Business Essay Sample: Thomas Cook Group

Published: 2022-03-15
Business Essay Sample: Thomas Cook Group
Type of paper:  Research paper
Categories:  SWOT analysis Business strategy
Pages: 7
Wordcount: 1740 words
15 min read

Bearing the name of the founder, Thomas Cook is a travel company established, in 1843. With its focus being on both local and international tourism, the Holiday group targets over one billion travelers every year in the United Kingdom and abroad. Its offices are based in London, England. The development of a strong brand image comes from a commitment to its core values, which include customer satisfaction and environmental sustainability. Notably, the emerging concern on global climate change to cut down carbon emissions lies in the heart of the organization. It seeks to establish positive social and economic benefits brought by travel (Armstrong, 2015). However, the industry faces critical challenges, and possible solutions have been implemented for customers to enjoy the best tour experience. In the study, the strategic position of Thomas Cook is reviewed to provide insights on the possible challenges it is likely to confront over the next five years and evaluate how such bottlenecks can be addressed within and beyond the organization.

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Thomas Cook faces stiff competition from the TUI Travel Company based in Germany. Nevertheless, customer retention being one of the core focuses has ensured the company remains successful due to the implementation of competitive strategies, such as the low-cost focus. The tactic lies in the ability to target a specific group in the market and offer comfortable discounts. The approach is used mainly by small medium enterprises (SMEs) to compete against giant companies. As revealed in a recent report, Thomas Cook- online market is estimated to have grown by over thirty percent (Tomczak, 2018). High market share in the entire European continent is attributable to the said success because of a full year supply of revenue.

Strategic Position

The backbone of the differentiation focus strategy is customization. Instead of lowering prices for a specified service, Individual needs of customers are met by individualization. In a bid to analyze the strategic position of the current business environment, the Porter model was employed. From analysis, environmental factors encompassing Thomas Cook's business model include industrial competition, supplier power, buyer power and the threat of substitutes. For the organization to guarantee relevancy in the present competitive environment, excellent managerial skills will be imperative (Tomczak, 2018).

Competitive Edge

In compliance with the existing laws of the European Union and following directives by the agencies mandated with addressing security threats, Thomas Cook has implementated a range of measures that has enabled it maintain a competitive edge over rivals. For instance, it provides clients with security travel advisory from the government to contain the current threat of terrorism. With the increasing global threat of attacks, training of employees has been on the forefront. In the 2016 Thomas Cook sustainability report, the company noted its role in improving customer satisfaction and safety. Through the promotion of Human rights, the organization safeguards child rights by making sure the United Nations guiding principles on business align with that of child protection.

Information Technology

Information technology has been employed to offer quality services to all clients by guaranteeing the flow of information from customers to managers. Timely decisions and communication to the affected party are guaranteed. Also, reasonable payment schedules have fostered a healthy relationship with suppliers and consumers (Wilson, 2012). To improve its global presence, E-commerce based on social media marketing dominates that of its competitors, which gives it a competitive edge over its key rivals.

Corporate Culture

Thomas Cook values its human capital and always ensures the development of a culture that has the capacity to safeguard a healthy business competition. On that regard, the efficiency of any organization relies on the ability of the human resource to operate on a level where talents and gifts are tapped and geared towards the attainment of a common goal. The Talent Plan in Thomas Cook Company identifies hardworking employees based on performance and prospect. Equally, rewards include promotions and increment of their remunerations. Concerning Maslow's theory of motivation, such approaches contribute to a quality, committed workforce (Mullins, 2012).

The Company exhibits an innovative strategy to wade through the challenge of capacity control by venturing in tourism education. The institution is charged with the responsibility of character and capacity development. Further, travel guide materials are provided to clients with destinations throughout the United Kingdom. Towards producing quality research, skills are nurtured all across the board to exploit the existing gap in the travel industry.

Buyer Power

A significant advantage has been noted due to the reputation of Thomas Cook's relationship with supplies, which has resulted in discounted prices for the organization's products. As literature opines, companies with a weak brand image are subject to buy expensive products, resulting in a lower profit margin (Morgan, 2009). Tourist hotels, as well as guides, offer the best example of how the company has usurped supplier power. Merging of companies too has brought a fresh perspective on generation and implementation of ideas in the market. Due to stiff competition in the tour sector in the United Kingdom, buyer power has increased significantly because of the presence of a wide range of product choices. Therefore, companies that exhibit a high competitive advantage provide attractive bargains to their consumers. Internet ensures that client have real-time information about such offers and prices changes.


The threat of substitution lies in rival companies, who offer similar products especially the joint ventures in the hotel and tourism sectors. Cruise ships are emerging as a major competitor owing to their growth over the recent times because of their ability to provide luxury accommodation. Online shopping has lowered the frequency of international traveling (Michaelidou, 2011). However, Thomas Cook offers products that are efficient, friendly and effective, and hence overshadowing most of its competitors.

SWOT Analysis


Analysis of its strength, weaknesses, opportunities, and threats allows a further clarification of the company's marketing strategy. In 2009, a volcano in Iceland resulted in cancellation of flights and passengers left stranded. Amid such a devastating challenge, the organization stepped in and provided meals and accommodation to the victims. Although the company lost over eighty million pounds, clients gained significant trust with the organization due to the manner in which it handled what seemed catastrophic. In the same way, its high income of over nine billion pounds adds to this trust which eliminates the fear of bankruptcy in its customers as well as suppliers (Tomczak, 2018).

Horizontal integration has eliminated most of its competitors, with only TUI Travel as its primary rival. Recent studies show that the company's current market share is over thirty percent, which shows a commendable level of trust in its clients on its products thanks the company's focus on customer satisfaction. Its adherence to the strict air travel rules and regulations by the United Kingdom has retained most of its clients owing to the current global threat of terrorism.

The corporation has profound buying power and revenue of 215 million pounds, which is higher than the 2015's 155 million pounds. The firm's strong presence in the financial market guarantees its passengers that they are not only traveling with a reputable company but also with a partner who would not leave them stranded. This asset together with the company being viewed as an old organization plays to its advantage (Teece, 2010).

The corporation's fleet of airplanes clearly underscores its leader position in the market. With over 1200 outlets, its market position is secure. Likewise, owning Thomas Cook insurance company means it does not have to pay another company for insurance of its aircraft. The wide range of products offered by the firm ensures customer satisfaction.


Despite its strengths, many brand names spearheading the firm's market diversity have created confusion for many of its consumers. Management of assets has proved to be a big challenge. High marketing costs have led to a lower profit margin. With vast resources, Thomas can increase its presence through mergers and at the same time tap unexplored markets, correspondingly providing travelers to destinations they have never experienced before. Following recent mergers, the Corporation laid off employees, which increased uncertainty and contributed to poor economic outcomes.

Its primary competitor threatens to widen its gap by exploiting such opportunities. However, virtual online operators have inadequate resources to inject into the industry; therefore, Thomas Cook's online presence will have to improve tremendously. Environmental factors directly affect business as the difficulties that come with predicting their occurrence. For this reason, canceled plane flights are losses to the company. Organizations lose the market despite careful planning because of the intricacy in predicting the magnitudes of such incidents (Wilson, 2012).

Environmental impact of air travel and tourism is estimated to be at five percent. Due to increased carbon emission and subsequent degradation of the ozone layer, the corporation has offered significant steps to reduce such. Apart from lowering fuel usage the 2016 sustainability report indicated a commitment in the reduction of water usage, use sustainable materials reduce production of waste and use a renewable energy source. Sharing of technological advancement with colleagues to reduce fuel use is also highlighted.


The airline company upholds the Paris Agreement which provides a legal framework which assists national governments to lower their carbon emissions by managing environmental impact. The holistic approach provides an enhanced campaign to support emerging and middle-income countries in a bid to keep global temperatures well below two degrees Celsius.

The International Civil Aviation Organization (ICAO) being a key partner in oversight of all companies in the air travel, designs technical and operational improvements to obtain an alternative sustainable fuel. With the majority of greenhouse gas emissions emanating from the airline, Thomas Cook purchased new aircraft with an estimated fuel and emission cuts being 6-9 percent over the planes lifetime (Andreasen, 2008).

The Collaborative Environmental Management approach provides for the 'optimum flight' project a method to measure the optimum conditions of a flight and its impact on fuel efficiency. The airline firm took part and concluded that at least 2 percent of fuel could be saved by reduction of truck miles, continuous descent approaches and minimizing flat landing. The project encourages cooperation between different companies to share information on technological growth aimed at reduced fuel usage (Harris, 2009).

Increased water shortage over the years motivated Thomas Cook in 2014 to partner with a German water expert company which introduced a pilot project in 12 luxury hotels in Greece. The results of the study followed the emergence of a handbook used to demonstrate the best way to manage water consumption. On implementing the recommendations of the review, water usage was cut by 11 percent. That same year, the project was awarded the most innovati...

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