Introduction
Strategic management is an important concept that should be looked into when undertaking strategy formulation. There are several tools that are used in understanding a given organization. This is an important concept that comes into play when undertaking strategic management. This paper will focus on Thomas Cook Company which deals with leisure and hospitality services. There will be analysis of the company regarding external and internal environments.
Stakeholder analysis
Thomas Cook’s main stakeholders include its employees, customers, dealers, suppliers, investors, and the communities in which they operate their business. Of importance to the company also is the society including government agencies, non-governmental organizations, and the academic sector (Durbin & Kushner, 2011).
The stakeholders of the company can be classified in the following ways. There are those stakeholders who have high power, and high interest. The matrix table below shows the classifications of the stakeholders in Thomas Cook. There are different types of stakeholders. There are those who can block and those who are going to block. In the matrix below, one example is competitors. Being in the hospitality industry, the stakeholders who will be interested with company include the government, NGOs, and the community.
Based on the PI matrix, the organization can prioritize the issues that deal with the stakeholders and suppliers so that they are able to compete with the other companies in an equal platform. Thomas Cook should also ensure that the suppliers are satisfied with the processes of the company. Thomas Cook should put more effort on investors, suppliers, and stakeholders because they affect a lot in the competition.
SWOT analysis
Strengths
There is political stability in UK. This will attract tourist to the country because visitors are assured of security. Furthermore, some of the tourists are visiting places searching for business opportunities so that they can invest. UK is one of the countries with flexible laws regarding foreigners' investments. Laws regulating businesses and investment opportunities are few; in fact, there are few barriers to overcome to do business in the country. Such issues will attract tourist from all over the world making UK as an attractive place to be (Donados, 2011).
Finally, there is only one common language in UK. This makes conversation easy because all the cities in UK are using the same language and culture. Language can be a barrier and can cost the company since they will have to train all employees on the languages used.
Opportunities
In Sydney, the airport is excellent in terms of security and infrastructure. The visitors are able to able connected from the airport to the restaurant without straining in terms of transport. There is well established transportation network system in UK. This has enabled the business people who own taxis and commercial vehicles offering transportation services to operate efficiently (Munar, 2010).
Infrastructures, especially, roads are in are good conditions, and this has reduced the number accidents happening on a daily basis. On the other hand, the tourist will experience some comfort while travelling within the country because of good roads in place (McCabe, 2012).
Weaknesses
The cost of making promotion in other countries is expensive due to differences in the currencies. It is extremely costly for the company to carry out promotions because the advertisements are not targeting the segmented market. It is challenging to segment international market for the Digital Food for Travel Company because they focus on the international market (McCabe, 2012).
Another weakness facing the company is that UK is similar to Canada. This can hinder tourist who has ever been to Canada because he or she will be expecting to see the same thing.
Threats
The UK dollar is so strong as compared to other countries. This makes it expensive for the tourists who are visiting UK. Besides, there is a risk of fluctuation of exchange rates for the foreign currencies. It is, therefore, hard for the tourist especially from America to budget for expenses in UK (McCabe, 2012).
Though there mitigation strategy for this issue, it is sometime difficult to predict the future making it expensive for the financial institution to decide on the percentage of mitigating the risk. Because of this, some visitors from other parts of the world might prefer visiting other places with less risk such as Canada, Greece and others (Andreas, 2006).
Recommendation
The company should go on with their use of technology in their operations. There should be more research carried out in this industry. There are more changes that are being experienced by the client. In this era and age, many tourists and leisure travelers will make use of technology looking for companies that will guide them in their travels. Online presence is an important technology that should be implemented for any company in this field. The company should be willing to spend money in research programs that will shape the use of technology and look at the changes that are experienced with the use of technology. Cost control is an issue that should be undertaken well in this industry. Thomas Cook should be in a position to manage costs effectively. There are low and high seasons in the financial world. These low seasons have tremendous effects in this industry sector. This is because the services that are offered are luxurious and people will tend to cut down the costs of these services when there are financial issues faced in the world. Successful companies in these sectors are those that area able to manage costs and have loyalty programs (Thomas Cook Group 2013).
Question 1
The direction of the scope of the company will hinder or bring competitive advantage that is required. The direction that the company has taken is with the use of information and communication technologies. This will change the way information regarding clients will be achieved in the company. One aspect that technology can bring to the successful use of technology is that of customer relationship management (CRM). CRM is the practice of documenting customer information: contacts and their address for the purpose of building good relations and responding to after sale services. The information should be available to everyone for the purpose of answering questions. CRM systems are used to manage business contacts, clients, and sales leads. The customer data provided helps the organization provide services effectively (Ravi Kalakota, 2010). With the use of this technology, customer information will be acquired and retained that can be used for gaining competitive edge above the competitors. The competition analysis takes into account the competitor's position in the industry and the threat it may pose to other businesses. The competitor is identified which offers the same product, with the same customer base. The study will also look into the goals, mission, strategies and resources available to the competitor. The future of the competitor also has to be looked at.
Another issue that comes up is differentiation of the markets. Thomas Cook has different rates for different markets. This is evident in the way the company has rates for different destionations. The clients come in different flavours where there are those who would like to adventure on local and remote sites while there are those who would like to adventure on centralised sites. The prives for these destinations vary.
Question 2
The company has a lot of potential in its strategy that they have developed. Thomas Cook has differentiated itself by offering reliable and quality services to their customers. More to the point, they differentiate themselves from competitors through their recognized brand and their pricing strategies that they use. The company prices its products highly to signal the high quality and reliability of their products. This strategy has attracted high class customers to use the company’s products.
Thomas Cook has been known brand in quality. They have achieved quality in two aspects: one aspect of the quality is reliability and the other is excellence. Reliability is terms of doing perfectly what they are designed to do. The division of labor has been known to improve the quality in the sense that the workers handle tasks in perfect ways without many errors. Thomas Cook Organization has been known to win in this area.
Thomas Cook Organization, like any other organization has made use of information technology in the strategy. They have used information technology to have an online presence. They have made use of web developments to ensure that they reach to distant clients. With the Internet, they are able to sell their presence. They have automated many of their internal processes and also ensured that processes are performed faster. With information technology, Thomas Cook has been able to interact with the suppliers and customers. The customers have been able to know of new products that have been developed in the organization.
This is another strategy that is used by an organization to show the pricing, promotion, advertising, and product design. Thomas Cook Company has been on the forefront in making use of marketing as her strategic move and method. It has started using online methods to advertise and reach to the online community.
There are many methods that companies and organizations can use in order to achieve greater efficiency and lower costs of production. Research and development is one method that has been seen to help an organization achieve the desired efficiency and cost reduction. One of the ways that research and development has been seen to improve productivity and cost is the designing and churning of products which are simple to use and uses less parts. They also come up with products which are designed for manufacturing; they require a closer supervision so that they come up with better products. Research and design has also been known to help reduce the production of goods in an organization. One of the ways of reducing this is reducing the process of production. This is an important source of competitive advantage to the organization. It has been this way from time immemorial.
Thomas Cook has made use of this strategy so much that it has a well distinguished use of economies of scale. Economies of scale, in this case, have a well balanced and wide division of labor. This way, the company has spread the fixed costs widely and evenly across all the functions of operations. Economies of scale and, in particular, division of labor have enabled the company to have employees who are specialized and well suited to work in the company.
Question 3
The strategic options that are available for the company include creating a continuous uniformity of the experience across company’s locations. Thomas Cook’s must align their processes and procedures to provide a similar service to all customers, in order to foster continuing brand loyalty. If customers come to expect the same positive experience at all restaurants repeat business is much more likely to occur. With the many branches that are available in the UK, there is a need to ensure that there is service in all the branches. This will ensure uniformity. Having disparate services in the branches will bring a bad impression with the clients.
The future of the company lies in maximizing the strengths and minimizing the weakness of the company. Some of the efforts which should be implemented as soon as possible are strategies of how to close the gap which was created by poor financial performance which hindered its system growth in the recent years.
Another strategic option that the company has is the use of information systems in most of the operations. This is achieved by ensuring that trends that are seen in the information and communication fields are adopted in the business. This will bring competitive advantage of the organization. It is an important aspect that is seen in the world today. It is important to understand the requirements. This strategic option is what many companies have put in place to ensure that the competition is kept at even. Information systems bring a new way of understanding the clients.
Question 4
There are strategic approaches that the company can make use of in the long term. These approaches can help to boost the company forward and make huge profits. One of the ways is through use of information technology. This is a strategy that enables the clients to get access to valuable information. This will enable the clients to have the right information very fast and therefore make decisions faster than other competitors. This is a working strategy as information systems is a competitive tool that helps clients get information fast (Bettley, Mayle, & Tantoush, 2005).
Another strategic approach for the company is merging with complementary companies. This will enable the company to gain access to other services that they are not able to offer to the clients. This should be availed to the clients. The lack of this could be a hindering factor for some services. This should be changed. There are companies like tour guide companies which , could make perfect merge with Thomas Cook. Their services compliment and, therefore, can be a good match for the company.
Another strategic approach that the company can make is to have strategic marketing in new markets. This will ensure a new flow of clients from new markets which has not been used in the past. This is an important strategy which can be used in the market. Markets like Africa, the US, Australia, and Asia have not been adequately utilized. These markets can be reached by making aggressive marketing.
Question 5
One of the strategic theories that I recommend for the company is that of evolutionary strategy where it is required to evolve with the way it offers information. The organization should be able to offer services that are important to the clients. They should evolve from brick-and-mortar Company to being a modern company that makes use of information systems to offer information. Evolutionary model is where a company evolves in the way a certain process is being offered. This will ensure that the services that the company offers meet the requirements of the client. This is an important strategy that should be looked into when undertaking strategy formulation for the company. Another strategy model that the company can take is that of organizational strategies where structures and the organization are independent. This shows that the way the organization is structured brings ways in which the organization will succeed in the long run. The organizational structure of Thomas Cook makes it possible to achieve their goals and strategies. The performance of Thomas Cook depends on organizational structures it has in its internal organization. It is important to understand how the organizational structure can be aligned so that the optimal performance can be achieved. Internal organization helps an organization to have better ways in which they can be organized.
Another strategic theory that is evidently used in the company is organizational economics. This is seen in the way the company assesses the impact that the universal economic crunch has on its performance. The company has had to adjust on ways in which it can survive. They have had to adjust the prices for the different sectors where the use of differentiation is evident and common.
Question 6
There are critical success factors that will affect how this company will come out in the long run. One of the critical success factors is effective change management. This is due to current use of information technology. With the changes that are seen in information access, there is a need to adapt to these changes and make use of these information systems (Bettley, & Tantoush, 2007). Another critical success factor is effective information technology use. With the current trends that are seen in the information and communication sector, the ability to adapt to these changes is an effective and effective way to manage these changes. Thomas Cook is in the right direction with the way it adopts the use of technology in many operations.
One of the other critical success factors that should be considered by the management of Thomas Cook is effective management of costs. The costs should be varied according to the target market. Cost affects the outcome of an organization as uncontrolled costs will affect the expenditure. This is an issue that should be looked into. Cost control is an issue that should be undertaken well in this industry. Thomas Cook should be in a position to manage costs effectively. There are low and high seasons in the financial world. These low seasons have tremendous effects in this industry sector.
Another critical success factor that should be availed in the company is effective marketing. There should be adequate marketing of the services that are offered by the company. Even though the company targets local people, there should be aggressive marketing of the services of the company beyond the borders of the United Kingdom. Marketing forms an important aspect of success in this industry. This is because many people seeking such services will depend on the advertisement that has been made. Advertising cannot be over-emphasized in this field. There should be effective advertising in order to inform potential clients in this industry.
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