TUI travels free essay sample

TUI Travels Plc is one of the world’s leading leisure travel companies with over 250 of the best loved and market leading travel brands in 180 countries and more than 30 million customers. Question 1 Value Chain Value chain analysis is the process in which a firm identifies its primary as well as secondary activities that add value to the final products or service. Primary activities. Inbound logistics – TUI Travels Plc has a global supply chain which helps it by providing packaged or all inclusive and preplanned holidays for the customers. Usually these suppliers are the hotels that provide services such as for accommodations and meals, as well as airlines that provide transport to and from destinations. TUI will choose the most affordable from its chain of suppliers. Customers prefer using travel agencies since they attract very good prices compared to a do-it-yourself holiday. Operations – This is the process of turning the inputs into the outputs. This stage will involve TUI travels taking up the services and agreeing terms with the suppliers in order to put forward their offers for the customers. The standard package would usually consist of air transportation, both outbound and inbound, hotel accommodations, transfers from airport to hotels and back and other items such as insurance, meals and excursions. Outbound logistics – This is the process which involves provide the holiday packages to the customers. TUI travels does this with the help of travel agents. TUI acquired and merged with First Choice, the 5th biggest tour operator. This helped TUI travels win more customers. Marketing and sales – this is a stage in which TUI Travels Plc makes its customers aware of the services it provides and avail it to them. This is basically done through advertising. TUI travels offers online distribution of its services which improves the proportion of direct distribution and hence understanding the customers better. It aims at being an online provider and make it easy for its customers and reach a larger number to increase its sales Services – TUI provides services such as transportations back home from holiday destinations to its customers and maintain the purpose of being qualitative. TUI travels was also Europe’s largest holiday hotelier providing accommodation to its customers as well as meals. Secondary Activities. Procurement – TUI travels maintains supplier relationships by Co-operative working and ensures high standards of health and safety are attained not forgetting the quality. Technology TUI travels plc provide websites which includes all the information about the company, it also allows for services such as online booking which makes it easy for its customers. It also uses the innovative new split scimitar winglet system on their aircraft which reduces fuel burns and emissions. Customers are provided with new digital tools and services to make it easier to book activities, access information and for contact purposes during their vacations. TUI also introduce the first airline in which you travel paperless by providing boarding passes and tickets digitally, which makes boarding and check-in easier for the customers. Human Resource Management – this stage is concerned with the recruiting, managing, training, developing and reward people within the firm. The group currently employs 50,000 members as its staff. Firm Infrastructure – this is basically the structure of the organization. TUI travels plc is organized and managed through four main business sectors which are accommodations and destinations, specialist activities, mainstream and emerging markets. Question 1. 2 VRIO Analysis. The VRIO analysis is carried out to determine the competitive potential of an organization’s resources and capabilities. This acronym stands for; Value, Rarity, Inimitability and Organization. To gain sustainable advantage TUI has to provide services that have Value, are rare, costly to imitate and the organization is flexed in a way to exploit these resources in the most effective way. Value – This refers to the capabilities of the organization that yield out acceptable levels of return which in turn help the organization to maintain a competitive advantage. For TUI travels, the brands (Nouelles Frontieres 1-2 Fly, Gebeco, Robinson, and Thomson) Offer essential value to the customers which offer it a great competitive advantage in the market against its rivals.. TUI travels plc also owns fixed assets worth of $11 billion as well as 50,000 employees which indicates great value of the organization in terms of financial stability and skilled labour force. TUI also provides low cost services such as the low coast airline services (Hapag Lloyd Express) to its customers which are affordable and also offer great value. This is because as tour operators, TUI is able to get very good prices for the vacationer compared to the customers doing it by themselves. Rarity – these are capabilities that are unique and which meet the customer needs. TUI travels posses such a rare capability in the form of Cruise line services. No other tour operator meanwhile provides this type of service to its customers. The brand names it offers also provide it with a competitive advantage since no other tour operator offers such brands. Inimitability – these refers to those capabilities that competitors find difficult or impossible to obtain. TUI travels plc’s brands attain such capabilities since they are difficult to imitate, this may be due to the patent rights. The managers and the CEO may also be the inimitable capability of TUI Travels plc since they have their own knowledge that is used to run the organization which other competitors cannot obtain. Organization – this refers to the internal structure of the firm. In order to gain competitive advantage, TUI Travels plc needs to share the knowledge effectively. Question 1. 3 – Partial SWOT analysis. A SWOT analysis is carried out to determine the weaknesses and threats of the organization and turning them into strengths and opportunities. This essay carries out the partial SWOT analysis to determine strengths and weaknesses of TUI travels plc. Strengths – TUI’s main strength is that it is the largest tour operator in Europe, which also indicated that it generates a hire market share compared to its rivals. TUI offered security and good value for the vacationer as a tour operators are able to get very good prices compared to a do it yourself holiday. TUI has 30 million satisfied customers. TUI has a turnover of more than 16 billion Euros per year. The company employs more than 54,000 qualified staff with a low staff turnover and owns fixed assets worth $11 bn. In 2008, TUI was the market leader in the tourism industry in Europe. Operated in various countries to penetrate different markets and gain more customers due to its merger and acquisitions strategy. It owned about 4000 travel agencies in 20 different countries with very strong presence in Germany, Great Britain, Netherlands and Belgium. Its brand names such as Nouelles Frontieres 1-2 Fly, Gebeco, Robinson, and Thomson were not only selling full packaged deals but also individual components. It also owned aircrafts controlling various airlines Its huge supplier chain enables it to gain deals for its customers at the best possible prices. TUI adapts all innovative technologies and offers the same technologies to better the customer experience in transacting with TUI Weaknesses – The airlines departed and returned on the fixed dates which might not be flexible for customers planning to travel for less or more days than the fixed duration of stay. Indirect competition faced through online channels and suppliers who provide both accommodations and transportation. TUI needs to keep up to date with the everyday changing technology in order to be competitive against the online agencies. Question 2 The Strategic Clock The strategic clock is a tool used to determine the competitive advantage an organization gains by considering two main factors, which is price of the product and the perceived product/service benefit. According to TUI Travels Plc, the strategy undertaken is â€Å"differentiation†, which is the fourth level in the Bowman’s Strategic Clock. Differentiation refers to offering customers distinctive and unique services which are of high value and cost effective with the aim of increase market share for the company. This is because, TUI travels Plc strives to provide services which offer high value and are also affordable. Some of the services they provide include; affordable all inclusive holiday packages, transportation to and from destinations. Question 2 – how the internal resources match the strategy persuade. The internal resources of an organization are made up of the unique resources and core competences. TUI travels plc has been able to maintain competitive advantage by the help of its internal resources. This also helps it maintain its market position in the different market segments that it operates in. Some of the resources are: Over 54,000 employees who provide skill and co-ordination. The vast amount of assets 4000 travel agencies over 20 countries Cruise liner services and chains of hotels.