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Group Presentation

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Jack Rowe

on 22 April 2014

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Transcript of Group Presentation

Looking further into Thomas Cook.
Thomas Cook has three main competitors, these are : (Hoovers, 2014)
American Express Company
Carlson Wagonlit Travel, Inc
TUI Travel PLC

Although these competitors directly compete with Thomas Cook it is clear that these are not the only competitors that they have to deal with.

Thomas Cook offer Package holidays, flights, Cruises, travel insurance, Money exchnage and more. Therefore when mentioning the competitors of Thomas Cook, it is important to bring up all the many other companies that offer these individual services, as they will still compete.

Its basis for competing is to offer the perfect leisure experience offering a number of different experiences and services.

Sustainable tourism - "making a positive difference to people and the environment of holiday destinations" (Thomas cook, 2014)
Respect local cultures and the natural enviroment
protecting and enhancing destinations for locals and visitors.
Buying local, to help the local economy.

Porters 5 Forces
Porter Identified five forces which would impact on an organization’s behaviour in a competitive market. These include the following:

The rivalry between existing sellers in the marker
The power by customers in the market
The impact of suppliers and sellers
The potential threat of new sellers entering the market
The threat of substitute products becoming available in the market

By looking into each point further, it will allow organisations to view potential threats that it will face. This will help the organisation in any strategy, plans or in making any potential investments.
Porters 5 Forces
This Graph (mintel, 2014) shows many competitors of Thomas Cook how Atol passenger rank the. Its clear here that Tui is ranked above Thomas Cook. However The two of them are far beyond other competitors.
Thomas Cook
Threat of Substitutes.

This graph shows the, how the independent holidays is much more popular these days, and despite the reduction in both types of holiday (due to a poor economy) independent holidays are still much popular with over 7100 people preferring to "do it themselves".
e-Business activities within Thomas Cook
Thomas Cook plans on rising web penetration from 36.% in fy13 to >50% in fy15 (Thomas Cook, 2014) This shows the importance of advertising on the internet. With more and more people booking holidays online.
The objectives of e-business among the travel sector (Mintel,2013)
Reaching new customers
Increasing bookings
Improving the cost effectiveness of marketing
increasing profit and reducing costs

Express. 2013. Thomas Cook left in shade by TUI Travel | City & Business | Finance | Daily Express. [online] Available at: http://www.express.co.uk/finance/city/432436/Thomas-Cook-left-in-shade-by-TUI-Travel [Accessed: 4 Mar 2014]

Forbes. 2013. Travel Boom: Young Tourists Spent $217 Billion Last Year, More Growth Than Any Other Group. [online] Available at: http://www.forbes.com/sites/tanyamohn/2013/10/07/the-new-young-traveler-boom/ [Accessed: 4 Mar 2014].

Hoovers. 2014. Thomas Cook Group plc Names of Competitors. [online] Available at: http://www.hoovers.com/company-information/cs/competition.Thomas_Cook_Group_plc.4f8481a867e200e2.html [Accessed: 4 Mar 2014].

Ibtimes. 2012. International Tourism Arrivals To Exceed 1 Billion For First Time In 2012. [online] Available at: http://www.ibtimes.com/international-tourism-arrivals-exceed-1-billion-first-time-2012-788910 [Accessed: 4 Mar 2014].

Initiative Learning. 2014. What is e Business?. [online] Available at: http://learningebusinessinitiative.wordpress.com/2013/03/16/what-is-e-business-2/ [Accessed: 5 Mar 2014].

Mintel 2013) [online] Available at: http://academic.mintel.com/display/99946/?highlight#hit1 [Accessed: 21 Feb 2014]

Mintel. 2013. Thomas Cook reveals company rebrand. [online] Available at: http://academic.mintel.com/sinatra/oxygen_academic/display/id=680850?highlight [Accessed: 4 Mar 2014].

Mintel. 2014. Thomas Cook reduces losses in three months to 31 December. [online] Available at: http://academic.mintel.com/sinatra/oxygen_academic/display/id=695678?highlight#hit1 [Accessed: 4 Mar 2014]

Mintel (2014). Holiday Planning and Booking Process - UK - November 2013. [online] Available at: http://academic.mintel.com/display/638302/ [Accessed: 4 Mar 2014]

Thomas Cook. 2013. [online] Available at: http://www.thomascookgroup.com/wp-content/uploads/2013/03/Transforming%20Thomas%20Cook%20v14%20final%20-%20screen%20version%20-%20fonts%20embedded%5B4%5D.pdf [Accessed: 4 Mar 2014]..

Thomascook.com. 2014. Thomas Cook | Sustainable Tourism. [online] Available at: http://www.thomascook.com/sustainable-tourism [Accessed: 5 Mar 2014

Thomas Cook. 2014. Discover the key dates and info on the history of Thomas Cook. [online] Available at: http://www.thomascook.com/thomas-cook-history/ [Accessed: 4 Mar 2014].

Thomas Cook as a travel company has been around since 1841.

In 1997 Thomas Cook On-Line is launched, making Thomas Cook the first UK retail travel agency to offer customers a way to buy holidays, foreign currency, travellers cheques and guidebooks over the Internet. (Thomas Cook History, 2014) This was a great acheivement for Thomas Cook and shows the influence the internet has had.

In 2007, the Thomas Cook Group Plc was formed. This was through the merger of the Thomas Cook AG and MyTravel Group plc. (Thomas Cook History, 2014)

The British global travel company is listed on the London stock exchange in December 2007. (Thomas Cook History, 2014)

In 2013 The Thomas Cook Group Plc, replaced the traditional Globe logo, which is shown here, to the sunny heart logo. The caption "Lets go" was brought in and replaced "Don't just book it, Thomas Cook it". This re-branding exercise was a result of the near collapse of the travel giant in 2011.This is a transformation strategy and hopes to give the company a new birth . (Mintel, 2013)

Thomas Cook mission is "to perfect the personal leasuire travel experience whilst at the same time, managing our activities in a sustainable way."

The e-business activities Thomas Cook is involved in are:-
iTour system
online booking
Electronic check in
Tracking luggage
Seat Allocation
Money exchange
Discounted online booking prices.

Rappa's Model of e-business
Thomas Cook fits into Rappa's manufacturing model - manufacturing/creating the perfect holiday for customers.
Threat of New Entrants
Bargaining Power of Suppliers
Threat of Substitute Products
Bargaining Power of Customers.
Rivalry within an Industry
Current Financial Debt, the poor economy is resulting in less people spening money on holidays. Mintel, 2014) shows the reduction of people going on holidays since 2008.
Over Dependence on the Global Market
Change in Consumer Behaviour
Increase in competition

Competition among current competitors
New Entrants
Cyber Hackers
Rise in Fuel Costs - airline and cruise.
"a fifth of people who have taken an all-inclusive holiday are not interested in taking another" (Mintel ,2014)
Terrorist attacks /political issues- making holiday travels more nervous about traveling. ie TC revenue has reduced by 15 million during 2013, they claim this was a result of political unrest in Egypt. (Mintel, 2013)
Global warming. Changes in climate at holiday destinations, which could affect people decision to go abroad

New Technology e.g. Web/Mobile
Further aquisitions - eg. easyjet (strengthing fleet), web platforms
New Brand image and Television Advertising. Spending 5x the previous budget. Increasing awareness. (Mintel, 2013)

173 years of experience
Development of technology -eg. online check -in. making it easier for customers
Travel agents and Holiday Reps. Creating a personal interaction.
Increase in the number of young people traveling. (Forbes, 2013)
Its losses has decreased by 3 million in 3 months to Decemeber 2013. (mintel) Therefore fighting out of the poor recent performance.
Barriers to entry for airlines are huge. It would require a massive initial investment.
Despite this there has been a increase in the number of airline companies in the last decade. This is due to the increase in number of people traveling.
The UNWTO estimates a billion tourists, close to one-seventh of the world’s total population will travel abroad this year. It would be the first time the symbolic one billionth tourist mark is crossed". (IBTimes)
Since this increase its seems to have plateaued, therefore we regard the threat of new entrants as relatively low.
Thomas Cook is operating in the middle bracket. It has Easy Jet and RyanAir being the "low budget airlines" and has British Airways and Emirates for example being the more premium airlines.
Main Rivals TUI, have continuity outperformed Thomas cook. profits for TUI increased by 20% Online sales counted for 35% of mainstream package holidays. (Mintel, 2013)
Thomas cook blamed the hot summer of 2013 and the policical factors in Egypt for its reduction in sales. However TUI sales increased in 8% despite the heatwave back at home. (Express, 2013)
There is an existing duopoly supplying commercial airlines, consisting of beoing and airbus. As a result suppliers of aircraft hold a lot of leverage.
However, Thomas Cook have many suppliers, such as Hotels, inflight refreshments, transport, cultural excursions and activities. These suppliers will hold small bargaining power because of the number of alternatives.
Overall the bargaing power is moderate, however it is the aircraft suppliers that majorly boost this up, with a little help from the Hotels.
There are many substitutes for Thomas Cook to worry about. For example any alternative to Holidays, or Holidays within the UK. Booking flights and Hotels separately and having inderpendant holidays instead of a package holiday.
Since the technological developments such as the internet, more and ore people have been scouring the internet to find the best deals.
Of holiday goers who booked the last holiday online, booking through tour operators was only the 3rd most popular method. With the 1st using an online intermediary.
(mintel, 2014)
IBM in 1997 introduced a the new word to the world, e-business. This was there advertising campaign.
What is e-business?
The individual customer of Thomas Cook does not hold much bargaining power at all. However the customers as a collective do. Usually greater the number of customers the less bargaining power they hold.
The internet has provided customers with more bargaining power. This is because it is now incredibly easy to find an alternative flight/holiday/cruise by searching the internet. Before the internet it would require a lot more effort from the customer to find the best deal.
Thomas Cook are not offering a unique service that would be hard to find, therefore this is handing the more bargaining power over to the customers.
As it mentions on (mintel, 2014) the demand for flights/holidays is very dependent on the price. Thomas Cook is price elastic therefore, changes in the price of flights/holidays will effect the demand . The increase in competition has negatively effected the price elasticity for Thomas Cook.
Group presentation by :Josh Rigby and Jack Rowe
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