Business is an essential aspect that is done for the purpose of trading products and services from one destination to another. It is vital for the manager to make all necessary arrangement those are useful in the manner for increase overall business of TUI company. In the meanwhile, there are certain contemporary issues that are associated within an organization. Some demographic changes have been challenging matters for the other companies (Settersten, 2012). Business is considering as one of the internal and external implication that are associated with the department are mentioned under this report. As an increasing branded consumer services provided company TUI is influenced by all factors those are related with the future development and sustainability of the company. This project aims at providing vital information about four external impacts that can influence to an organization as well as significance to TUI get competitive advantage. Apart from this, concept of globalization and their vital benefits are discussed under this report. Critical assessment of all relevance to an organization and their policies and competitive planning. The effectiveness of business is mentioned effective to get reliable outcomes in near future time. Examination of crucial aspects those are associated with the department are mentioned effective under this report.
PESTLE analysis of TUI
The tourism industry operates in a sector which has different effect on the operations of an enterprise. It is important that while taking the distinct decisions the possible change in these factors are determined in advance so that accordingly judgments are made which can deliver the required returns to an enterprise. To understand how it is effecting TUI a detailed discussion is given below:
- Political-These are those factors which are distinct in every country and has to be considered while expanding business globally (Sharpley and Telfer, 2015). It is of great importance that before choosing the place for developing present sector the political factors of same are evaluated. TUI is operating at a huge scale and is greatly effected by the laws which are formulated against this sector. In order to ensure security and safety of the service users the government involvement in tourism is high which restricts the capacity of company to grow. Degree of risk is high in those part of the countries where there is less stability as it made difficult for the management of TUI to take long term decisions. Apart from this the impact of terrorism is also high on this industry as it has a direct influence on the demand for this services as places prone to attacks are not easy to visit. Government follow strict laws against same and limits tourism in such places.
- Economic-This is the most effecting factor which though has an indirect impact on business but restricts the profitability of TUI to a great extent. The most effecting factor under this is the inflation rate which effects the capacity of TUI to raise its profit margins. Instability in the economic conditions makes it difficult to achieve the target sales as in case of inflation in the society demand for these services reduces. Thereafter taxes which are imposed by different legal bodies further divide the revenues earned and hence the growth becomes limited to a limit (Büscher and Arsel, 2012).
- Social-Social factors consist of demographic and culture aspect of the external area. Changes in living style make the customer more demanding for new experiences with concentration on price. Consumer generate a new attitude of wait and see and do last time bookings. Changes in the global economy affect the organization. Painful effect on international travel from 2000 to 2004 happen due to recession and the health crises, such as breakdown of SARS in 2003. Now a day’s people are more brand conscious it’s a common social factor. People trust on the services provided by popular brand name. The brand name is developed by their last experience or by the mouth of publicity or the advertisement activity. This make TUI to look after their previous and post services with the advertisement campaign of the company to develop their name in the society. Change in the attitude towards safety and environment of the customer. The survey conducted by Boston consultancy group on “going green” inform about the attitude of the customer. According to this survey and many other surveys which are done time to time tell that people become more environment conscious and get attract to a companies who have better environmental policies (Banerjee-Guha, 2013).
- Technological factor-The term technology can be described as various types of technological equipment’s, machines or software to implement in company. This will facilitate to carrying out different kinds of activities or tasks on regular basis ion an appropriate manner to gain better productivity as well as profitability. Technology is helpful in several aspects as it provides support to boost up daily outcomes and facilitate to reduce cost as well as time. Companies are become capable to reduce their work pressure along with providing facility of easy purchasing to customers. TUI has also introduce online facility to clients for buying tickets and gain any kind of information regarding booking system of the enterprise. Technology helps them to cut off staff members because it will reduce work load due top use of applications or software in company for various purposes. It will support to decrease overall cost of production of an organisation which facilitate to render better quality of services to consumers. It will TUI to attract more customers along with retaining the current ones to boost up profit share as well. They also use several innovative promotional activities and launch programmes on television which helps them keep in touch with customers. TUI can also implement an effective as well as efficient system of EDS planning to improve the potential which support to attain better profits (Matanle and Rausch, 2011).
- Legal factor-This can be described as various kinds of legal rules and regulations which are made by government authorities which is necessary to be followed by every organisation to run their business in proper manner. Different legal policies are prepared so that no one can harm others and each business entity can conduct their procedures easily and earn desired profits. Different countries have established their one criteria of legal policies which are mandatory for every organisation to follow while running their business in particular nation. It is necessary to first observe and analyse thoroughly about legislation of particular place while going to launch a new venture or branch of company so that goals or objectives can be fulfilled without facing by harmful barrier. In respect of TUI, they provide facilities to customers in different countries and hence they follow all of their legal policies regarding health & safety measures. This will help them to make travelling journey of consumers more comfortable. TUI have to face several difficulties while establishing their branches on other nations because they put several restrictions on the growth of business in different parts of the world (Kontopodis, 2012).
- Environmental-Last but not the least are these factors in which the working of an enterprise is monitored so that in no way it hampers the surroundings. It is necessary for TUI to ensure that it uses the technology which is friendly with the surroundings. ISO 14001 standards are maintained as it is a legal framework constructed in order to secure the environment from getting effected.
It can be said that microeconomic factors tend to influence business operations in a significant manner. These elements tend to influence availability of resource and their usage in context of an organisation. TUI is a renowned tourism company which is known to impacted through elements which lies on the microeconomic grounds. These forces are in immediate close to business organisation and can make sure that its functions and operations are influenced (Moore, Dunham and Dunham, 2014). A brief description of the major elements in the microeconomic environment are as follows:
- Market size: The size of the market impacts on number of goods which are to be sold to the prospective buyers. The determination of higher potential customers for an organisation improves the chances of sustainability of business. The primary impact can be seen through the number of quantities of product which are to be traded. There is an impact upon price of the services offered as well. The rise in the demand due to market size assures that prices of services are increased as well.
- Demand: Demand is defined to the amount of services which people are willing and able to buy at provided market prices. The demand for a particular service not only influences decision making by an organisation but also influences prices for goods and services as well. The law of demand has stated that a marginal increase in the price of product or service will assure that there is decline in the supply with similar intensity. The TUI is a renowned travel operating company which is making sure that suitable pricing strategies are formed which assures that its goal of profit making is being fulfilled. The right understanding of the forces of demand and supply will assure that a business is able to form right decisions for enterprise (Street, 2014).
- Supply: The supply section of an organisation refers to the number of people which can be served by the company through their endeavours. TUI have been known to organise tours and travelling packages and is being operating at large scale when it comes to rendering services to people in the United Kingdom market. To manage the supply in the ideal manner it is essential for a business to take into account pricing and demand of the service. Before formulating decision relating to business it is essential to gather a detailed understanding of forces of demand and prices so that equilibrium could be established. Due to inflation in the market, it has been identified that there is an increase in cost to organise tours and traveller which shoot up the prices. The increase in the prices have resulted in marginal decrease in the supply which is to be countered by an organisation with development of the cost cutting measures so that more and more people are influenced in taking up travelling. It has been become crucial for a business to make sure that opportunities in the economy can be well capitalised upon so that sustainability is achieved (Lan and et. al., 2014).
- Competitors: TUI Company is influenced by competition pose by different companies in same industry. Large number of competitors signifies lots of demand for products and services provided. If TUI lack competition, then they won't be able to provide better services to customers and may lack behind from other rival teams. Main competitors of TUI are Kuoni Travels, Barrhead Travels, The Ultimate Travel Company, Cox and Kings and Thomas Cook. Company can build effective strategies to face the competition in better manner. TUI offers different types of products to their customers Charter and scheduled passenger airlines, package holidays, cruise lines, hotels and resorts. They have merged with First Choice in order to increase the market share and give competition to others rival companies.
- Distribution chain: TUI Company believes in direct distribution to the group's strategy. Company increases direct distribution of holidays in order to lower distribution costs and also reduces the reliance on third party distributors. This helps them to build good relations with customers. Company is using online media to provide better customer services. By this customer’s holiday experienced has increased and has become more user friendly (Yarber, Sayad and Strong, 2013).
- Suppliers: TUI has been following guidelines known as Supplier Code of Conduct. This serves as a guideline to standards of ethical conduct, values and principles. Company expects suppliers to be stick to their deals when making it with workers, agent, suppliers and off course customers. Suppliers to TUI uphold the principles by adopting accessible and clear policies and procedures to respect human rights and labour laws. They also support local committees, identify and monitors environmental impacts and also maintain Quality assurance and health and Safety policies and procedures in business where possible. TUI Travel has a global supply chain and their suppliers are their driving force for improving company's sustainability performance.
(i) Relevance of globalisation and it influence on policies and competitive strategies
Globalisation is that procedure which incorporate and interaction between organisation, companies and authorities in all over the world. With the help of enhancing global interactions that comes for growth and success of international trade, culture and ideas in better manner. Globalisation has presented and existing for wide range of centuries through which this will evolving trade routes that includes bond trade, immigration and colonization. The impact of globalisation on TUI group from a number of perspectives effectively (Barakat, 2015). The current international recession that will directly impact on TUI group in all over the world and there are some places which are unaffected. The globalisation can be relevance factor for the company so this will attracting large number of customers towards organisation services and facilities in proper manner. There are various factors of globalisation that will directly influence on TUI group which affect on competitive strategy are described as follows:
- Influenced by policies and procedures– The government develop and make various policies or strategies which directly or indirectly affect on TUI group so they need to manage all such factors which occurs in the business organisation. There are various factors such as enhancing available procedures, food revenue and income, technology, etc. this is required for travel and tourism company is to follow all rules and regulation which has been made by government bodies for their smoothly running of business operations in proper manner. So this is necessary for them is to developing and making all current policies and procedures in effectively (Ferguson, 2011).
- Impact of social ecosystem– There is no doubt that, social media has mainly affect on travel and tourism sector for reserving tickets to share views and reviews. According to the TUI group survey, there are around 60% travellers said that social networking has highly influence various changes in their travelling plans. Globalisation influences the social ecosystem so this will directly affect on TUI group operations and its functions in proper manner.
- Instant communication technologies– In current time period, telephone is the one medium of communication with their family or friend. With the help of globalisation, they can easily interacting with their travellers and tourists who are willing to travel in different places. They can also attracting large number of travellers who can interacting with them through emails, telephones, Skype. TUI adopting communication technology which help them in easily interacting with their domestic as well as international visitors who willing to going outside for some different places.
- Global mobility and ease of travel– TUI group need to analysing and examining whole market place where they conduct travelling for their tourists in different locations. They will provide international mobility and ease in travel for their visitors effectively. The ease of travel will assist in dealing with various issues and barriers such as frustration, fear and expense (Shepherd, 2016). This is another factor which directly affect on travel sector that will help in getting high amount of income and revenue from their visitors.
- Enhancing awareness of new places– The globalisation influences on tourism is mainly creating awareness of destination and the wide range of free activities or functions, locations and cultures to travel in all over the world. TUI need to gaining attention of more visitors towards services or facilities in better manner. They are generating high level of skills and knowledge of destination which is main key factor of conducting marketing on specific location through this they will achieved by way of travel events, shows, blogs and other forms of interactions with their travellers. Along with this, globalisation will influences towards policies and strategies of TUI group and assist in getting high income or profitability (Coetzee, 2014).
(ii) Effectiveness of organizational response
Globalisation is a most effective process that helps to increasing business structure on international level easily.Through this an organisation can build positive relations with other countries. TUI is a travel and tourism company that provide effective services to local and international tourists. For them, it is required to expand their business structure on international level because through this they can serve quality services to each and every tourist properly. For a small scale organisation, it is hard to maximise their business easily in several countries while as large scale firm respond positively on such business activities. For TUI, it can be a smart move, so for them effectiveness of organisation's respond is given below -
- Innovation and invention– Globalisation is a most effective business approach that helps to maximise business structure on international level. In this procedure, innovation helps in making positive changes in business strategies and services. TUI needs to make positive changes through innovation process to getting desirable benefits and outcomes as well. Innovation is a effective business procedure that assist to use creative thoughts and ideas in business process to getting higher competitive advantages. Invention is also a business strategy in which employees of firm introduce new services for their customers to capture their attention easily towards them. These bother activities can be beneficial for TUI to getting positive respond of their globalisation strategies (Vasudevan and Doherty, 2012). Through innovation process, employees of firm can easily build direct relation with their visitors to provide them higher satisfaction by quality services. Innovation and invention provide their equal contribution to rebuild new strategies of business development process. In this business approach, advance technology provide its equal contribution in globalisation strategies.
- Employees collaboration- For management of an organisation, it is required to collaborate positive with their employees. Through this, they can easily implement several strategies in their business firm to getting desirable outcomes easily. Employees are the key element of an organisation who provide their effective services and contribution to achieve business goals easily (Kiely, 2012). So for this management needs to collaborate properly with them to analyse their own view and opinions toward this. Through this, they can easily make positive changes in different working approaches to getting positive and desirable benefits and outcomes. Main objective of this procedure is to provide quality service to tourists and visitors. These activities helps to build positive relations with target customers for getting long term benefits at international level.
- Fluctuation in Policies– For TUI, it sis required to fluctuate their business policy on the bases of several changes in economy. Through this thy can easily adopt positive alteration in business activities and procedures. These planning and strategies of firm should have to be based on globalisation process to getting maximum advantages from several economies. Policies of TUI can be tourism services, analysis of visitors requirement and different service areas to provide them higher satisfaction easily. All these fluctuation assist to capture customers eyes toward their services (Schore, 2015). These changes can be new offers, modification in rate or cost and provide maximum quality services to clients in several countries.
- Build international relations–This is a most impactful strategy of an organisation to build positive relations with international visitors to maximise profitability and growth. In this employee of TUI needs to analyse tourist's requirement and demand for specific service. Through this they can easily make positive strategies to provide them exact services. Through this they can build positive relation with clients to get long term advantage from international boundaries. These are the most appropriate organisational procedure to achieve their target goals and objective in appropriate manner.
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(iii) Areas of improvement
TUI is a well developed organization whose main motive is to serve travelling facilities to entire world by coming with outstanding ideas or thoughts. They are engaged in offering accommodation to their tourist whomsoever are travelling from one place to another by grabbing global opportunities. In this modern world competition is getting maximized due to increment in consumer demand or choices. Mainly, clients are preferring modern things in order to experience distinct activities (Beard, 2015). Every individual is having their personal reason to travel across the international boundaries such as; business purpose, personal leisure, spending time with loved ones, educational tour and so on. Thus, travel agencies is trying to cope up with new trends and dealing with various types of customers for creating positive relations with them. As a result company can easily enhance their performance by satisfying the needs of entire society as per their choice or preferences.
In around Feb 5thand 8thexpertise people of TUI and GIZ are coming closer for engaging in a meeting in TUI magic life resort in Egypt. Their main reason behind this togetherness is to mix their resources and aiming to develop a sustainable business driven scheme for offering best opportunities. They are trying to introducing modern ideas for capturing the attention of maximum clients which resulted in profit maximization. By analysing the study it has been identified that selected firm needs to improve some certain areas by considering necessary elements which is discussed as follows:-
High qualified staff- Initial component which needs to be give first priority is that employees because almost entire business activities are handled and managed by them only. For example; service is also provide by staff, handling of several accommodation, management is done by manager and so on (Potter and et. al., 2017). It means qualifying of staff members is indispensable for company success in order to accomplish organizational operations in effective manner by satisfying the customer requirements. Tourism industry is encountering various types of travellers with distinct opinions and viewpoints towards certain subject area. For instance; few rich people are very conscious about their living standard due to which they are always preferring hygienic areas. It is only possible if staff are getting high educational training. Thus, education is seeing as initial priority for entire country because lack of qualified employees is consider as major obstacle in development phase of an enterprise.
Selection of partners (stakeholders)-TUI is seen as one of the largest tourism player across the global marketplace because of their unique strategies and high class investors. Thus, second thing which needs to improved is that board of directors needs to considering few major elements before getting engaged with any stakeholders (Fischer, 2015). For instance; current position, background, financial condition of investors and so on. If all these thing will be considered then possibilities of mistakes is automatically get minimized.
Throughout the study of this meeting various things is determined which is requisite for company to enhance or reduce it so that company can easily get succeeded in establish their positive image at marketplace. However, most useful area of enhancement are-employees improvement through effective training sessions, minimum involvement of young women's in workforce, absence of coordination in between various stakeholders henceforth. It means TUI needs to enhance all these areas by considering several elements like; changes which is incurred at global marketplace, modification in existing norms, policies, rules and regulations or so on. Therefore, firm is focussing on various elements for overcoming all the problems which is encountered by organization while dealing at international market so that they can minimize probabilities of mistakes or errors(Allais and Hagen, 2013) .
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From the above assignment is has been concluded that Globalisation is procedure of integration and interaction within people, organisations and government of several nations, along with the process of international trade and investment which is helped by IT (information technology). Apart from this it gives wide impact on economic development, political factors and many more. Globalisation gives its wide impact on travel and tourism sector TUI is generating more and more revenue because of the same. Now a days people love to travel and exploring new places this is the reason of increasing business in this sector. Business environment is of two types external and internal when these both modify it gives wide impact on working of TUI. Thus, these factors should be identified properly so opportunities can be garbed and threats minimized. Along with this business strategy should be framed in proper manner so that working of enterprise will not effect. You can also ask for assignment help from the experts. Chat NOW!
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