Management case study - Essay Example

Possible long term strategic plans and/or changes for TUI By ID number (if there is) Number Full Name7 January 2010Restructuring have always been considered headaches for TOP managers in most corporations, because they consume a lot of resources, time and efforts and results are not always satisfying (Vance 2009, p.2). Preussag (ex-smelting and mining European giant) made something even more global than a usual restructuring, so common for big companies in the late 90s. It could completely change the industry it operated in and turned from a loosing profits mining company to one of the leaders in European tourism market.

The decision made was well-thought and appeared to be a big success. By acquiring main players on the European market, Preussag could finally capture more than 30 percent of the European tourism market and was renovated under the new name – TUI Group.Despite some major successes, it its strategy that could be observed in the case study, some additional steps or changes could be made in order to improve it and make final results of the operations even more successful. Firstly, as it was mentioned in the case study the main reason behind consolidation – economy of scale has not yet been reached (Viardot 2007, p. 21). TUI Group made several serious acquisitions in European market and in UK, but they still have rather strong competitors on both markets.

They were able to buy fully the main tour operator in France, but could merge only 30% of their main competitor in UK. In addition, MyTravel, one more UK leading tour operator takes a part of the whole market share. They have succeeded with buying German tour operators, but one more competitor originally from Germany is left, which is ReweTouristik. Therefore, TUI Group could try to expand their presence on the European market by continuing a strategy of merges and acquisitions with their main competitors.

By doing this they will be able to expand their leadership on the market without making significant changes within the company. In addition, they would be able to reach the level of synergy that would help them to establish the economy of scale, so important in the industry. Secondly, despite the major presence in EU, TUI Group could try to expand their operations in Asia. They could try move even further on East, to Japan. Having these great resources behind, experience and knowledge in multicultural operations and a good strategy, they could try to establish TUI Japan for Japan tourists, because Japan is considered to be a very attractive from the outbound tourism prospective country (Japan Tourism Marketing 2009) especially towards other eastern countries such as China, Korea and Hong Kong and Northern America.

Thirdly, TUI Group might think on establishing a special department for operations in Turkey. As Turkey’s tourism market has shown almost the most significant growth for the last period (Viardot 2007, p.19), any company, that want to succeed, might try to expand their operations in inbound tourism to Turkey. As narrow focus is considered to be a widely accepted business strategy (Riddestrale and Nordstrom 2008, p.145), TUI Group might try to go out of trading and shipping business. Its core competence is tourism and 85% of companies’ employees are involved in the sphere, they have a big market share and positive tendency of growth, so they would better to focus on it.

In addition, in times of economic declines the physical assets that are mainly associated with their trading and shipping business still need lots of expenditures and maintenance, so this part of TUI Group business would suffer more severely and would have to recover for the profits of the tourism sector of the company (as it is commonly met in alike holdings).Lastly, TUI Group several times successfully conducted a cost cutting policy and have succeeded in operating virtual direct sales offices (Viardot 2007, p.21), so they could try to put more efforts in becoming a virtual company.

By building reliable information systems to support some ineffective, manual processes, company could decrease the number of staff and therefore reduce costs. In addition, office space would be decreased significantly, so the overall expenditures on staff would decline (Hibbert 2009).ReferencesHibbert, C. (2009) Business cost cutting: the virtual office [online] available from [7 January 2010]Japan Tourism Marketing (2009) Statistics of Japanese Tourists Travelling Abroad [online] available from [7 January 2010]Riddestrale, J.

and Nordstrom, K (2008). Funky Business Forever How to Enjoy Capitalism. New York: Financial Times ManagementVance, D (2009). Corporate Restructuring: From Cause Analysis to Execution. New York: SpringerViardot, E. (2007). TUI: achieving and maintaining leadership in the European tourism industry. Paris: Ceram European Business School