation (Hamilton and Webster, 2015.). They made
laws such as smoking and drinking alcohol is strictly restricted while travelling in
public places, amount of commodities or weight of goods carrying by the
passengers are also decided by them. Therefore additional weight will cost extra
penny.
CONCLUSION
From the above based report it has been concluded that business environment plays a
vital role in growing any business or corporate. Certain external factors like political, legal,
economical, social, technological and legal. This impacts negatively as well as positively. The
scope and scope of different sectors like public, private and voluntary are explained here. Public
organisation are owned by government and do not have the motive to earn profit while private
firms are owned by individual and their aims and objectives is to expand their business globally
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and earn more profits. The relationship between different organisational functions and their
organisational structure and objectives are also described. The several functions of organisation
are research and development, accounting and finance, human resource management, etc. The
stakeholder analysis is also performed by using Mendelow's matrix.
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