1. Company Description
Thomas Cook Group Plc is a travel company, which owns travel agencies and car rental agencies. The Group also has its own fleet of aircraft, cruise ships and resort real estate. Thomas Cook is known as one of the largest travel companies in Europe.
2. Current Strategic Situation
Appendix 1 shows the share of major players in the travel industry of Great Britain, the number of customers for the operators with the latest ATOL license in relation to the size of the common market under all licenses ATOL:
Appendix 2 shows the dominant groups in the travel industry in terms of turnover, brand and customers. Both groups continued to increase theirs stake in the business presence through mergers and acquisitions. Thomas Cook has received European Union’s approval to buy German rival Oger Tours. The transaction is valued at approximately € 30 million (£ 25.1 million). The European Competition Commission informed that this acquisition will not impede competition in the travel market.
Board of Directors of Thomas Cook Group Plc is aware of the importance of high standards of corporate governance to ensure effective decision-making. The Group is doing everything to make its Directors fully perform their duties and contribute to the success of the company and its shareholders. The management structure of the Group is presented in Appendix 3.
Thomas Cook Group Plc conducts business on the six geographical segments in 21 countries and positioned itself as the number one company on these major markets. Appendix 4 (Diagram of Enablers, Growth Drivers and Strategic Objectives of the Group) indicates that the Group has four growth factors, such as:
- Maximise value of mainstream;
- Became leading independent leading provider;
- Became a leading travel – related financial service provider;
- Capture growth value through M&A partnership.
There are two different segment of the leisure travel market: - direct suppliers and -market intermediaries. Direct suppliers of air - flights, hotels and cruise companies sell their services directly to the customer. Thomas Cook Group operates in the travel industry as an intermediary, travel agent and tour operator (see Annex 5).
3. Appraisal of Potential Future Strategy
Appendix 6 presented Ansoff ‘s Matrix which is used as a framework for identifying corporate growth opportunities:
Market Penetration – more of the same to the same customers
Thomas Cook is increasing sales of tourist services in Europe and North America
Market Development – new customers for existing products
Group continue to expand through mergers and acquisitions (Airtours plc (now MyTravel plc) and JMC Holidays Ltd (Thomas Cook))
Product Development – new product for existing customers
Growing involvement in airlines
Growing involvement in travel related financial services
Diversification – new products and new customers
Thomas Cook has plans to penetrate Russian Market and looking for the strategic partner there.
Ansoff’s Matrix of Thomas Cook Group Plc is shown in Appendix 6.
Thomas Cook’s strategy is also focused on strengthening in the following business segments:
Mainstream travel (the sale of charter holiday packages where two or more components of travel, such as flights, hotels, transfers and in-resort support, are bundled together in advance and sold to customers).
Independent travel (that is a key area of growth. Independent travel is where consumers build up the individual components of their own trip either by themselves or with the help of an agent).
Travel related financial services (Travel-related financial services broadly -fall into the categories of travel money, travel assurance and travel finance products. They are typically high margin products and are sold alongside other holiday components, package holiday and financial services businesses).
Investing in areas of future growth, primarily independent travel and new markets.
Based on the Group solid fundamentals, it should be noted that the Group is well positioned and made progress in last years, so the Group is confident to act the same way and undertake a wide range of strategic initiatives to be the market leader.
Market Penetration
Increasing sales in the existing markets
Penetrating more deeply into the existing markets by following:
- Increasing usage by existing customers
- Attracting customers away from rivals
- Encouraging non buyer to buy
- Devising and encouraging more applications
- Product Development
- New products to replace current products
- New product improvement
- Product line extension
- New products to complement existing products
- Products at different quality levels to existing products
- New innovative products because company has strong R&D capabilities and recognizable brand
New Markets:
Russia (CIS) and Middle East
Market Development:
- Selling the same product to different people
- Gaining new customers, new segments, new markets
- Entering oversees markets
Diversification
New products sold to new markets (such as Russia and Middle East) but it is a risky strategy
References
1. De Wit, B., & Meyer, R. (2004). Teaching Guide Strategy Process, Content, London: Thomson Learning, pp.295.
2. Gountas, S., 2005. Tour Operations Management. In Pender, L. & Sharpley, R., ed. The Management of Tourism. London: Sage, 47-66.
3. Johnson, G, Scholes, K., & Whittington, R., (2008). Exploring Corporate Strategy: Texts and Cases, (8th Edition), Financial Times Prentice Hall Essays and Term Papers, Harlow.
4. Lynch, R., (2009). Strategic Management, 5th Edition, Prentice Hall, Harlow, chapter 4, pp. 517-552.
5. Thomson, J., & Martin, F. (2005). Strategic Management: Awareness, Analysis and Change, Thomson Learning.
6. Williams, D., Ellis, J., (1993) “Comparative Financial Analysis.” Corporate. Strategy and Financial Analysis: Managerial, Accounting and Stock Market Perspectives. Financial. Times/Pitman Publishing, London, pp.203-247.
Internet Resources:
7. Bloomberg. Available at:
http://www.bloomberg.com/apps/quote?ticker=TCG:GR
[Accessed 20 April 2011].
8. Bloomberg. Available at:
http://www.bloomberg.com/apps/quote?ticker=TUI1:GR
[Accessed 20 April 2011].
9. Bloomberg News. Available at:
http://www.bloomberg.com/apps/quote?ticker=TUI1:GR
[Accessed 20 April 2011].
10. Bloomberg news. Available at:
http://search.bloomberg.com/search?site=wnews&client=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1&lr=-lang_ja&proxystylesheet=wnews&partialfields=-wnnis:NOAVSYND&q=TUI%20AG
[Accessed 09 April 2011].
11. Thomas Cook Group Plc. Annual Report & Accounts. Available at: http://www.thomascookgroup.com/company-summary
[Accessed 20 April 2011].
12. Thomas Cook, Russia's Intourist to set up tourism joint venture. Available at: http://en.rian.ru/business/20101125/161495762.html
[Accessed 20 April 2011].
