Case Study: Analyzing TUI Group's Business Environment (2019-2022)

This case study report analyzes the business environment of TUI Group from 2019 to 2022, focusing on the impacts of the COVID-19 pandemic and the UK government's recovery plan. The report examines TUI's internal environment, including strengths, weaknesses, opportunities, and threats (SWOT). It also investigates the micro and macro environments, considering factors such as customer behavior, government policies, and economic conditions. The analysis utilizes the STEEPLE framework (Social, Technological, Economic, Environmental, Political, Legal, and Ethical) to assess various influences on TUI's operations. The report highlights the challenges faced by TUI during the pandemic, such as flight suspensions and travel restrictions, and evaluates the effectiveness of the UK government's support for the tourism sector. Overall, the case study provides insights into TUI Group's strategies for navigating the turbulent business environment and its prospects for future growth.

Business Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Section 1...........................................................................................................................................3
Summary.....................................................................................................................................3
Section 2...........................................................................................................................................4
The impacts of the Covid-19 Pandemic on TUI Group’s internal environment.........................4
The impacts of the UK government's recovery plan on TUI Group's internal Environment......5
Section 3...........................................................................................................................................6
The impact of the UK government's recovery plan on TUI Group's micro-environment..........6
The impact of the COVID-19 Pandemic on TUI Group's micro-environment...........................6
Section 4...........................................................................................................................................7
The impact of STEEPLE factors on TUI Group's Operations....................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment refers to the internal and external factors inherited by an
organisation. It indicates the external and internal factors which affect the organization directly
or indirectly (Gaganis, Pasiouras and Voulgari, 2019). Internal environment are those
environment which exists within the company such as corporate culture, human resource,
staffing, finance etc. While the external environment are refers to those factors which affect the
functioning of the business environment. It is classified into two parts micro and macro
environment. Micro factors has direct impact to the organization such as Customers, suppliers
and investors etc. (Castañeda-Ayarza and Godoi, 2021). TUI is a travel and tourism company
established in Hannover and Berlin. The project report aims to throw some light on the
understanding of business environment. Further, the impacts of Covid-19 on the internal and
external environments are also being discussed. In addition to it, how the UK government
tackled the whole situation post Covid-19.
TASK
Section 1
Summary
TUI Group leads the tourism industry in the whole world. The company provide services
such as cruise lines, airlines. Tourism and unique hotel portfolio. The company is a good
opportunity for the customers, employees and shareholders. TUI Group operating more than 400
hotels and providing standard quality of services in the best environment. It operates in
approximately 180 regions. TUI has 16 cruise lines and five airlines with around 150 aircraft.
The organisation covers the whole tourism sector and serves millions customers. Tourism sector
helped the country to grow in terms of GDP and also benefits the organisation, TUI.
The goal of TUI is to satisfy the customers by meeting their needs. The objective of TUI
group is to make positive impacts of tourism on places and people in worldwide. TUI Group is a
German travel and tourism company. Basically, tourism sector is dived into three sub-sectors
which includes accommodation, travel and hospitality related services. The company provided
good opportunity to their customers , employees and shareholders. They can seize the
opportunity and take advantage from the TUI Group.
Organizational Structure

The organizational structure help the company to perform the activities in order to
achieve goals that the organisation pursue. Further, it helps in improving the efficiency and
effectiveness of the company to perform better. Organizational structures can be classified into
four types such as functional divisional, functional, flatarchy and matrix organizational
structure (Winnubst, 2017). The organizational structure also help in the determination of flow of
information within the company. The TUI Group follows the functional structure, which is
quite similar to a hierarchical organizational structure. This structure starts at the top position
with highest level of responsibility and goes down from there. It is also known as bureaucratic
structure (Benzer, et.al., 2017). In this business structure employees are organized in different
segments based on their skills and area in the company. This structure allows employees to focus
on their role and encourage their departments and encourages the team members to achieve the
goal.
The Annual Revenue of TUI Group was $ 18,928 in 2019 which was decreased in 2020
that is $7943 because of Covid-19 pandemic. The annual report of 2020 of the TUI Group was
prepared for the period from 1 October 2019 to September 2020. TUI Group's direct or indirect
competitors includes Norwegian Cruise Line, Invited Home, etc.
Section 2
The impacts of the Covid-19 Pandemic on TUI Group’s internal environment.
Internal environment refers to the elements present within the company. SWOT Analysis
is beneficial in order to show the effects of the COVID 19 pandemic on the internal environment
of TUI Group and is discussed below:
 Strengths-The TUI supplies the public with high quality brand products and services in
the hospitality sector to its passengers. Supply of such products and services in airlines
and cruises industries help to achieve high level of customer satisfaction. The tourism
industry was highly affected because of the pandemic, COVID-19. During the pandemic,
the government of UK reduced tax rates. TUI looked down as an opportunity to gain
competitive advantage over its competitors. TUI also invested funds to build a strong
position in the marketplace (Aguilera, Kim and Lee, 2018).
 Weaknesses- Covid-19 pandemic affected the tourism sector to a great extent. This
makes negative impact on the business of TUI Group because government introduced a

proper lockdown and also released guidelines such as flight suspension, travel
restrictions, wear mask and maintain social distance etc. Customers lose their confidence
on travelling as well as the company has unable to face the challenges which occurs by
the new entrants in the industry.
 Opportunities- After the pandemic TUI Group opening up new markets due to the
government agreement. They adopt the new technology to acquire the attention of the
customers towards the hospitality sector. By decreasing cost on TUI Group's product may
be a great opportunity to maximizing the profit and success of the company. They apply
protocols such as health and safety for travellers and improve the operations of business
to enhance investment.
 Threats-Because of pandemic, the customers were not satisfied with the services and
products of TUI. It was not possible for the organisation to supply its customers with new
and innovative products. The company had no advanced savings, so they had pay amount
to their employees. In that situation employees losing their jobs and they do not feel safe
in the environment of the organization. The management of the organisation start getting
weak due to COVID-19 as they lose their lot of customers and gain no profit.
The impacts of the UK government's recovery plan on TUI Group's internal Environment.
The government of UK helped a lot to make the tourism sector stable again. TUI suffered
high loss due to Covid but soon got recovered with the support of the government and the
citizens. The government wants recovery to be swift in every region & nation and in both rural
as well as urban areas ( Sedelnikov, 2018). The government set a recovery plan and released the
guidelines & introduced protocols to prevent the public from the infection. This includes COVID
entry rules for passengers ,wear mask,and maintain social distance etc. TUI complies with every
guideline, rules and regulations to provide its customers with best safety and health related
facilities (Khalid, Okafor and Burzynska, 2021). Every branch of TUI follows and take
necessary precautions in order to prevent the spread of coronavirus. Also, the government is
committed to supporting the sector to emerge from the pandemic to become more
innovative ,inclusive, sustainable and ,more resilient. The tourism sector got a big shock due to
the coronavirus pandemic as the airlines got closed during the lockdown, resulting in a huge loss
to TUI.

Section 3
The impacts of the UK government's recovery plan on TUI Group's micro environment
The government of UK, have provided relaxation to the tourism industry as they are
affected a lot with pandemic. The government have declared that they will charge less tax rates
as before pandemic it comes under high tax slab. With this the government have reduces the rate
of interest. This results in more people will take loans and the flow of currency in the county will
be high. This will affect the purchasing power of the customers. For of the people will be able to
consume facilities. The TUI Group's is a involved in providing rooms at low rate, this will give
the competitive advantage to the company. So, reduction in the tax rate will attract more number
of customers and will help TUI group's in reaching back to the normal pace.
The impacts of the COVID-19 Pandemic on TUI Group's micro-environment.
The organization seem highest level of fall in travellers and employment rate as
numerous people lose their jobs during this pandemic. Along with other tourism industries, TUI
Group's faced lot of challenges and problems which includes reduction in the local and well as
international visitors, losing the large customer base, even the booked tickets were cancelled as
the passengers were not allowed to travel (Škare, Sorian and Porada-Rochoń,2021). It is essential
to examine micro environment of the administration before determining the strategies of
business. The TUI Group's follows sustainable strategy to prevent from the pandemic. They also
expand their innovation of technology by which they could deliver messages to the customers
that they mostly exist on online platforms and trying to solve the queries of people. By seeing
this worst condition company even offered discount of advance payments, but this strategy do
not go well. The Covid pandemic had affected the tourism industry in very harsh manner, which
will take a lot of time in it's recovery (Halmaghi, Iancu and Băcilă, 2017).
Section 4
The consequence of STEEPLE factors on TUI Group's
To analyse TUI Group’s macro and well as micro environment and their factors, the
STEEPLE analysis is performed -
 Social Factors- Distribution of age group, leisure interests, style of living and attitude of
the population play an important role in the market place of TUI. They will understand

the customers behaviours and culture of different countries where they operate (Alanzi,
2018). TUI group is having a large customer base available in local as well as globally
market. They look after the requirements of the customers, which helps them in attaining
customer advantage.
 Technological Factors- Technology industry is really a good factor on TUI Group's
operations. From the last five years technology has been transforming very fast such as
taxi industry is now dominated by players like Lyft and Uber. Technological
developments in TUI Group is on high level nowadays. They shift digitally towards
digital tools such as online payments and advance online bookings in travelling well as in
hotels.
 Economical Factors- TUI Group economic factors have been affected due to COVID -
19 pandemic because of this loss company couldn't able to provide amount to employees
and they losing their jobs (Zahari and Romli, 2019). The United Kingdom has the sixth
largest economy in the world, along with this they had a positive GDP. By pandemic the
entire economy of UK fall down and it also effects the business industries.
 Environmental Factors-The TUI Group's can evaluate the environmental factors before
entering new markets or in existing market. The environmental factors includes Weather,
climate change, recycling and air& water pollution regulations in Travel & Leisure
industry etc.(de Andres, et.al., 2017). The TUI Group's have taken major steps towards
the protection of the environment and to make the surrounding clear and green. They are
planning to set an example of sustainable business in their sector.
 Political Factors- These factors plays an important role in determining the political
environment that can impact the profitability of TUI Group's in a particular country or
market. The new policy imposed by the government to reduce the tax rate will helps in
increasing the revenue of the company.
 Legal Factors- TUI Group has made law and policies for employees such as consumer
protection law, law related to health and safety, anti-trust law in travelling and tourism
industry etc. The Group faced lots of difficulties due to pandemic and they had fired it's
workforce from the organisation in order to reduce their expense.
 Ethical Factors-Ethical factor can be outlined by moral principles of an individual which
shows their attitude and values (Sobhani, et.al., 2020). It analyse the activities of

organization that they are performing in such as way that the employees as well as the
management do not disobeying any code of conduct. The TUI groups had made their own
polices by keeping all the facts in mind.
CONCLUSION
From the above report, it can be concluded that the business environment tells about the
external and internal factor present in the environment. The internal factor are the factors which
affects the company internally can can be controlled by them but external factors are not in their
hand. The affect taken place due to Covid pandemic was not in control of the TUI group. Whole
tourism industry was affect by it. With the help of of some recovery planes of the government
they are trying to get back to the normal phase. The company should try to explore in other
countries too, which will help them in acquiring more customer base and will soon recover form
loss occurred due to pandemic.

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