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Table of Content

• Introduction
• Overview of Company
• Strategic Analysis of Thomas Cook
• PESTEL
• SWOT Analysis
• RBV Analysis
• Conclusion
• Reference List

Introduction

Business strategy refers to the set of action plans that are aimed at achieving the long-term business goals of a company. The importance of strategic decisions has increased in modern business world due to increased complexity and market competition. However, development of strategy is mainly based on the conditions of the business environment which needs proper examination. The current report is aimed at examining the business environment of a tourism company named Thomas Cook in the UK.

Overview of Company

Thomas Cook is one of the leading tourism companies in the UK which offers tourism services. It is a British international travel & tourism company and even listed on the London Stock Exchange (LSE). Thomas Cook started its journey in 2007 and currently owns multiple tour operators and even airlines (Michailidou et al. 2016). The main USP of the company is that it offers one stop solution for all travelling matters.

Strategic Analysis of Thomas Cook

This section of the report is focused on conducting strategic analysis on Thomas Cook:

PESTEL

A PESTEL analysis has been done on Thomas Cook as below:

Political:

The corporate tax rate in the UK has been lowered by the government which has positive impact on the net profit of Thomas Cook. At present, the main corporate tax rate is 19% which is expected to further reduce to 18% in the coming year (McLean, 2018). Reduction in corporation tax rate is a great relief for Thomas Cook as its main business operation is based in the UK.

Economic:

The UK economy has revived successfully after the global recession. Inflation rate determines the capacity of consumers’ spending to a great extent. The inflation rate in the UK is under control and has dropped to 2.5% at present. In addition, the GDP growth rate in the UK stands at 1.8% annually.

Social:

Social habit of the consumers is a key consideration for tourism companies like Thomas Cook when it comes to developing strategies. The customers in the UK more prefer short trips compared to longer ones due to busy lifestyle. This requires Thomas Cook to develop its tourism package accordingly. People coming from other nations prefer to visit local sight scenes including historical heritages, natural places, and similar others.

Technological:

In the view of Dale et al. (2016), customers in the UK are fast adapting to online technologies and thus prefer to book tourism packages mostly online. This is mainly because of the fact that online booking helps in avoiding risk of carrying cash and also allows customers to compare tour packages offered by different companies. This requires Thomas Cook to develop online secured payment system in its website to attract more number of customers.

Environmental:

The concern over global warming has been rising across all nations. This has made the UK government and other social activists to take several measures towards tackling the problem of global warming. At present, the customers also look for eco-friendly hotels and tourism destinations as the masses are also aware about the threat of global warming. This has a major impact on the strategic decision-making of Thomas Cook as it is now required to identify and develop packages that take customers through an eco-friendly experience.

Legal:

The UK has a good organized regulatory framework which is good for companies like Thomas Cook. The major laws that Thomas Cook is required to adhere to are Taxation laws, labor laws, equality act, minimum wages act, and consumer protection act.

SWOT Analysis

A SWOT analysis has been conducted on Thomas Cook as hereunder:

Strengths:

• Economies of scale for being the largest travel company in the UK and Europe
• Ability to offer affordable packages to the customers
• Strong presence across multiple service lines such as flights, resorts, hotels, and package tour holidays
• A workforce of over 20000 + employees across the globe (Smith et al. 2016)
• Good brand image

Weaknesses:

• Limited brand presence due to intense market competition from other tour operators
• Allegation of refusing to pay the statutory European Union (EU) compensation to its customers

Opportunities:

• To raise its share price through business expansion
• To increase revenue and profitability by entering into developing nations with economy packages
• To achieve better market penetration through digitalization of operations

Threats:

• Uncertainty and volatility in the aviation sector
• Intense price wars among rivals can lead to fall in market share (Dale et al. 2016)
• Unpaid compensation can increase the amount of outstanding compensations

RBV Analysis

The Resource Based View (RBV) framework is focused on analyzing the resources of an organization against the VRIN (Valuable, Rare, Inimitable, and Non-substitutable) criteria to identify resources which increases competitive advantage of the organization over its rivals (Moutinho and Vargas-Sanchez, 2018).

A VRIN analysis has been carried out on Thomas Cook as below:

Resource name	Valuable	Rare	Inimitable	Non-Substitutable
Workforce	Yes	No	Yes	No
Financial resources	Yes	Yes	No	Yes
Technologies	Yes	No	No	Yes
Brand name	Yes	Yes	Yes	Yes
Industry experience	Yes	No	Yes	Yes
Network	Yes	Yes	Yes	Yes

 

Thus, the above analysis indicates that industry experience, network, and brand name are some of the most valuable resources for Thomas Cook followed by its highly skilled workforce.

Conclusion

The current report indicates that Thomas Cook has good opportunity to expand its business into developing nations. Also, it can focus on implementing digitalized technologies to improve its business operations. The current corporation tax rate in the UK is at 19% which has a good impact on the profitability of Thomas Cook. Also, the study suggested that Thomas Cook needs to be more focused on Eco-tourism.

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