Analyzing TUI Group's Business Environment: COVID-19 & UK Recovery

This case study report analyzes TUI Group's business environment, focusing on the impacts of the COVID-19 pandemic and the UK government's recovery plan. It examines the internal and external factors affecting the company, including the micro and macro environments, and applies the STEEPLE analysis to assess the broader influences on TUI's operations. The report details how COVID-19 disrupted the tourism industry, leading to workforce reductions, financial losses, and operational challenges for TUI Group. It also explores the role of the UK government's recovery initiatives in supporting the company's recovery by reducing taxes and promoting tourism. The analysis further covers the social, technological, economic, environmental, political, legal, and ethical factors (STEEPLE) that shape TUI's strategic decisions and operational practices, highlighting the importance of adapting to cultural changes, technological advancements, economic fluctuations, environmental concerns, and regulatory frameworks. The study concludes by emphasizing the need for TUI Group to navigate these complex factors to ensure sustainable growth and maintain a competitive edge in the global tourism market. Desklib provides access to similar case studies and resources for students.

Business environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Section 1..........................................................................................................................................1
SECTION 2......................................................................................................................................2
Internal environment affected by impact of Covid-19 ....................................................................2
Impacts of the UK government’s recovery plan on the company internal environment ...............3
SECTION 3......................................................................................................................................3
Impact of Covid – 19 on company micro environment..........................................................3
Impacts of the UK government’s recovery plan on the company micro environment....................4
SECTION 4......................................................................................................................................4
Impacts of STEEPLE factors on companies operation....................................................................4
CONCLUSION................................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
Business environment includes the aggregate total of all employee , external firm and
industries factors which directly or indirectly affect the business organization. The business
environment has two parts that is internal environment and external environment that is also
known as micro and macro environment. The factors with in the organization under which the
firm operates. It is the factors which can affect the organization activities known as internal
business environment or macro business environment which includes the internal producer and
working of employee with in the organisation. Macro environment is refers to as external
environment because it has external factors which includes political, social, demographic,
technological and economic factors. The organization controlled the internal and external
business environment factors which affects the business as well as their production. Some factors
are not controlled by the organization that includes external factors such as legal, ethical and
political factors. Additionally, this project describe the understanding of business environment
and their factors, groups of TUI and impact of covid-19 pandemic. Lastly, the role of UK
government's recovery plan at micro and macro business environment factors (George, 2021).
Section 1
TUI is one of the public largest company of hospitality, travel and tourism group. The
origin of this company lie in the industrial and transportation company. TUI was established in
1923 having headquarter in Hannover and Berlin, Germany. The origin of this company
prevarication in the transportation company. Friedrich Joussen is the CEO of the company and,
Dieter Zetsche is the Chairman of board of supervisory CFO is Sebastian Ebel, Peter Krueger is
the member of executive board strategy, Frank Rosenberger manages the IT team. It was
acquired by Preussage AG (Giagheddu and Papetti, 2020). The aim of TUI groups focus of the
company is to grow faster. TUI group has own travel agencies, merchandise shops, hotels and f
airlines of Europe. TUI company was certified on 9 October 1923 as in mining industry and
integrate with Ruhr coal company in 1972. There are many products which are offered by the
TUI groups includes five European airlines and the group airlines operate both Charter and
scheduled passenger airlines more than 150 destination worldwide, cruise lines which includes
Merella cruises in UK, Tui river cruises, Resorts & TUI's hotels brand that include Blue
premium which focus on local culture, Magic Life that includes all compressive resorts offering
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24X7 facilities and Sensatori luxury (five-star) hotels and package holiday. In 2021, the overall
turnover of the company is 4.732 billion euros with this operating income and net income was -
2.025 billion and -2.481 billion euros. The company is having a workforce labour around of
50,584 employees. In December 2014, combined business began trading on exchange of two
stocks the Frankfurt stock exchange and London stock exchanges. Top organizations have direct
link between lower management team which can help in communicating without any
interference. There is no middle communicator management which means no delay of
communication and informations among different level of management. TUI established its
sustainability methods in 2015, that is also know as better holidays, build around the world. TUI
has objective to make positive impact on the operations and influencing the customers across the
worldwide tourism industry. The organisation operations has divided into three regions which
includes north region, central region and western region. TUI group in 2014 operated
approximately 1600 travels agencies, 380 hotels and resorts, 150 aircraft and 16 cruise liners. In
may 2022, it was reported that Russian oligarch Alexei Mordashov had holding of 29.9% of the
company, but the transfer was offense of sanctions towards the Russia by European union (kuby
and Rowsell, 2022).
SECTION 2
Internal environment affected by impact of Covid-19
During covid-19, all industries and companies are affected due to spreading of corona
viruses over the world but the tourism industries faces lot of difficulties because people restricted
not to go outside their houses. Government implemented the guidance to save the lives and
announced the lock down. Most of the hotels, restaurants and tourism industry was remain
closed permanently for some time because of this pandemic situations, companies don't have
enough fund and got a huge amount of loss. The working of TUI groups was comes at closing
stage and less bookings ,in this situation, many employee lost their jobs they have not enough
money to survive their life in pandemic situation and company have no money to pay them. In
pandemic crisis, the organization structures and cultures becomes bad. Companies are struggling
to recover fixed costs. Companies and industries have decline due to travel restrictions, social
distancing, restrictions on selling products and employee was scared to loss their jobs (Linara-
Demakakou and et. al., 2020) ). The Covid-19 pandemic affected the airlines revenue to drop out
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by 60% in 2021.Pandemic had already caused massive dislocation among the business.
According to the report 40% business get falls down and get permanent closed. Pandemic crises
have also impacts on varied across industries, with retail, arts and entertainment, personal
services, food services, and hospitality businesses. Organization experiences most difficulties
such as employee healthcare, shortage of supply chain and lack of workforces and employee
team due to coronavirus pandemic crisis and it also disturbs an organization outcomes. After the
pandemic get over the company invest a lot of money on hiring the new employes and provide
them full training. Company have already lot of loss and after getting over normal situation gain
organization spend lot of money , resources and efforts to grow continue and hire the employee
and pay them according to their needs. Covid-19 pandemic destroys the small business and
families of person was lead to death. The organization of tourisms and hospitality get closed and
facing lot of loss revenues and after covid-19 companies again invest to grow up the organization
and production. Companies again gives the opportunities to the individual to participant in their
business environment to grow up this was take lot of money to restart the business (Luthra and
et. al., 2018).
Role of the UK government’s recovery plan on the company internal environment
The UK government has aim to recover the condition of TUI group companies and
provides more support to bring back the tourism industry to its normal working condition and
help them to operate again and government reduces the taxes on hotels and tourism. Boost the
demand by promoting the hospitality and tourism so that companies can make more profit.
Government recovery plan helps TUI groups to recover their organization loss and start
generating the better turnover of the company. Organization impose some protocols the
businesses can be producing the services even during the lock down time. The employees start
getting their jobs back, more opportunities and started earning.
SECTION 3
Covid – 19 impact on company micro environment
During coronavirus pandemic TUI group's lost the workforces. The tourist stop the
booking and travelling to UK, because of the covid resections guidance which results in loosing
all the funds the company have with them. The company start offers more discount on advance
payment, but then also the result remains same and company facing lot of loss. The over
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profitability of the company keeps on declining. The TUI groups continuous faces reduction in
their bookings then even fired their workforce to recover from loss. All these experiences made
a lot of loss to the company, losing the talented employee and loosing potential growth and
profit. People experiences unemployment. This results the most of people have major affected
and they are facing lots of issues such as financial, reduction in sales and profits and disruption
of supply chain which effects the overall UK economy (Quevedo and et. al., 2021).
Role of the UK government’s recovery plan on the company micro environment
Government's of UK recovery plan helps in analysing looses of the industry. The
coronavirus pandemic has major impacted on the tourism industry and as the TUI groups
financial results have shown decreases cash as a short term effect whereas the long term effect
has been reduction in the number of travellers that used to travel through the travel agency on a
daily basis or a monthly basis. The usual summer period where the booking profits rose up to
59% were all cancelled and the cost of bookings and expenses were paid by the companies.
Government reduces the taxes and helps e,employees to recover their loss (Ruiz and et. al.,
2020).
SECTION 4
Impacts of STEEPLE factors on companies operation
The steeple analysis is strategical tool which helps in to analysis the internal capabilities
of business. The organization use STEEPLE tool to analysing the internal and external factors
present in their company. STEEPLE is more progression model as it deals with macro
environment external factor. It offers various factors such as:-
Social factor- In social step of STEEPLE analysis the cultural changes in business
environment. This step include the culture, taste and preferences of the customers. The company
belived on the the culture and religion of all countries because they are providing the services all
over the world and acquire that attention of the customers. TUI groups take care of all the
preferences of the customers. It also helps to generate the new ideas for the organization and
customers.
Technological factor:- Technological changes and innovation have major affect on the
the demand and working of the organisation. Technologies has progression over the world and
the importances of these changes depend on the business market. New opportunities are generate
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from the new technologies and innovations, changes in method of production which helps
organization to grow up fast, improves company profit margin's. TUI groups used variety of
different technologies and provided a great experience and skills to it's customers, which helps
them in acquiring advantage in competitors product and services. By monitoring the technology
industry can create new markets and new opportunities (Saroj and Pal 2020).
Economical factor:- The economical factors which affects the production an d operation
of the organisation and company is more dependent on the economic and financial performance
of the company all these are considered as the economical factors .The TUI groups looses
many talented customers because of the pandemic crisis. Launching different attractive schemes
the customer base declines continuously. The economic and financial condition will change a lot
in success of an oranization. STEEPLE analysis levels of unemployment, economic growth, and
international trade business across the world.
Environmental factors:- The environmental factors includes natural climatey changes.
All business impact on their environment, these impact either be positive or negative. The TUI
groups takes more advantages of flights and due to changes in weather condition, the company
has a lot of back ups. The different methods and emergency services used at this time with the
company. Positive benefits occurs when organization environment get more profit (Yeh, 2021).
Political factor:- Changes in government policy occurs the political factors and these
changes includes economic, social and legal. Government may decreases or increases the taxes
on organization which is the political factors. After the pandemic organization start recovering
the losses, the UK government has reduced the tax rates on the industry, this helps the TUI
groups to start recovering from the looses and in generating profit. Government interventions
changes in interest rate policy and it can also implement on companies demand pattern.
Legal factor:- The organisations are affected externally, when the government take any
action.The TUI group has generated some policies regarding the organization for the employee
safety , benefits, for their health. To operate legally, in the environment must follows the laws
and policies.
Ethical factors:- Ethical factors analysis the social values and shape of behaviour of the
business organization and also it helps to determine the operation formed with organization is
morally correct or not.
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CONCLUSION
From the above discussion, it is concluded that, business environment helps to identify
the external and internal factors which affects the organization. During the impact of covid-19
pandemic, has heavily impacted the tourism industry and as the companies' financial condition
becomes at decline stage After the pandemic get over, organization invest extra expenses on
hiring the workforce and on their training. The organization use STEEPLE tool to analysing the
internal and external factors present in their company. STEEPLE is more progression as it
identified with macro environment external factor such as social, technological,economic,
environment , political, legal and ethical factors.
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REFERENCES
Books and Journals
George, R., 2021. The Tourism and Hospitality Marketing Environment. In Marketing Tourism
and Hospitality (pp. 183-219). Palgrave Macmillan, Cham.
Giagheddu, M. and Papetti, A., 2020. The macroeconomics of age-varying epidemics. Available
at SSRN 3651251.
Kuby, C.R. and Rowsell, J., 2022. Magic (al) ing in a time of COVID-19: becoming literacies
and new inquiry practices. International Studies in Sociology of Education, 31(1-2),
pp.231-260.
Linara-Demakakou, E., Bodri, D., Wang, J., Arian-Schad, M., Macklon, N. and Ahuja, K., 2020.
Cumulative live birth rates following insemination with donor spermatozoa in single
women, same-sex couples and heterosexual patients. Reproductive biomedicine
online, 41(6), pp.1007-1014.
Luthra, S., Mangla, S.K., Shankar, R., Prakash Garg, C. and Jakhar, S., 2018. Modelling critical
success factors for sustainability initiatives in supply chains in Indian context using Grey-
DEMATEL. Production Planning & Control, 29(9), pp.705-728.
Quevedo, J.M.D., Uchiyama, Y. and Kohsaka, R., 2021. A blue carbon ecosystems qualitative
assessment applying the DPSIR framework: Local perspective of global benefits and
contributions. Marine Policy, 128, p.104462.
Ruiz, L.A.L., Ramón, X.R. and Domingo, S.G., 2020. The circular economy in the construction
and demolition waste sector–A review and an integrative model approach. Journal of
Cleaner Production, 248, p.119238.
Saroj, A. and Pal, S., 2020. Use of social media in crisis management: A survey. International
Journal of Disaster Risk Reduction, 48, p.101584.
Yeh, S.S., 2021. Tourism recovery strategy against COVID-19 pandemic. Tourism Recreation
Research, 46(2), pp.188-194.
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