PESTEL Analysis Of Thomas Cook PLC

1.Describe the structure of the company, its management and how it is governed.

2.Identify why companies may benefit from conducting PESTEL analysis.

3.Explain the general external environmental forces that could influence, or have influenced the company that you have chosen.

Question 1

A.You must give a general overview of your chosen company, including its history and the organisational structure.

B.Briefly explain how your chosen company is governed. This should include  the relationships between The Board of Directors of the  company and,:

a.the shareholders

b.employees and,

c.other members of the public.

Question 2:

A.Identify the purpose of PESTLE analysis for a business organisation.

Question 3:                                               

Explain the PESTEL factors that affect the operations of your chosen company.  Give relevant practical examples to illustrate your points.

Organizational Structure and Governance of Thomas Cook PLC

The report helps in analyzing the different external and internal environment analysis of a respective company named Thomas Cook PLC. The PESTEL analysis has to be done for Thomas Cook as to understand the benefits from conducting PESTLE analysis.

Thomas Cook PLC is British global travel organization that has been listed on London Stock Exchange. It was formed in the year 2007 in the month of June by the merger of Thomas Cook AG. Thomas Cook operates in major five divisions that include United Kingdom, Germany, Europe, Northern Europe and Central Europe (Thomascook.in 2018). Thomas Cook is the major sponsor of the Peterborough United and Manchester City football team clubs.

Figure 1: Logo of Thomas Cook

(Source: Thomascook.in 2018)

The numbers of employees who are working in Thomas Cook PLC Company are 21,940 all over the world. The net income generated by the respective company was £9 million and the revenue generated by the company is £7,812 million. Thomas Cook PLC is one of the leading leisure groups of travel that operates in more than 16 source markets. It has been ranked as number two in the world in terms of revenue in the core markets and its shares are listed in the London Stock Exchange.

Figure 2: Organizational Structure of Thomas Cook PLC

(Source: Created by author)

From the organizational structure, it can be analyzed that the Non-executive chairperson Mr. Frank Meysman chairs the board. In addition, the board currently includes two non-executive and two executive directors. Thomas Cook PLC directors guide and make changes in the structure of the members of the organization as this helps them in implementing diversification in the management of the organization in an effective manner (Armstrong et al. 2015).

The Board of Directors governs the company and the structure of the company is hierarchical in nature. There are two directors on board wherein the key people of Thomas Cook were Frank Meysman Non-Executive and Chairman Peter Fankhauser, the CEO of the company. The election of the key people in Thomas Cook was done in the year 2012 in the month of May. Furthermore, the chairperson and executive director was appointed in the year 2003 in the month of August (Afonina 2015).

Corporate Governance is essential and necessary in nature for both the company along with the stakeholders of the company. Stakeholders are defined as the independent party that has stake in the business. Therefore, the stakeholders can be both external and internal to the business (Keller and Kotler 2016). Thomas Cook PLC has been maintaining cordial relationship with the employees, shareholders and other members of the public as well. The examples of the stakeholders of Thomas Cook PLC are as follows:

The Purpose of Conducting PESTLE Analysis for a Business Organization

Figure 3: Stakeholders

(Source: Shabanova et al. 2015)

The employees are the ones who help in delivering and creating products as well as services that will be consumed by the customers. The employees are the valuable assets of the organization and the employers of Thomas Cook provides different motivation to the employees as this will help them to perform well and increase the productivity of the organization as well (Zhou 2015). Thomas Cook tries to implement different positive strategies in their organization that will help them in gaining competitive advantage in the market. The respective company tries to reward them with financial and non-financial system wherein this has huge positive impact on employees and the sales of the company have been increased largely (Shabanova et al. 2015).

Furthermore, the shareholders are the essential assets of Thomas Cook PLC wherein they are the ones who decide the outcome of the business and they have a huge role to play in the decisions of the business activities as well (Hampel and Tracey 2017). Thomas Cook takes proper care of the shareholders of their business, as they are the ones who control the business entirely. It is the entire duty and responsibility of Thomas Cook to check whether the shareholders are unhappy or happy with the tasks performed by them as business cannot ignore their customers, as they will help the company in increasing their sales and productivity (Kotler 2015).

The shareholders of Thomas Cook finance the company and raise funds through different private placements in an effective manner. The shareholders at Thomas Cook play both direct and indirect roles in the different operations of the company in an effective manner. The different shareholders of Thomas Cook provide suggestions and feedback for the different development of the products in an effective manner as this has provided different kind of opportunities to the company in maintaining less turnover rate of employees in the organization in an effective manner (Hollensen 2015).

Public

The other members in the public are essential assets of Thomas Cook as well as the satisfaction of the customers play a major role in the organization. Thomas Cook plays a major role in satisfying the different needs and requirements of the customers by analyzing their issues relating to the different products and services delivered by them. Thomas Cook has helped in increasing the revenues and reducing the churn rate of the company by implementing strategies and opening a separate department wherein all the queries of the customers are taken care off in an effective manner (Heise, Crisan and Theuvsen 2015).

PESTLE Analysis of Thomas Cook PLC

The customer relation management of Thomas Cook is interesting in nature as this helped them in generating huge revenues and they are the second highest in terms of revenues in the entire market as well. The public relations have huge importance in the effectiveness of organization, as this will help in understanding the tastes and preferences of the customers in an effective manner. With the help of feedback forms, it will be helpful in understanding the different preferences of the customers in an easier manner. The public relation is not free kind of advertising as this takes lot of efforts and this will require concerning relating to the different needs in an effectual manner (Ho 2014).

A PESTLE analysis is defined as the framework that is used by different marketers as to monitor and analyze the macro environmental factors that can create impact on the organizations. The main result will be used to identify the different weaknesses and threats that are used in the SWOT analysis. The PESTLE analysis stands for Political, Economic, Social, Technological, Legal and Economic factors in an effective manner (Aithal 2016).

There are different purposes of conducting the PESTLE analysis in different business organizations that includes when there is a requirement for expanding the business in the entire global market. With the help of PESTLE analysis, the different assessment of the competitors, assessment of the perspective market and the standpoint for the perspective market has to be analyzed in an effective manner. The main purpose is to identify the different factors that will affect the change along with the deliverables that can influence the supply and demand levels along with the costs of production factors (Fountoulaki,  Leue and Jung 2015).

Figure 4: PESTLE analysis

(Source: Zhu et al. 2015)

The technique of PESTLE analysis helps in clarifying the requirement of change and identifies the different options that are potential in nature. PESTLE analysis help in providing simple along with easy to use framework for the analysis that involves the different cross-functional expertise and skills. The PESTLE analysis will help in reducing impact along with effects of potential threats to the organization and it helps in encouraging the development of strategic thinking within the organization in an effectual manner (Zhu et al. 2015).

Furthermore, the PESTLE analysis will help in providing mechanism that will help in enabling the organization as to identify and exploit the different opportunities that are new in nature. It enables to assess the different implications of entering into the new markets both globally and nationally. The main objective of the PESTLE analysis is to ensure that it is easily identified that the different essential implications of the PESTLE analysis can be observed in the organization in an effectual manner. In order to maximize the different benefits of the PESTLE analysis, it has to be used in an effective manner on a daily basis as this will enable to identify the different trends in the market.

Conclusion

Political factors determine the actual extent wherein the government can influence the industry in an effective manner and political factors include the fiscal policy, trade tariffs as well.
Economic factors are the actual determinants of the performance of the economy that can directly affect the company and they create long-term effects.

Social factors include scrutinizing the social environment of the entire market and this includes the different determinants such as demographics, analytics of the population.
Technological factors include the pertaining to the innovations in the technology that will affect the different operations of the market that can be favorable or unfavorable in nature.
Legal factors include both the internal and external sides wherein there are few laws that can affect the business environment (Smith, Rees and Murray 2016).

Environmental factors include the different factors that can influence the surrounding environment in an effectual manner.

Political factors play significant role in determining the different factors that can have huge impact on the long-term profitability of the respective company named Thomas Cook Plc in certain market or country. Thomas Cook is operating in the leisure and travel in more than 12 countries and it has exposed itself into different kind of political and environmental system risks. Thomas Cook needs to analyze the factors closely before investing or entering in a certain kind of market that are as follows:

• Political importance and stability of the leisure and travel sector in the economy of the country (Smith, Rees and Murray 2016)
• Different regulations tariffs of trade related to the different consumer services
• Labeling of product and other requirements in the travel and leisure
• Mandatory kind of benefits provided to the employees
• Interference and bureaucracy in the leisure and travel industry by different regulations of the government
• Antitrust laws related to leisure and travel along with the regulations of pricing that will help in analyzing the industrial regulations on safety

Economic factors wherein the macro environment include different kind of factors such as rate of inflation, rate of savings, interest and foreign exchange rate that will help in determining the aggregate investment and demand in the economy. On the other hand, the micro environmental factors that include the competition norms that have huge impact on the competitive advantage of the company, Thomas Cook need to use the economic factors of country that include the growth rate and economic indicators such as the spending of the customers in an effective manner. The economic factors that have to be considered by Thomas Cook while conducting the PESTLE analysis are as follows:

• The type of the economic system in different countries of operation as to understand the rate of stability of the economic system
• The intervention of the government in free market that is related to the consumer services
• The rate of exchange and the stability of the currency of the host country
• Quality of the infrastructure in the travel and tourism industry
• Inflation and interest rates in the market
• Rate of the unemployment along with level of skill of workforce in the travel and tourism industry
• Analyze the comparative advantages of the host country along with sector of consumer services in the respective country
• Economic growth rate

Social factors can create huge impact on the culture of the society and the way of performing things that can affect culture of the organization in an effectual manner. The attitudes and shared beliefs of the entire population play a huge role in the analyzing the role of marketers in Thomas Cook relating to designing of message of marketing for travel and tourism industry. The different social factors that the leadership of Thomas Cook has to analyze for the PESTLE analysis are as follows:

• Skill level and demographics of population
• Power, class and hierarchy structure in the entire society
• Level of education along with standard in Thomas Cook industry
• Culture (social conventions and gender roles) has to be analyzed in an effective manner
• Leisure interests (Chernev 2018)

Technological factors can affect the Thomas Cook Group Plc wherein technology is disrupting the different industries across the board. Transportation industry is one such industry that can be used as the illustration wherein it is going fast forward. A firm needs to analyze the different technological advancements in an effective manner, as this will help in coping with speed of technological disruption. The analysis of technology helps in understanding the different impacts such as:

• The recent technological developments that has been done by the competitors of Thomas Cook Plc
• Impact of the technology on the offerings of the product
• Impact on the structure of cost of the leisure and travel industry (Chernev 2018)
• Rate of diffusion in technology of the travel and tourism industry

Legal factors can have huge impact on the Thomas Cook Plc wherein in different countries, the legal framework along with institutions is not robust in nature and this cannot protect the intellectual property rights of the organization. Thomas Cook Plc leadership should consider the entering into new market is as follows:

• Anti-trust law in travel and tourism industry along with in different countries
• Health and safety law
• E-commerce and protection of consumers
• Employment law
• Intellectual property and copyrights along with discrimination law

Environmental factors include that there are various markets have different kind of norms that can influence the entire profitability of the organization in such markets. Before entering into a new market, the duty of the new firm is to evaluate the different kind of environmental standards that is required in such markets. The environmental factors that have to be considered by Thomas Cook are as follows:

• Climate change along with weather
• Waste management in the consumer services sector
• Endangered species
• Laws regulating the pollution in the environment
• Attitudes towards along with support for the renewable energy

For instances- There are different examples of the PESTLE analysis in the industry that are as follows:

In United States, both Texas and Florida have different clauses of liability in case of mishaps along with environmental disasters. From this example, it can be analyzed that the companies need to analyze the weather of the place along with analysis of the laws relating to the environmental safety.

In different countries, the legal factors vary from one another wherein the discrimination law has been implemented in the different companies in United States. The health and safety laws is mandatory in all the companies in The United States and this is creating positive impact on the employees as they perform well as they feel they are valued in the respective organization.

Conclusion 

Therefore, it can be concluded that Thomas Cook is one of the most successful travel agencies that helps in meeting the different requirements of the customers. With the help of PESTLE analysis, it has been analyzed that Thomas Cook has different kind of issues that can be faced by them in comparison to other competitors in the entire market. Thomas Cook needs to analyze the different changes in the market as this helped them in achieving the trust and avoid problems that can hamper their reputation in the entire competitive market. It has been analyzed that there are different competitors in the market of Thomas Cook, however Thomas Cook is performing best in the industry and it is the best travel groups in the entire competitive market.

References

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