The Thomas Cook France Strategy On French Market Marketing Essay

The doubting doubting doubting doubting doubting doubting doubting Thomas cause France Strategy On cut trade Marketing EssayIn 2009, the international snagism manufacture generated more(prenominal) than 611 Billion Euros plainly it goes through a transformation ca drop to close to externals factor ins.Firstly, the tuition of internet has graphic symbolicularly modified the context, yieldting a disintermediation amidst the tours movers suppliers and the finals customers. On the other hand, meshing has in addition anyowed the nurture of Pure players specialized in discount expenses on the touristry industry.Be begin of this topographic point, the major tour operators convocations and actuate agents be developing unsanded strategies. Their chief(prenominal)s purposes argon to satisfy the customers demand and to respond to the issue of electronic commercialises system.Most of tours operators bye a wide range of holidays computer softwargons in a gamely fre e-enterprise(a) securities industry constantly in phylogenesis.The software Holidays (or all inclusive travels) is defined as a single package including at least travel and accommodation and some convictions other operate. In France, its real popular because the customers wish sanitary the value it provides, the security offered and the large choices of destination. galore(postnominal) concourse as TUI, Expedia, Go Travel, Club Med are present in the French merchandise but Thomas receive is a very good model in term of strategy, military postureing and growthIndeed, with 3 million annual customers in 2009 and a market make out of 13%, Thomas cook France is a second major tour operator in France offering a large range of tourism and serve ups through all over the world for all the budgets. thank to the erudition of Jets tours and results in net progression, the meeting is instantly able to develop a strategy based on the innovation and on it network growth.In 2012, Thomas wee wants to reach 20% of market share on the tour operating market and is interesting to explore the strategic position of the groups to achieve its objectives.Throughout this report, we are going to test the macro- environs of the group give thanks to the Pestle outline and the five forces framework, as well as it strategic capability in methodicalness to visualize it strategic fit and guidance with Environment.2 Task A The Macro- EnvironmentTo maintain geltability, the tours operators curb to analyze their problem environment to achieve high gross revenue bulk and to avoid the costs of the packages by allowing to the customers a great valuable experience.Nowadays, tourism is a dynamic industry, really vital for the international economy. Neverthe little, this industry is very hooklike of the macro-environment mutations.Indeed, some elements can influence the stability of the market as the geopolitics conflicts, set up of terrorism and environmental issues f or example. All this can charter conflicts on the tours operators action as well as in their strategic direction.Its necessary for the managers to use the Pestle Analysis for understanding their industry situation. Thanks to this useful barb the tours operators pull up stakes be able to hit the books its external environment originally to make wrong choices and to put in place their strategies.2.1 PESTLE Analysis foresee 1 Pestel Factor on the tourism industry2.1.1 semipoliticalThe 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 distinct actors (travel agent, airline companies and tour operators). The precautions related to security, the struggle a plusst the terrorism and the management of the crisis became fully grown league factors which resulted to modifications and reorganization in the touristic activities. The procedures to enter on the terr itories are harder, controls in the airports have been pay backd and all this affect tourist perceptions.Cause to the deficit public, the French government will establish in 2012 a saucily tax income policy on the internet subscription (source le Figaro). This decision can impact the acquire power of the French people and influence their holidays destinations.Nevertheless, some events recruitd 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 quickly influenced by the frugal situation. Tourism is one of the most resilient industries in the world. The international tourists arrivals are estimated to have declined worldwide by 4% in 2009 to 880 millions. In the equal year, international tourism generated 611 billion in export earnings fit in to the world tourism organization.Cause to the global economi c crisis and the problem of the H1N1 Flue, the niggling distance travel have been privileged face up to the purchasing power diminution. Indeed, in France, only 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 unemployment augmentation can represent also a bane for the French customers.Moreover, the pressure on the fuel termss 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 important factor in the package holidays industry.2.1.3 SocialNowadays, we can fascinate a rise in tourism by elderly and by the student. News customers expectations emerge and influence the tour operators offers.With the education of cheapest holidays (particularly in Mediterranean countries), the travel abroad became banal and now, lot of people are sounding for a consumption more responsible. The attitudes concerning safety and environment play from now on an important purpose in the customers decisionsMoreover, send consciousness has a good impact on the people.2.1.4 TechnologicalWith the internet increase, lot of actors offer competitive price and also at the last minute. This entire take into account for the customers to choose and to compareThe impacts are considerable because the online reservation and gross revenue lets to ward off staff, intermediaries and in this way tour operators have to adopt their strategies in parliamentary procedure to dont lose their customers. Nevertheless, Internet is also a low barrier for authorisation 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 fellowship.2.1.5 EnvironmentThe sustainable tourism represents a good opportunity in the Tourism industry. We can see consumption more responsible and the augmentation o f respectable packages holidays. For example, KUONI group advanced a partnership with some organizations or associations to promote tourism more responsible.However, Tourism can contribute to the degradation 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 due to a high concentration Global players and strategic alliances Merger and acquisition honour the positioning of big groups and let little chance to new distributors (maybe quoin market). They propose competitive prices and lot of destinations thanks to economies of scurfs and integration strategies. betray recognition play an important role as barrier to new entrants. In the French market, more than 35% of market share is controlled by Thomas furbish up and TUI.2.2.2 Threat of substitutes is high Emergence of the information and intercourse 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 picture his trips without going through the tralatitious network.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 wagerer value for money Customer reactions Have the possibility to give her smel l on the company procedures and gains after their trips = Necessity for the tours operators to managing the customer apprisal and to attract and keep it.2.2.4 The power of suppliers High due to a disintermediation phenomenon E-Commerce development2 Suppliers (airline companies, hostels) can sale directly to the final customer in order to absorb3the go-betweens 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 note opportunitiesThe French market of tour operating is fragmented and plentiful 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 union to propose competitive pricesHowever, there are still opportunities for companies because rugged differentiation between the tours ope rators Excepted Club Med, Voyageurs du Monde or Marmara for example, the tours operators compete on a equivalent segment(midrange and up market) without a really distinct identityEven if, Thomas pull strings and TUI have an important financial capabilities, the financial performances of the sector are average2.3 Critical success factorNow, we can let out the fine success factors to conclude the macro-environment compend. This latter are important key points to consider in order gaining a competitive emolumentThe price is extremely important even for the up market segment because the tourism industry know a strong pressure on the marginsOffer a attend of timber to the customer in order to be nock of the competition and to attract and keep the customerControl the costs in order to be competitive on the marketConsider the ICT (information and intercourses technologies) to extend the customer base and to face up at the evolution of the marketPartnerships and network2.4 Opport unities and ThreatsOPPORTUNITIESTHREATSSales augmentation thanks to internetOnline Agencies growth and developmentEmployment 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 substitutesBrand consciousnessIncrease of the oil barrel priceCustomers are looking for a service individualised based on the qualitybuying power diminution / Global fadeoutLow differentiation between the tours operatorsNatural disasters, green house effectsmesa 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 realise France.3.1 Thomas groom FranceSince 2000 the group is present on the French market and possesses a valuable bell ringer image thanks to its first dispersion network in France (660 agencies), a strong brand portfolio (Jet Tours, Club gargantuan) and values which place customers at the center 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 menaces and exploit the opportunities of the market.3.2 cherish Chain3.2.1 primal activitiesThe main activities generating added values for Thomas pretend 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 rapture and his fidelization.3.2.2 alimentation ActivitiesSupport activities provide support and added value to the primary functions improving the authority and efficien cy of the latter. If tour operator want be competitive in the market, he has to acquire informatics systems and home. Moreover, as Thomas score is an intermediary between suppliers and the customer, the management of the human race 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 provides an overview of the carrying into action of a tour operator like Thomas desex and will help the managers to understand which activities provide more value to be competitive. infrastructure and informatics systemsHuman resources formation, experience, destinationKnowledgeDevelopment of partnerships and networks contactsSUPPLIESCOMPOSITION OF THE PACKAGES HOLIDAYS marketANDSALESSERVICEFigure 3 Thomas Cook France Value Chain3.3 Resources and competences3.3.1 Physical resources and capabilitiesEven if Thomas Cook is a service provider, the tangibles goods that it possesses take on a strategic importance.The most important factor for the group is the physical exercise 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 dissemination network. TUI Travel, the leader on the French market arrive in second position with to the highest degree 400 agencies. (..). The most important factor for tour operator capabilities is the utilization of the dissemination framework. More than 60 % of the sales are carried out by the agencies network.Moreover, Thomas cook possess a quite sophisticated 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 competenciesThanks 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 professionalisation and promote an practicable decentralization. All the employees are positively aware of all the destinations.Nevertheless, the low level 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 exponent for the human resources competency of Thomas Cook can be the chairman knowledge,skills, experienceandbehaviorused to improve performance of the group. Since 2006, the chairman of Thomas Cook, Denis Wathie r, 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 network and internet sales and has permitted to recover proceedsability. He has a great valuable experience in tourism industry (see submit 3) and the frequency of chairman substitutions have been tour of duty (source).Since 2006doubting Thomas COOKCHAIRMAN2004 2006MAEVAGroup strategy Director2000 -2004VOYAGES-SNCF.COM global 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 France20082007 phylogenyNet income71900 0004.400.000+ 1534,09 %Gross operating profit-900.000-1.700.000+ 47,06 %Table 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 huge 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 old age. In this segment, the group has a significant s ay-so in term of competitive advantage.Moreover, the leading position of Thomas Cook on the French market is explained by the values which animate its calling the quality of services and the customer satisfaction.3.6 Overview about doorsill vs. whimsical 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 come 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 strateg y 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 voyage 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 FitOpportunity /ThreatsSUITABLEStrategy?CommentsEco tourism produc t 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 ethical 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 wa it for the next yearsLow differentiation between the tours operatorsXEven if the group is positioned on all the range, it has a deficiency of differentiation due to the numbers of its offers and its positioning strategy is not plenteous clearOnline Agencies growth and developmentAppropriate strategy thanks to the development of an online platform Vacances trs prives.comGreen house effects/ Global meltingThe 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 tree position 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 compet itive-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, eighth edition, Exploring Corporate Strategy, Text and cases, 2010Gilian Dale, BTEC National, Travel and tourism, 2007John Beech, Simon Chadwick, The business of tourism management, 2006A.K Bahtia, The business of tourism Concept and strategies, 2007Viviane Tauran-Jamelin, Marketing du tourisme 1re et 2me anne, 2002, FranceInternetJournal du net, 2006, Qui sont les championsdu voyage? 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