The Thomas Cook France Strategy On French Market Marketing Essay

The doubting doubting doubting doubting Thomas gain France Strategy On cut Market Marketing EssayIn 2009, the international offerism assiduity generated to a greater extent than 611 Billion Euros but it goes through a transformation elbow grease to or so externals factors.Firstly, the development of internet has powericularly limited the context, countenanceting a disintermediation between the turns operators suppliers and the finals customers. On the other hand, Internet has also allowed the development of Pure players specialized in discount prices on the tourism industry.Because of this situation, the major tour operators collections and travel agents be developing new strategies. Their chief(prenominal)s purposes are to satisfy the customers pauperization and to respond to the emergence of electronic grocery stores system.Most of tours operators offer a wide campaign of holidays softwares in a highly competitive market constantly in evolution.The Package Holidays (or all inclusive travels) is defined as a single package including at least travel and accommodation and sometimes other service. In France, its very popular because the customers like the value it provides, the security offered and the large choices of depot.Numerous conference as TUI, Expedia, Go Travel, baseball club Med are present in the French market but Thomas spend a penny is a very good exercise in term of strategy, positioning and reapingIndeed, with 3 million annual customers in 2009 and a market conduct of 13%, Thomas cook France is a second major tour operator in France offering a large range of tourism and work through all over the realness for all the budgets. Thanks to the skill of Jets tours and results in net progression, the conference is now able to develop a strategy based on the innovation and on it net growth.In 2012, Thomas Cook wants to reach 20% of market share on the tour operating market and is interesting to explore the strategic position of the gatheringings to achieve its objectives.Throughout this report, we are going to analyze the macro-environment of the group thank to the Pestle Analysis and the five forces frame effect, as well as it strategic capability in order to understand it strategic fit and direction with Environment.2 Task A The Macro- EnvironmentTo maintain profitability, the tours operators look at to analyze their personal credit line environment to achieve high sales volume and to reduce the lives of the packages by allowing to the customers a great valuable experience.Nowadays, tourism is a dynamic industry, authentically vital for the international economy. Nevertheless, this industry is very dependent of the macro-environment mutations.Indeed, some elements dope influence the stability of the market as the geopolitics conflicts, effects of terrorism and environmental issues for example. alone this can own impacts on the tours operators performance as well as in their strategic directi on.Its necessary for the managers to use the Pestle Analysis for understanding their industry situation. Thanks to this useful tool the tours operators will be able to consider its external environment before to make wrong choices and to put in tail their strategies.2.1 PESTLE AnalysisFigure 1 Pestel Factor on the tourism industry2.1.1 PoliticalThe political influence is certain. Since the 11 September attacks the global political situation has changed. These facts have had bad impacts on the tourism industry and on its different actors (travel agent, airline companies and tour operators). The precautions related to security, the struggle a shitst the terrorism and the focusing of the crisis became study factors which resulted to modifications and reorganization in the touristic activities. The procedures to enter on the territories are harder, controls in the airports have been reinforced and all this affect tourist perceptions.Cause to the deficit public, the French brass will establish in 2012 a new Taxation policy on the internet subscription (source le Figaro). This decision can impact the purchasing personnel of the French people and influence their holidays destinations.Nevertheless, some events promoted the activities touristic like the Schengen area expansion or the enlargement of the European Union (Cyprus in 2004 which is a great destination for the French people, Turkey in a near future).2.1.2 EconomicAll stakeholders are unvoicedly influenced by the economic situation. tourism is one of the most full of life industries in the world. The international tourists arrivals are estimated to have declined worldwide by 4% in 2009 to 880 millions. In the same year, international tourism generated 611 billion in trade earnings according to the world tourism organization.Cause to the global economic crisis and the problem of the H1N1 Flue, the short distance travel have been privileged face up to the purchasing position diminution. Indeed, in Fran ce, merely 20% of the population traveled in a foreign country and 46% didnt go on holidays cause to the diminution of their budget. The decreasing of the Euro and the un conflict augmentation can represent also a threat for the French customers.Moreover, the pressure on the fuel prices by the speculation, the conflicts or by the OPEP countries can cause majors impacts in the Tour operators strategies because the oil prices is also an great factor in the package holidays industry.2.1.3 SocialNowadays, we can see a essay in tourism by elderly and by the student. News customers expectations emerge and influence the tour operators offers.With the development of cheapest holidays (particularly in Mediterranean countries), the travel abroad became old-hat and now, lot of people are looking for a consumption more responsible. The attitudes concerning safety and environment play from now on an important role in the customers decisionsMoreover, brand consciousness has a good impact on the people.2.1.4 TechnologicalWith the internet development, lot of actors offer competitive price and also at the oddment minute. This entire permit for the customers to choose and to compareThe impacts are considerable because the online reservation and sales permits to eliminate staff, intermediaries and in this way tour operators have to adopt their strategies in order to dont lose their customers. Nevertheless, Internet is also a low barrier for potential entrants.Internet has also permitted the emergence of platform like Trip Advisor. solely in few seconds the customers have the power to destroy the reputation of a company.2.1.5 EnvironmentThe sustainable tourism represents a good opportunity in the Tourism industry. We can see consumption more responsible and the augmentation of ethical packages holidays. For example, KUONI group realized a partnership with some organizations or associations to promote tourism more responsible.However, Tourism can contribute to the degradat ion of the environment (CO2 emission cause to the aviation contribution, green house effects, pressure on the local resources and water for some countries).Natural disasters like the tsunami, Caribbean hurricane, Iceland disruptive volcano have major negatives effects. At long term, these events can cause many problems on destinations.2.1.6 LegalIn France, the employment law concerning the working time (35 hour per week, 5 weeks of holidays) has permitted to the French people to travel more but on shorts distances which favored the development of short stays(Marrakech, Roma).2.2 Porters 5 Forces2.2.1 Threat of new entrants is low High barriers to entry cod to a high concentration Global players and strategic alliances Merger and acquisition reinforce the positioning of big groups and let little chance to new distributors (maybe niche market). They design competitive prices and lot of destinations thank to economies of scales and integration strategies. stigmatize recognition pla y an important role as barrier to new entrants. In the French market, more than 35% of market share is controlled by Thomas Cook and TUI.2.2.2 Threat of substitutes is high Emergence of the information and communication technologies Internet product development1 Has permitted the online agency emergence which necessitate less investments so a repercussion on the final price The role of the tours operating is questioned. Now its possible to plan his trips without going through the traditional earnings.2.2.3 The power of buyers High due to large choices of substitutes The buyer power is high Easier access to substitutes / Customers can compare the offers and impose their conditions to have a better value for money Customer reactions keep back the possibility to go on her opinion on the company performances and services after their trips = Necessity for the tours operators to managing the customer social intercourse and to attract and keep it.2.2.4 The power of suppliers High d ue to a disintermediation phenomenon E-Commerce development2 Suppliers (airline companies, hostels) can sale directly to the final customer in order to absorb3the intermediarys margin Difficulties for companies having a low market share to have power on supplies2.2.5 Competitive Rivalry- High due to pressure on the margins and differentiation opportunitiesThe French market of tour operating is fragmented and copious saturated. High fixed cost largely favors the top leaders and permits to realize concentration and integration strategies in order to pressure on the marginsThe big group came from internet are stronger and reinforce their position with acquisition and merger to propose competitive pricesHowever, there are still opportunities for companies becauseLow differentiation between the tours operators Excepted nightclub Med, Voyageurs du Monde or Marmara for example, the tours operators compete on a same plane section(midrange and up market) without a really distinct identity Even if, Thomas Cook and TUI have an important financial capabilities, the financial performances of the sector are average2.3 Critical success factorNow, we can identify the precise success factors to conclude the macro-environment analysis. This latter are important key points to consider in order gaining a competitive advantageThe price is highly important even for the up market segment because the tourism industry know a strong pressure on the marginsOffer a service of quality to the customer in order to be differentiate of the competition and to attract and keep the customerControl the costs in order to be competitive on the marketConsider the ICT (information and communications technologies) to extend the customer base and to face up at the evolution of the marketPartnerships and network2.4 Opportunities and ThreatsOPPORTUNITIESTHREATSSales augmentation thanks to internetOnline Agencies growth and development oeuvre law favorable for travelsDisintermediation between the tours operators suppliers and the finals customersOpportunities in niche and up market segmentAir traffic controls cause to terrorismEcotourism developmentEasier access to substitutes nock consciousnessIncrease of the oil barrel priceCustomers are looking for a service personalized based on the quality purchasing power diminution / Global recessionLow differentiation between the tours operatorsNatural disasters, green house effectsTable 1 Opportunities and Threats3 Task BThe external factors play a major role on the tourism industry and its actors. Now that the macro-environment analysis has been realized, the second parts will deal with the strategic capabilities of Thomas Cook France.3.1 Thomas Cook FranceSince 2000 the group is present on the French market and possesses a valuable brand image thanks to its graduation exercise statistical distribution network in France (660 agencies), a strong brand portfolio (Jet Tours, Club Jumbo) and values which place customers at the sum of its preoccupations.In this second part of the assignment, competitive advantage, resources and competencies will be analyze in order to understand how the group can surmount the threats and exploit the opportunities of the market.3.2 Value stove3.2.1 Primary activitiesThe main activities generating added values for Thomas Cook is firstly the supply of packages followed by the composition of the offer and its arrangements according to their customers and orientation. Then, come an important key concerning the service based on sales experience and the manner to advice. To conclude, the after sales service in order to insure the customer satisfaction and his fidelization.3.2.2 Support ActivitiesSupport activities provide place upright and added value to the primary functions improving the effectiveness and efficiency of the latter. If tour operator want be competitive in the market, he has to acquire informatics systems and infrastructure. Moreover, as Thomas Cook is an intermediary bet ween suppliers and the customer, the management of the human resources is highly important to insure a support in the primary activities. In this context, the network and partnerships are essentials in order to offer competitive touristic products and services and Thomas cook is well positioned on this point with more than 150 partnerships (Club Med, Traveltainment)This value chain of mountains provides an overview of the functioning of a tour operator like Thomas Cook and will help the managers to understand which activities provide more value to be competitive. basis and informatics systems human resources formation, experience, destinationKnowledgeDevelopment of partnerships and networks contactsSUPPLIESCOMPOSITION OF THE PACKAGES HOLIDAYSMARKETINGANDSALESSERVICEFigure 3 Thomas Cook France Value Chain3.3 Resources and competences3.3.1 corporeal resources and capabilitiesEven if Thomas Cook is a service provider, the tangibles goods that it possesses take on a strategic importanc e.The most important factor for the group is the manipulation of its most important physical resource its 660 agencies on all the French territory. These agencies permit to develop a good quality in term of sales and advices but also permit to identify in live the demand evolution. Thomas Cook is the first tour operator which covers all the territory thanks to its distribution network. TUI Travel, the leader on the French market arrive in second position with almost 400 agencies. (..). The most important factor for tour operator capabilities is the utilization of the distribution framework. More than 60 % of the sales are carried out by the agencies network.Moreover, Thomas cook possess a quite civilize IT infrastructure thanks to its partnership with TravelTainment. Thanks to a performing tool concerning the online reservation, the group proposes a high technological solution and became the first group in France to put in place such a partnership.3.3.2 Human Resources and compete nciesThanks to 1700 employees at the attention of the customers, Thomas Cook France attach an importance to human resources managementThe human resources policy of the group, emphases training and adaptation of teams to increase the professionalization and promote an operational decentralization. All the employees are positively aware of all the destinations.Nevertheless, the low train of wage can be a threat for the group in term of competitiveness. Indeed, in 2010, 40% of the employees have participated at a strike to demand augmentation face to positive results.One indicator for the human resources competency of Thomas Cook can be the Chairman knowledge,skills, experienceandbehaviorused to make better performance of the group. Since 2006, the chairman of Thomas Cook, Denis Wathier, expert in E-commerce fulfils totally the group expectations in accordance with the market opportunities and threats (E-commerce evolution). He has refocused the strategy, developed the franchise netw ork and internet sales and has permitted to recover profitability. He has a great valuable experience in tourism industry (see Table 3) and the frequency of chairman substitutions have been stop (source).Since 2006doubting Thomas cookCHAIRMAN2004 2006MAEVAGroup strategy Director2000 -2004VOYAGES-SNCF.COMGeneral Director1996 -2000PIERRE VACANCES TOURISMEMarketing and CommunicationDirector1995 -1996CLUB MDITERRANEMarketing Director France1990 -1995UCPAMarketing and sales ManagerFigure 4 Denis Waltier Experience, Thomas Cook France Chairman3.4 financial resources and competenciesSince 2007, Thomas Cook have positive results (Table4) because in 2006 the net income was 6300 000 . Denis Waltier hopes for 2010 an operational profitability of 5 %. This profitability will be the result of a hard work concerning the staff control cost and package holidays costs.THOMAS COOK France20082007EvolutionNet income71900 0004.400.000+ 1534,09 %Gross operating profit-900.000-1.700.000+ 47,06 %Tab le 2 Financial resultsRatioTHOMAS COOK France20082007EvolutionCash flowStaff costs1.900.0004000004.200.0001.300.000-54,76 %-69,23%Table 3 Financial RatioStaff cost is a key performance in term of cost management. The difference is significant for 2007-2008. This entire permit to be more competitive on the market because there is a commodious pressure on the margins.3.5 Intangible resources and capabilitiesThe intangible resource of Thomas Cook is its brand recognition and experience. The group has a huge brand image in France but also all around the world. In 2001, after only one year of experience in the French Market, Thomas Cook has had 31% of notoriety and overtook competitors based on the market since more than 10 years. In this segment, the group has a significant potential in term of competitive advantage.Moreover, the leadership position of Thomas Cook on the French market is explained by the values which animate its business the quality of services and the customer satis faction.3.6 Overview about Threshold vs. Unique resources /CompetenciesRESOURCESCOMPETENCIESThreshold competenciesFinancialHumanFinancialHumanPhysicalIntangibleCapabilities for competitiveAdvantageIntangiblePhysicalFigure 4 Threshold vs. Unique Resources / CompetenciesThe principal competitive advantage of Thomas Cook France is its reputation and brand name which are two elements which permit them to be the second leadership on the French market. With more than 150 partnerships, 4 billions of customers and a strong presence in the international market, the brand Thomas Cook has a good reputation and notoriety.3.7. Evaluation of a sustainable competitive advantageThe sustainable competitive advantage of Thomas Cook is its distribution network. With a multi-canal distribution strategy, the group is in advance on its competitors. Indeed, it has the best distribution capabilities in term of agencies and covers all the French territory. All this permit to gain market share and to have a great positioning in term of distribution. The group hopes to overtake TUI Travel in 2 years thanks to this advantage.3.8 Summary of Strengths and weaknessesSTRENGHTSWEAKNESSESExcelent brand image and notorietyHuman resources Decrease of the wagesCompetitive distribution network 660 agenciesHigh Chairman substitutions (4 in five years)Human competenciesFinancial resources Negative gross operating profitPositioned on all the segmentsLow cost with Club JumboMid-range withUp market with Jet ToursThe group is late on the internet distribution networkIntangible resources Lack of identification on other Thomas Cook brandsStrong partnership and relation with suppliersNet Income growthTable 4 Strengths and weaknesses4. Task C4.1 Strategic DirectionThomas Cook France follows a strategy based on its growth network and on innovation. The principal objective for Thomas Cook France is to control the costs in order to be competitive.Thomas Cook is conscious of the threats and opportunities on the market. Nowadays, the group wants to strengthen its positioning on the French market and developed new segments like its niche concept pilot trs prive and Au coeur du monde.Thanks to the Ansoff matrix, we can analyse the strategic direction Two main optionsMarket penetration Thomas cook has to gain market share if the group wants to achieve its objectives for 2012 20% of market share in 2012. The group proposes competitive products and services. It has a strong power vis--vis suppliers and thanks to its strong distribution network, he has in advance on these competitors. Now, the group has to increase their economies of scaleIt has to have a clear positioning on the marketHorizontal integration4.2. Strategic gybeOpportunity /ThreatsSUITABLEStrategy?CommentsEco tourism product developmentXFor the moment Thomas Cook doesnt take account of this opportunity in its strategy. It has strong partnership with non gouvernemental organizations like plante urgence but doesnt propose ethic al packages holidays.Brand consciousnessThomas Cook France have a strong brand image and its communication strategy is based on its knowledge and experienceService personalized for the customersThe customer is in the center of its preoccupations. Their only objective is to give at the customer an unforgettable experience. For example Thomas Cook France is the only company who propose an assistance in French in their village holidaysPurchasing power diminutionThanks to its new low-cost product Le Club Jumbo, the group can face up to the global recession and propose substitution product and services to maintain their sales volumeInternet developmentXThe group is late on this segment. The sales represent only 11% of the sales. The Chairman has decided to invest in this network and wait for the next yearsLow differentiation between the tours operatorsXEven if the group is positioned on all the range, it has a lack of differentiation due to the numbers of its offers and its positioning s trategy is not enough clearOnline Agencies growth and development confiscate strategy thanks to the development of an online platform Vacances trs prives.comGreen house effects/ Global WarmingThe sustainable development is a priority in the Thomas Cook strategy. Since 2007, the group put in place a strategy to reinforce their image 1 package holiday bought = 1 point planted in IndonesiaOpportunities in niche marketThe group propose a new offer positioned on a niche segment high life package holidays at decreasing price scaleTable 5 Strategic Fit of Thomas CookCritical succes factorsMatch?CommentsThe price-Thomas Cook propose competitive prices thanks to its network and partnerships-Strong relations with the suppliers which permit economies of scale and to be competitive-Pricing policyServive of qualityQuality of the service is at the center of the preoccupationsBefore the travel Assistance 24/24 and 7/7 by phone or internetDuring the travel special assistance servicesAfter the travel Customer satisfaction studyConsider the ICTPartnerships150 partnershipsControl of the costs.Table 6 Thomas Cook France match with critical success factorsReferences ListBooksGerry Johnson, Kevan Scholes and Richard Whittington, 8th edition, Exploring Corporate 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