Strategic examination of Thomas make and the package holiday industry

Introduction

The package getaway industry will probably be worth an incredible number of pounds and is it is common for each and every country to have a few dominant head to package providers. In the united kingdom together there are four large companies namely Thomsons, First Choice, Air trips and Thomas Make meals which take care of the chunk of the business enterprise.

The package head to industry was initially identified by Thomas Make in UK when he started out a rail service from Leicester in 1841 (Discover the key schedules from the quest of Thomas Cook). This has now expanded into a full fledged industry where in fact the head to operator or the program holiday professional gathers all tourism services and them to the ultimate customer either directly or through a distribution channel such as a travel agent.

The three services that a package tour professional integrates into his one service is the move, visitor and accommodation and markets them through his intermediaries that are either travel companies, direct advertising or by using a virtual travelling company to the direct customer. (Web page, 2009 )

The company examined is Thomas Make meals which is amongst the pioneers of package getaway industry and is based in the UK.

Background

In the year 2007 the merger of My travel and the Thomas Make meals travel group placed Thomas Make at the next position in the UK travel industry (Page, 2009 ). With revenues of 6971 million pounds in sales and the27% UK market talk about (euromonitor, 2010) it is a respected travel services provider. It uses the reliable brand name of Thomas Make and My travel was still functioning in small cities with one retailer. The merger was a competitive move around in order to reduce debts and cut costs. At that time the total market share of the two companies was 21%. Thomas Make meals travel services maintained their market position of No 2 for another 3 years with the primary competitor being TUI AG. This also greatly stunned first choice and the announcement caused its stocks to drop.

It was an attempt to help make the vertically integration style of package deal providing successful by eliminating competition and using economies of range by acquiring a wider consumer foundation. Manny Fontela in those days said: "The big four can only just handle the future as they are with difficulty. The vertically integrated model continues to be greatly profitable; everyone's talking about the death of the package deal holiday but it remains profitable. " (Thomas Make meals MyTravel merger suprises travel industry - 12 Feb 2007, 2007)

Year 2010 found another merger of Thomas Make meals with the Cooperative group and the joint work is predicted to improve up to 35 million. It really is a part of Thomas Cook's bet to become the largest tour operator in britain. By this move they intend to spend less and streamline their business and deliver synergies. In the words of Manny Fontela the proposed chairman of the new group the goal of the merger is "By consolidating the high street in tandem with delivering on our existing e-commerce targets, we live realising our tactical aim to increase in-house distribution and building up our proposition to consumers. (Thomas Make share price through to FTSE 250 after news of merger while using Co-operative Group, 2010) That is again another move to eliminate competition and and expand horizontally. It brought on the companies share to go up and the stock market position to improve despite a weakened UK market.

Currently Thomas Make UK and Ireland is the second largest travel group with 19000 employees and 800 stores. It has some of the most popular traveling brands in the world including Airtours, Cresta, Direct getaways, Sunset, Sunworld and of course Thomas Make, Thomas Cook requirements, Thomas Cook Tours and Thomas Cook sports.

It thinks in expanding by both horizontal and vertical integration and thus along with mergers it is also the owner of 44 aircrafts exclusive to its fleet. Besides featuring its own travel plan Thomas Make has its own range of financial services. These include forex, cash Passport (pre-paid money, the Thomas Make credit card its own travel insurance procedures. These policies are governed by its own insurance division known as the White House Insurance Ireland. The existing rating shows that Thomas Make meals is the world's largest retailer of pre-paid money or cash passport.

Thomas Cook is also the state supporter of the London 2012 Olympic and Paralympics video games. The package deals it offers provide accommodation, move and event seat tickets. It has its own publication section which as shared 300 travel guides as of yet which cover 150 spots worldwide.

Thomas Cook also is a market leader in waiving Air Traveler obligation ( APD) on bookings from 1st November to 15th Dec. The new marketing campaign is called "Beat the Taxman" and allows passengers to save up to 75 per person. This is only being done to tone its disapprovement of the new increase in tax. Manny Fontenla-Novoa, Group CEO, Thomas Cook Group says in this respect that ""Through our 'Combat the Taxman' promotion we desire to support holidaymakers' disapproval of these new charges that they will now incur alongside reiterating our dedication to offering our customers the most effective value money. " (Thomas Make waives APD on long term holidays, 2010)

Market position of Thomas Make meals, its macro and micro environment

Thomas Make has a steady market standing of number 2 2. It faces stiff competition from TUI travel pic that was generally identified to be market no 1. The critical success factors in the marketing environment are the range of sales, revenue produced, profit made and the marketplace share. A firm evaluates itself on the percentage of travelers who have used its services and the full total revenue for the financial calendar year. Success may also be based the amount of new assets the company has received.

The package travel and leisure industry was once an extremely profitable industry. Limited understanding of travelers allowed tour providers to dominate the market and stop buying allowed them cheaper rates. Market for bundle holidays is dropping. According to a media release the acceptance of the deal industry has fallen with an all time low since 1970 and families are choosing to arrange their own vacations. This is actually the result of the introduction of a more internet savvy traveller who has quick access to knowledge. Thanks to the internet and cheap flights the lure of pre arranging holidays at cheaper rates is fading. That is happening as increasingly more travelers believe that they can custom make their own deals at a much cheaper rate.

It was once an extremely profitable industry but now increasingly more tour operators work with stringent budgets and low gains. It is therefore a common notion that the bundle head to industry is no longer as profitable as it used to be.

This is as opposed to the recent improvements in the travel and the deal travel services. Only just lately possess the unreliability of visiting independently opened up new arenas for service providers. The benefit emerged because of this of travelers viewing how package operators can provide insurance and security in the case of an airline failure or climatic risks. This is very clearly detected when Thomas Make meals provided meals and accommodation because of its stranded clients as a result of this year's 2009 Iceland volcanic eruption. Though the company lost 81. 9 million pounds the customers were satisfied from other services.

SWOT analysis

Strengths

The re-bounce of the industry is synchronous with Thomas Cook's new merger with Cooperative and then the company emerges as the leader of the travel and leisure industry. Thomas Make meals occupies a No 1 or No 2 position in all areas of its primary competencies.

Thomas Make is also very reliable from the customer's viewpoint, not only because it has reputation and it is a vintage brand but the trust also originates from the actual fact that Thomas Cook was respected by 22 million people in the entire year 2009. (thomascookgroup, 2010) Its high income of 9. 3 billion pounds also adds to the trust that you won't go into individual bankruptcy, a fear that all potential customers face using their travel providers.

The basic market where Thomas Cook is working is the united kingdom travel market known because of its strict rules and regulations. Along with ATOL (Air travel organizers permit), the head to operator must also sell a program approved by a DTI approved body. Then there are airline rules, a platform of legal regulations and insurance that a person must cover. Sales promotion and advertisement is another division that the service agency must cover. Campaign comes at a much higher price as competition like Expedia that are quickly garnering market talk about are spending a great deal on promotions. Activities to provide services should be taken care of hand and hand with activities to market efficiently to the client. This involves handling and maintaining outlet stores and a competent staff to resolve all travel related problems of travelers. This acquisition and supply is usually to be maintained in just a budget as e-savvy travelers may easily find out the true costs from the internet and not buy the package.

The real talents of Thomas Make meals travel come from the actual fact that the company has eradicated competition by horizontal integration over time. Both mergers and several acquisitions in the past many years have made certain that presently it is remaining with one major rival the TUI travel pic.

The market share of around 30% which the company holds in the offer providing industry is also commendable. This symbolizes customer trust and satisfaction in the business. Another great strength which Thomas Make meals has is its brand name. The brand was a forerunner in offer holiday provision and it is associated with better experience thus better service. The reputation that Thomas Make has and the esteem associated with it originates from the founding dad of the company and is a solid asset of the business.

The financial durability of the business is another advantage. Not merely the travelers have a warranty of going with an organization which won't leave them stranded specially following the 2010 Ireland volcanic eruptions where Thomas Make meals remained true to its customers, the company is strong to buy and pay in case there is an emergency. It offers significant buying electricity and the business uses a proactive stance in its risk management. Thomas Make meals is focusing on merger synergies of 215m set alongside the previous estimation of 155m. (Mtetwa, 2010).

Another strong point is the company's international occurrence. Though the main market if European countries and the Western world, the company is the owner of subsidiaries in eastern companies like Egypt and India. It includes usage of 21 world market segments. Besides international gain access to the business also possesses about 1200 circulation channels. Since the company owns them, the price tag on the middleman is eliminated, resulting in lower costs and competitive prices.

Last but not the least Thomas Make is the marketplace champion because of its one stop travel need services. With its own fleet of airplanes or more to 1200 retailers the business has an extremely strong market position. The company does not have to worry about airline legislation like small head to operators as they have their own fleet. Similarly it generally does not have to pay another insurance company as the company has its own insurance firm. Likewise foreign exchange for Thomas Make clients is assured at the best rates as the company provides foreign exchange. It also has its own prepaid credit card which has a very high sales rate.

With multiple brands like Sunset, Thomas Make meals sport and Thomas Make requirements and Cresta direct holidays; Thomas Cook has something to fulfill every tourist.

Weaknesses

Though Thomas Cook is market leader but it has inherent weaknesses. One of these is multiple brands which though lead to market diversification but aren't appropriately marketed. Way too many brands have led to dilemma in the heads of customer's foreg JMC and Vacation basics. Another problem which Thomas Make encounters is its property. Contrary to the belief that fixed resources are raw electricity, for Thomas Cook taking care of its multiple assets and head office spaces is problematic.

With extended development Thomas Make meals has acquired the capability to serve more people than it actually does indeed. This leads to high costs as set costs of mantainence stay the same. High quantity costs are also reported as the business incurs high marketing and administrative costs.

Opportunities

Thomas Make meals has intensive resources which it has frequently used for mergers and acquisitions. The identical resources can be used to tap unexplored marketplaces. Emma Holland in her article "Package deal Getaways" observes that tour operators should provide unique offerings to the greater exciting, discerning and requiring holiday designers. In her context successful travel companies will be the ones who are able to distinguish their customer bottom part and goal them efficiently. (Holland, 2007). Thus Thomas Cook should explore places where travelers are reluctant to go together without any external realtors help.

Thomas Cook also needs to exploit its brand strength and additional strengthen it. This will lead to increased customer consistency. Thomas Cook also needs to take good thing about small tour operator being forced from the travel industry because of the economic breakdown. The company should ensure so it fills the void created by these small providers.

Threats

The recent merger of Thomas Make meals and Cooperative has led to job cuts. This doesn't help raise worker morale and employees might be disappointed with the brand. Another environmental threat that Thomas Cook encounters is of new strategies by its primary competitor TUI AG. TUI has the no 1 market position which is currently threatened by the new Thomas Make merger. It is necessary for Thomas Cook to observe at all strategies utilized by TUI.

The most easily foresee-able market danger is the drop in demand. It is very evident from statistics that though the package getaway market keeps growing slowly, it isn't exactly booming. The cause is tailor made holidays from the internet. Thomas Cook must capture and hold on to customers yet ensure that it provides the best possible rates.

Thomas Cook also faces risk from the huge promotional campaigns of fellow tour operator specially those who find themselves completely electronic. Online providers have low over head costs to allow them to employ more advert yet sell at lower rates. Thomas Make meals must ensure its online presence, promotion and price and quality competitiveness. Though it offers party struggled to take action forming a coalition with Expedia, further work is required to be able to secure its talk about from online travel companies.

A threat which is common to all or any travel providers and so engulfs Thomas Cook is the perish ability of products and dependency on environmental factors such as weather. Planes chairs if unoccupied can lead to losses similarly if the booking is terminated the head to operator faces a loss. Climate such as rains and clouds can hold off flights also leading to losses. They are all hazards which cannot be conquer despite careful planning. These standard threats keep carefully the travel industry at its pulse.

Thomas Cook is well known both in the industry and between travelers. It is strong fiscally and has both a reputation and market show to allow growth. As all establishments are laced with obstacles, the package holiday industry also faces some but with its technology, ambition and faithful customer foundation Thomas Make is likely to maintain its market occurrence and in simple fact go completely global from being international.

Conclusion

Thomas Make is a market leader and the existing industry examination and the competitive position of Thomas Make allows objectives that it'll continue to do this. It's got both resources and current customer basic to both maintain and develop its operations. This is not only apparent from its past mergers and expansions however the current Sports travel and leisure it has sponsored by means of 2012 Olympics. Although industry is not growing at a very fast rate as it is quite saturated but Thomas Make with its innovative products and old world dependability manages to hang on to its customers by completely gratifying them. In the most recent developments Thomas Cook has developed a partnership with Expedia to maintain and increase its online occurrence.

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