Business Environment Analysis: TUI Group Case Study Report - 2022

This case study report provides a comprehensive analysis of the TUI Group's business environment between 2019 and 2022, focusing on the impacts of the COVID-19 pandemic and the UK government's tourism recovery plan. The report examines the internal and micro environments of TUI, explorin...Read More

Travel and Tourism

Contents
INTRODUCTION...........................................................................................................................1
SECTION 1.....................................................................................................................................1
SECTION 2......................................................................................................................................2
Impact of Covid-19 on the company internal environment.........................................................2
Impact of recovery plan of the UK government's on the organisation internal environment......3
SECTION 3......................................................................................................................................3
Impact of Covid-19 on company micro environment..................................................................3
Impacts of recover plan of the UK government's on the company micro environment..............3
SECTION 4......................................................................................................................................4
Impacts if STEEPLE factors on companies functions.................................................................4
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
All the elements which affect the business either internally or externally is known as
business environment. There are two parts of business environment, one is micro environment
and another one is macro environment. Both of these two environment together known as
external environment. The elements present inside the company is affecting the company's
working condition is internal business environment and macro environment is also termed as
external environment due to all of the elements present outside the company is affecting the
company's working. In the micro business environment includes the investors, workers working
with in the company, the competitors and the internal suppliers. All the factors are included
under both micro and internal business environment because, to control all these elements are in
the hand of company. An elements which affect the businesses environment of the company and
can not be controlled by the company, are included in macro and external business environment.
Macro or external business environment includes ethical, political, economical,environmental
and legal factors. The objective for making this essay is to gain the better knowledge on the
business environment of travel and tourism and the elements which affect these environment.
This report includes, the TUI Group's business environment in the UK and globally, impact of
STEEPLE factors on company like as fluctuation, dynamics and uncertainties of the environment
because of recent Covid-19 pandemic and lastly, the UK government tourism recovery plan at
the micro and macro level.
SECTION 1
TUI Group, it is a UK based public limited which deals in tourism industry and
hospitality. This company was established in 1923 which headquarter is in Hannover and Berlin,
Germany. This company owns different types of cruise lines, hotels, travel agencies, airlines and
merchandise shops of Europe either fully or partially (Gogokhia, and Berulava, 2021). The CEO
of the TUI groups is Friedrich Joussen, CFO is Sebastian Ebel, Chairman of the board of
supervisory is Dieter Zetsche. Sybille Reiss is HR, Frank Rosenberger handles the IT teams of
TUI groups and Kruger is the member of exucative board strategy. According to 2021 the profits
of this groups is 4.732 billion euros with this, operating profit and net profit was -2.025 billion
and -2.48 billion euros. The organisation has personnel of 50,584 workers. Some of the famous
competitor of TUI Group's are companies like last minute, travel supermarket, Thomas cook,
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holidays SunExpress, SunWing , Flayglobespan, Condor and Transat. The main concentration of
the organisation is to evolve faster. The organisation was known as preussage AG upto 1997 and
the company was involve in activities of mining till that time. The organisation is registered on
two stock exchange together that is on the Frankfruit stock Exchange and on the London stock
Exchange. This groups was listed on 9 October 1923 as in mining business and collaborate with
a coal company, Ruhr in 1972 (Ivanovich, 2020). The product, which is offered by the TUI
Group's includes cruise lines, hotels and resorts, scheduled and charter passengers airline and the
package holidays. Flatter hierarchy is an organisational structure which is followed by the
company. According to this hierarchy system, the top management has directly connect with the
lower level management which means there is no any level of management between top and
lower management in the company. Therefore, there is less time required to communicate among
different level of management within the firm. They are able to communicate directly and take
decision easily without any delayed and long discussion. The functions performed inside the firm
is split into three main regions which are the central region, the western region and the north
region. With the holding of 37.5%, the major shareholding of the organisation is mainly in the
hand of private investors. With capturing 29.9% of the market share, the second largest holding
is in the hand of an Unifirm limited. The institutional investors of the company are holding
26.1% capital of the total share where as lastly, 4.1% and 2.4 % share is holded by the several
groups of LLC and Riu Hotels S.A respectively (Kir, and Erdogan, 2021).
SECTION 2
Impact of Covid-19 on the company internal environment
During the Covid-19 pandemic, after the announcement of lockdown by the government
all of the inter industry were affected badly however, the tourism industry was affected more
badly than any other because no one had permission to go outside their homes. Number of
restaurants and hotels were even permanently closed, because they do not have any funds and
outcomes in occurring a large amount of loss. As the company does not have amount to pay their
employees, in that situation a number of employees were losing their works. Therefore after that
the administration of the company start getting weak. The TUI groups continuous booking a lot
of loss because of the regular declination in the working of this company. The environment for
working of the firm becomes too bad (Kokodey, Gnezdova, and Lomachenko, 2018). As the
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employee of the company are always in fear that they will loose their work therefore they do no
feel safe regarding to their job situation. All of these situation are mismanage the overall
capabilities of the TUI groups. After the Covid-19 crisis get finished, the groups spends more
money on hiring the new applicant and gives them whole training. For this required lots of time,
resources and efforts of the organization. The company were already facing lots of loss and it
was tending to increase more because of these unnecessary expenses (Lam, and Wong, 2018).
Impact of recovery plan of the UK government's on the organisation internal environment
There are no of efforts made by the UK government to bring back the tourism sector to
its normal working situation. The government of UK decreases the tax rates of the tourism
industry and the hotels so that the sector of tourism can produced more profits and income to
recover their losses. By the help of this strategy of UK government, the TUI groups starts
producing a good total of the income and start redeeming their losses. Also by following few
rules and protocols the working can be continued even at the time of partially lockdown. The
workers started earning by getting their works back. The environment of the working place also
become peaceful. Company started to pay their employees timely because it start to gaining
some profits (Liao, and Yang, 2020).
SECTION 3
Impact of Covid-19 on company micro environment
Because of the Covid crisis, TUI groups looses its number of customers. The tourist
stopped travelling to UK, which results in loosing its all the revenue. The results had no any
changes even the organisation starts providing 20% discount and 20% extra discount on advance
payment. The total revenue of the company keeps going down. The firm were continuous to
register losses, then started to fire its employees to recover from loss, but there were no any
changes registered. Even they did not register any profit after the pandemic get over because of
they had to expanses more money on hiring the new employee and on their training to work. All
this made a huge loss to the organization in terms of loosing revenue, profits, workers and
customers (Luiz, Ganson, and Wennmann, 2019).
Impacts of recover plan of the UK government's on the company micro environment
According to the UK government's strategises tourism industries recovered their looses
occurred during the pandemic by reducing the rate of taxes. The UK government decreases the
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tax rate and the tourism sector starts providing the huge discounts to the tourist by which the firm
getting the attention of the service user. Through this, the organization able to recover its loos in
short time period. The tourist also started taking upper hand of the 20% discount strategy
provided by the government. The service user stared to use the service of the firm and again start
generating revenue (Michael, Reisinger, and Hayes, 2019).
SECTION 4
Impacts if STEEPLE factors on companies functions
STEEPLE analysis is used by the organisation to know the factors present in the external
environment and the internal capabilities.
 Social factor – Culture, preferences of customers and taste are considered are the known
consider in the social factor. The organisation follows the regional and culture of the all
countries as they managing globally therefore, to register the customer's attention it is
compulsory for them and TUI Group's take care of all the customer's preferences.
 Technological factor – All the innovation and technological changes affecting the
working and demand of the company are taking out under the technological factors. The
main reason for registering the customer's attention is early acceptation of the technology
by TUI Group's. The Groups used the quickest technology to gave it's customer better
experience, which assist the company to acquiring the competitive upper hand.
 Economical factor – The factors, which affects the working of company and it is not in
the control of organization and also it relays on the economic function of the
organisation, are known as economical factors. Due to the Covid-19 pandemic the TUI
Groups looses its customers by 23%, this was not in the hand of the organisation. The
customers of the organization decline continuously even organization launching different
attractive schemes (Yaklai, Suwunnamek, and Srinuan, 2018).
 Environmental factor – environmental factors consist of those elements which are not in
the hand of organisation control like as some natural calamity. As the TUI Groups have
lots of flights and the probability of the worst weather can occur at anytime therefore, for
minimizing this the company has a more number of backups. The service in the
emergency situation and the tools required in this situation are available with the
organisation.
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 Political factor – It is the factors, which are control by the government and has full of
interference of the government. The UK government has decreases the tax rate on the
industry for recovering the from the losses occurred at the time of crisis, which helps the
TUI Groups to regaining the looses and making the revenue.
 Legal factor - when the government takes any legal action the it affects the company
externally but when the management of company makes any policies in the company
then it affects the organisation internally. TUI Groups has required to make a number of
policies for providing the benefits of workers, take care about their safety and health. But
at the time of pandemic the organisation keeps firing their workers from the organisation
to manage its looses. When the company firing employees than it starts loosing its image
in the global market. Even workers of the organisation feel fear that they will also be
faced termination soon. By this behaviours of the organisation working environment is
also affected (Pînzaru, Zbuchea, and Vitelar, 2018).
 Ethical factor- It refers to know whether the functions performs in the organisation are
morally right or not. The ethics are known as the code of conduct which is followed by
the organisation. As the organisation is works in numbers of country in all over the world
therefore, they have need to made a different code of conduct for different countries by
following the culture of the environment and the norms.
CONCLUSION
By the above essay it has been concluded that environment of business is vital to
recognise the external and internal environment of the organisation, which are affecting the
business indirectly or directly. The crisis has affected the organisation a lot, the decrease their
incomes as they loss their customers. The very vital suggestions for the organisations are that
they should explore and expand their business in all over the world. The recovery plan of the
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UK government tax reducing policy assist the organisation to recover its loss and regenerating
the profits after the pandemic. Lastly, the STEEPLE analysis assist in recognising the internal
and external factors. Some steps has been taken by the organisation like ethical, social,
environmental and technological had positives impacts and legal and economical have some
negative effects.
REFERENCES
Books and Journals:
Gogokhia, T. and Berulava, G., 2021. Business environment reforms, innovation and firm
productivity in transition economies. Eurasian Business Review, 11(2), pp.221-245.
Ivanovich, K.K., 2020. About some questions of classification of institutional conditions
determining the structure of doing business in Uzbekistan. South Asian Journal of
Marketing & Management Research, 10(5), pp.17-28.
Kir, H. and Erdogan, N., 2021. A knowledge-intensive adaptive business process management
framework. Information Systems, 95, p.101639.
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
Lam, J.S.L. and Wong, H.N., 2018. Analysing business models of liner shipping
companies. International Journal of Shipping and Transport Logistics, 10(2), pp.237-256.
Liao, S.H. and Yang, L.L., 2020. Mobile payment and online to offline retail business
models. Journal of Retailing and Consumer Services, 57, p.102230.
Luiz, J.M., Ganson, B. and Wennmann, A., 2019. Business environment reforms in fragile and
conflict-affected states: From a transactions towards a systems approach. Journal of
International Business Policy, 2(3), pp.217-236.
Michael, N., Reisinger, Y. and Hayes, J.P., 2019. The UAE's tourism competitiveness: A
business perspective. Tourism Management Perspectives, 30, pp.53-64.
Pînzaru, F., Zbuchea, A. and Vitelar, A., 2018, September. Knowledge transfer from business to
public administration in Smart City Development. In Proceedings of the 19th Conference
in Knowledge Management (Vol. 2, pp. 700-707).
Yaklai, P., Suwunnamek, O. and Srinuan, C., 2018. How Intellectual Capital, Knowledge
Management, and the Business Environment Affect Thailand's Food Industry
Innovation. Asia-Pacific Social Science Review, 18(2).
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