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Strategic Management at TUI Travel Plc - Case Study Example

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This report looks into the strategic management of TUI Travel Plc and the respective package tourism industry. The paper has used various industry analysis models such as PESTLE and Porter’s five forces model to have more insight of the respective sector…
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Strategic Management at TUI Travel Plc
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Download file to see previous pages The company is one of the big names in the industry with more than 30 million customers in some 27 key source markets.TUI Travel is connected with 200 brands consisting market leading mainstream brands as well as specialist travel businesses. The organization operates in four significant sectors including Mainstream, Accommodation & Destinations, Specialist & Activity, and Emerging Markets. With this wide range of services, TUI Travel offers its customers to fetch the experience of differentiated and flexible travel experiences in compliance to their changing requirements. This global company has its base in the UK with around 50,000 people employed worldwide. The company enjoys the admiration of being only leisure travel company getting listed on the London Stock Exchange; it is a significant entity of FTSE 100 index (TUI Travel, 2010).
The package tour industry demands a high amount of capital investment. High capital requirement creates a high entry barrier for the new entrants in this industry. The leading companies in this industry control a major portion of the market share. This has reduced the possibility of price retaliation and maintains the economies of scale. These two factors also have emerged as the entry barriers for the new players entering into the industry. Brand recognition is also a significant barrier to the new entrants. As a result, the threat of potential entrants is low in this industry.
The suppliers have moderate bargaining power in this industry. Suppliers have high negotiation power against the companies with low share market. The top market leaders cover a large portion of the market and hence, possess a threat of backward integration. Leading companies like TUI involves vertical integration which can emerge as a threat to the suppliers. ...Download file to see next pagesRead More
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