Thomas Cook Case Study Report (Mini Activity #1) - Individual

Read the journal article case study of Thomas Cook together with the timeline and any additional research you may need.

Discuss the probable reasons why you think Thomas Cook Failed.

Report APA Format with citations and references.

Double Spaced/ 250 words to a page/ 12 pt Font

Min 500 words (title page and references not included)

INTRODUCTION Thomas Cook Group pic was a British global travel group. In the second half of the 19th century, the development of tourism in the European Market was partially attributed to the business of Thomas Cook and Son, who popularized mass tourism to the region. However, on 23 September 2019, winding-up orders were made against Thomas Cook Group plc and associated companies. The court-appointed the Official Receiver liquidator of the Thomas Cook companies in liquidation. Eight years ago, after trading turned sour, the company lurched perilously close to the brink of insolvency. It was put back on its feet from the edge through emergency assistance from a group of banks led by RBS (Royal Bank of Scotland) (BBC, 2019a). The present study has made use of the SWOT analysis, PESTEL analysis and Porter five forces model to present the case of collapse of Thomas Cook Plc by analyzing the factors resulting in it RESEARCH METHODOLOGY The study is based on secondary research. No primary research is carried out in for paper. The author used secondary sources of data, such as journals, news, and articles, for the purpose of this study. The paper used academic frameworks to analyze the company, its position and the external and internal forces that was associated with the case. The study reflects inductive research approach where the researcher initially begins with collection of data then in the next phase, the researcher analyzes the pattern and lastly theorize from the data to research. (Jankowicz, 2004). The research strategy that was used for this paper is case study i.e, the author was provided with given case and based on that context the study is carried out. The study also reflects qualitative approach and no quantitative analysis is carried out FINDINGS Thomas Cook, despite its challenges, remained an active market player till last decade. A SWOT analysis, along with PESTEL analysis and Porters' Five forces model of the company is presented below: SWOT Analysis Strengths Due to the company's goodwill, customers identified with the reliable brand name as the company was listed on the stock exchange also. It included shareholders' networks and partnerships with experienced suppliers by collaborating internationally with hotels and airlines in order to leverage different offerings to their customers. Weaknesses The weakness of the company can be attributed to its lack of innovativeness in the offered products which are not adaptable to the dynamicity of the market. Though the brand name had gained momentum, the limited budget caused due to high operational and functional costs weakened the company against smaller market players targeting the same clients (Travel, 2013] which led to lack of credibility amongst the customers. Opportunities Although many would see the 9/11 event as a drastic, this could offer Thomas Cook with an opportunity to capture a more significant market share. Since the incident caused Havoc in the world, the travel industry was also severely affected resulting in decreased visitors from international as well as the domestic country. However, with enhanced security controls, trusted traveler programs and management of the crisis in a proactive way could have resulted in a seamless travel experience Threats With a changing global and local environment, the era of technology held a more substantial challenge for the company. The use of technology has narrowed the gap between large tourist organizations such as T.C. and smaller companies. It also included the Euro crisis and the continued risk of a Eurozone breakup and its potential negative effect on the German economy and hence clients' travel requirements. also faced threats from various online tourism websites which offered low-cost tour packages with multiple discounts related to air travel, hotel bookings etc applied through online tourism company. PESTEL ANALYSIS Political Factors The tourism and travel industry within the U.K, had faced noticeable governmental pressure. Suffice to mention here was the introduction of tourism and bedroom tax. Resultantly, England, was presented as the highest tourist destination in Europe (BHA, 2012). It also included various policies framed related to travel as well as the aviation sector. Legal factors Legal factors include the grant of licensing rights, proprietary rights to use technology, patents, copyrights or trademarks of specific goods and services. In return, a royalty is paid by the licensee (Milbract 2013). Also, it involves completion of legal obligations such as regular salary to employees and information of any uncertainties regarding job opportunities in the company. However, the loss of goodwill resulted in a loss of consumers and the outdated technology lead to declined tour products offered by the company. External Forces Affecting Thomas Cook and Porter's Five Forces Degree of Competitive Rivalry Thomas Cook competition was reduced during the merger and acquisitions mentioned above. Overall, however, the dominant form of competition experienced is from smaller specialist operators (Travel, 2013). These small operators offer various services such as hiring a car or renting a car after travelling through the air, providing best hotels at reasonable prices etc. increased competition with the tourism company where the customer has booked its holiday packages The Threat of Substitute Products The advent of 3D T.V. coupled with easy access to the theatre and movies locally, has made long-distance travel and tourism less appealing. Bargaining Power of Buyers The tourism websites offering various discounts and offers for the customers, it shifts the bargaining power to the end-user where the cost of switching the services of any particular company is reduced. Bargaining Power of Suppliers The firm can recruit excellent staff for providing excellent and exceptional experiences to the dient The threat of new entrants to the Market The threat posed by new entrants to Mass Tourism may be low with the market, generally experiencing a slump (Furseth, 2013]