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APPENDIX-1 PESTEL ANALYSIS P -Terrorism (1) -Political stability (2, 38) -International relations & Foreign policy(14) -State intervention(10) E -Exchange rate(15,16) -Recession (17,16) -Fuel price (18) -Medical tourism (3) -New rising economic area (35,18) S -Religious impact(4) -Sports tourism(5,6) -Media view (20) -Demographic change (21) T -E-commerce (46) -Enhanced security equipments (16) -New fuel, New craft (22) -Substitute (11,23) E -Climate change (45) -Natural disasters(7) -Outbreak of diseases (24) L -Trading law(16) -Restrictions on acquisition &mergers.(26,11) -Safety regulations(25) -Climate change Act(44)

APPENDIX-2 PORTERS FIVE FORCES THREAT OF NEW ENTRANTS (28, 34) LOW *High capital requirement *Economies of scale *Distribution channels *Price retaliation *Strong market presence *Brand image POWER OF SUPPLIERS (8,28) LOW *Suppliers not concentrated *TUI has backward vertical integration *Bulk purchase with low commitment put suppliers in weak position *Low switching costs for TUI POWER OF BUYERS (28,29, 30) LOW *Buyers are not concentrated *Buyers dont have backward vertical integration * TUI products are highly differentiated *TUI offers guaranteed lower price- so low bargaining power COMPETITIVE RIVALRY (28,34,48) HIGH * Profitability reduced * High exit barriers so huge competition from existing rivals * Sales declined compared to competitors *Huge competition from online travel retailers, low cost no frills airlines, lodge hotels SUBSTITUTE (43,11,23) LOW *No realistic alternative of tourism * International tourism market is growing * Road & Train may be Substitute but will increase the cost to buyers

APPENDIX- 3: VALUE CHAIN ANALYSIS SECONDARY ACTIVITIES: Firm infrastructure : Mostly centralised. Synergy effects from brand integration , flexible business model(31) Human resource : Different & flexible training process. Mobility of key staff throughout the group. Direct communications encouraged.(28,49) Technological : Central IT department, Investment on new technology (31,13,42) Procurement : Central Purchasing department in Hanover for key procurements. (31) PRIMARY ACTIVITES: TRANSPORTATIONS *Own airlines IINNNGDGSGH with 150 crafts * Fuel efficient engines *Cruises & Yacht (31, 30) SERVICES ON SITE *Car hire *Excursion services *243 own hotels *Differentiated hotels (28) PACKAGING *New production systems based cost saving software *Differentiated products (28,47) DISTRIBUTION *3500 retail shops *Online sales * Phone sales *Third party tour operator (28,31) MARKETING *TV, newspapers, internet *Social networking (36,37) SERVICES *Qualified representatives, *24 hours dedicated duty office *Satisfaction surveys (28,29)



net profit margin

LOW Market growth rate

Expe dia


? Market in China & India (appendix 7), (28) DOG Hapag Lloyd container line. (31) LOW

Market in Russia Ukraine &Thailand (35,31,40) CASH COW ( European Market) (appendix 7),(48) HIGH

T Cook



Global Market Share


Market share

APPENDIX 6- Ratio Analysis IKEA (18,19,31, 48) Home Depot Inc, The (18,19,34,48) (18,19,48) Lowe's Companies Inc Leroy Merlin Groupe


Base Year 1995

Forecasts 2010 2020

Market Share (%) 1995 2020 100 5.0 18.1 25.4

Average annual growth rate (%) 1995-2020 4.1 5.5 3.8 6.5

(Million) World 565 20 110 81 1006 47 190 195 1561 77 282 397

100 3.6 19.3 14.4

(18,19,48) Africa Sales growth Profit margin Net profit growth Market share (2008) Current ratio Quick ratio Debt/capital ratio -14.3% -3.72% -49% 4.9% 13.49% 0.20% -64.65% 2.3% 0.70% 10.27% 111.89% 2.5% -16.26% Americas 10.63% -21.08% 2.9%
East Asia and the Pacific Europe Middle East South Asia

336 14 4

527 36 11

717 69 19

59.8 2.2 0.7

45.9 4.4 1.2

3.1 6.7 6.2

0.66 0.64 0.67

0.40 0.39 0.415

0.6676 0.6676 0.2456

--0.7915 APPENDIX 8- SWOT ANALYSIS STRENGTHS *Highest global market share of 4.9% *High level of Vertical integration gives economies of scale. *Strong distribution channels *Flexible business model that can react to environmental change *Over 200 brands in different market segments WEAKNESSES * Reported loss of about 1 billion in last two years. * Reliance on European market, overexposure to Sterling and Euro * 43.33% holding on Hapag Lloyd shipping, a constantly loss making business. TUI shared a loss of 14 Million in 2009. * Highly geared capital structure: excessive debt

OPPORTUNITES * International Tourism market is expected to grow rapidly * Investment on new technology like Boeing 787 will generate economic benefit *TUI made 11 successful acquisitions and mergers in 2009 which may benefit the company. Opportunity from emerging markets *Opportunities from pilgrimage and rising medical tourism THREATS *Threat from uncontrollable factors- Terrorism, exchange rate, fuel price * Economic environment remain uncertain *Competition from low cost no frills airlines & lodge hotels *Threat from online travel retailers and huge competition from key rivals *Demographic change in mainstream market, ageing of Europe

APPENDIX 9: ANSOFF MATRIX (Current strategy) New market MARKETDEVELOPMENT * Resume services in Romania (48) *Develop market in India, Russia & China (31) MARKET PENETRATION (31,48) * Focus on online sale *Expanding Cruise services in German speaking countries * Brand integration DIVERSIFICATION ----

APPENDIX 10 - ANSOFF MATRIX (Recommendations) MARKETDEVELOPMENT DIVERSIFICATION * No need for unrelated diversification * Focus on domestic tourism in South Asia, Focus on Road and Rail *Launch no frills airlines * Focus on Pilgrimage and medical tourism PRODUCT DEVELOPMENT * New cheaper hotels *Develop Travel related Financial services

PRODUCT DEVELOPMENT (31) * New high yield differentiated hotels * Develop differentiated products * New low cost destinations

*Develop market in Middle East

Existing market

MARKET PENETRATION * Reward scheme for customers * Increase social networking

Existing product

New product


perceived added value

Hybrid 3 IKEA

Differentiation American express Tui cruises, gulliverstravel (41,31) 4 focused differentiation 5 Hayes & Jarvis (32)


Low price 2


1 Ryainair, easy jet (9) Low

8 Price

7 High

BOOKS 1. 2. 3. Porter M 1998 Competitive Strategy Techniques for Analysis Industries and Competitors Porterm1985 Competitive Advantage Creating and Sustaining Superior Performance New York The Free Press Thompson, AA Strickland AJ & Gamble J 2005. Crafting and Executing Strategy (Fourteenth Edition), McGraw-Hill, New York, pp. C2-C32.

WEBSITES 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 26. 27. 28. 29. 30. 31. 32. 33. 34 35. 36. 37. 40. 43. 44.

4. 2. Henderson, Joan C., 2006. Managing Tourism Crises: Causes, Consequences and Management. Oxford: A Butterworth-Heinemann. Ch.3 3. Bookman, Milica Zarkovic & Bookman., 2007. Medical Tourism in Developing Countries. Karla R. New York: Palgrave Macmillan, 4. Rotherham, Ian D,. 2007. Sustaining Tourism Infrastructures for Religious Tourists and Pilgrims within the UK in Raj, Razaq ed., Morpeth, Nigel D ed. 2007. Religious Tourism and Pilgrimage Festivals Management : An International Perspective. Oxfordshire: CABI Publishing 5. Standeven, Joy,. Knop, Paul de., 1999. Sport tourism. chamaign, IL: Human kinetics 6. Zauhar, John., Kurtzman. 2004. The Future of Sport Tourism: The Perspective of the Sports Tourism International Council in Brent W. Ritchie and Daryl Adair. 2004. Sport Tourism Interrelationships, Impacts and Issues. Clevedon: Channel View Publications 7. Holden, Andew,. 2008. Environment and tourism, 2nd ed. Oxon: Routledge 8. Enz, Cathy A, 2009. Hospitality Strategic Management: Concepts and Cases , 2nd ed. New jersey: John wiley & sons, inc, 9.Johnson, Gerry., Scholes, Kevan., wittington, Richard. 2008. Exploring Corporate Strategy. 8th ed. Essex: Pearson education 10. Kotler, Philip., Bowen, John T,. Makens, James C. 2006. Marketing for hospitality and tourism. 4th ed. New Jersey : Pearson Education Inc. 11. Evans, Nigel., Campbell, David., Stonehouse, George. 2003. Strategic Management for Travel and Tourism. Oxford: Butterworth-Heinemann 12. Cooper, Chris., Fletcher, John. Et al., 1998. Tourism Principles and practice. 2nd ed. Essex: Pearson education ltd

REPORTS AND OTHERS 45.Climate change and tourism: responding to global challenges By World Tourism Organization, United Nations Environment Programme, 2008 46.Impact of E-commerce on Travel and Tourism: An Historical Analysis, International Journal of Management, Dec 2009 by Mamaghani, Farrokh 47.TUI AG : Company Profile by Datamonitor, January 2010 48. TUI AG in travel and tourism by Euromonitor international, January 2010 49. Sunday Times (London, England) Oct 4, 2009, p6. Interview with Peter Long 50.Ameican Express Co in Travel & Tourism, by Euromonitor International February 2010


POLITICAL ENVIRONMENT: 1. TERRORISM There are a lot of political factors involve with tourism industry. Popular tourist spots are increasingly being target of terrorist attacks. According to WTO international tourism arrivals grew steadily till 2000 but didnt grow further due to major terrorist attacks around the world especially in the USA (2001) & Bali (2002). 2. POLITICAL STABILITY Political stability is crucial for the growth of tourism industry. TUI is trying to develop its business in Asian countries where political stability is a matter of concern. Any form of domestic violence will discourage tourists to visit the country as it happened in Thailand during the political riot in 2009. 3. INTERNATIONAL RELATIONS/ FOREIGN POLICY Keeping in mind tourism is the lifeblood of the economies of many countries it is being used not only as an economical tool but also for political means. Many countries discourage its nationals to visit the countries they have poor diplomatic relations. Us state department, Foreig n and Commonwealth office in the UK issues regular warning to their citizens not to visit certain regions. Visa process is usually smooth for the nationals of friendly countries and sometimes no visa is required (e.g., USA & UK). As TUI is the largest tour operator in the Europe it needs monitor diplomatic relations between countries. 4. STATE INTERVENTION ON PRIVATE SECTOR From time to time government of the country will exercise some degree of influence over private sector specially when the government think that the private sector is unlikely to meet national tourism objective. Government normally do so through government agencies e.g. BTA, CAA etc. The degree of influence usually depends on the political philosophy of the government (e.g., conservative, liberal etc). Too much state intervention on private sector is against the norm of European business culture but it is often the case in the Asian and African countries where TUI is trying to develop its market. ECONOMICAL ENVIRONMENT 1. Exchange rate Exchange rate is very influential factor in tourism industry. Exchange rate of the visiting country has an impact on peoples holiday plan. As tourism involves excessive foreign transactions the business is exposed to this risk than any other business. As TUI is operating in different countries the exchange loss on one side should be somewhat offset with gain in another part. However, still the risk is high depending on the size transactions involved.

When pound fell against US dollars in 2009 it discouraged British tourists to go to USA while it attracts more Americans in the UK. 2. Recession Recession hits tourism market seriously. According to UN-WTO international tourism arrivals are estimated to have declined by 4% in 2009. Travel companies face serious liquidity problems as banks stopped lending. 3. Fuel price Fuel price is an issue of concerns for tour operators. Most big tour operators like TUI make significant part of their revenue from long haul flights. Fuel price was blamed for the collapse of XL group, the third largest UK tour operator. 4. Medical Tourism Medical tourism is a growing part of tourism industry. Some developing countries now have world class hospitals where treatment is much cheaper than western countries because of low running costs. According to UNCTAD-WHO study India can offer medical services estimated at around one fifth to one tenth the cost of some developed countries. A heart valve replacement that cost $200,000 in the USA costs only $10,000 in India including return airfare and accommodation. Increasing number of visitors are now travelling to Bangkok and Malaysia to get cheaper treatments. SOCIAL ENVIRONMENT 1. RELIGIOUS VIEW From pre-historic age people from around the world have been travelling for religious purpose. Millions of Roman Catholic make visit to Lourdes, France which id a sacred location. Over 2 million Muslims visit Mecca each year for Hajj. Hajj is a major part of the economy of Saudi- Arabia which worth about $1.5 billion. 2. SPOPRTS TOURISM According to Weed and Bull (1998) sports is the primary purpose of about a quarter of holidays. Barcelona Olympic games generated spending of more than 15 billion. The Germany Govt. Estimated that the overall value to the economy of world cup is around 3 billion Euros. German tourist board (GNTB) expected that it will attract around 5 million additional overnights stays. 3. MEDIA VIEW Media is very powerful tool of Tourism. A vast majority of people choose the destination they have never been before. Most of them are influenced by media news and reports. Media plays an important part to spread the news of the tourist spots that are hit by natural disasters or terrorist attacks. TUI should be concerned about the attitude of media of the countries where it operates (e.g. coverage of tourism programs on TV and news papers) BRAND CONSCIOUSNESS

TECHNOLOGICAL ENVIRONMENT 1. E-commerce E-commerce brought a rapid change on companies structure and operations. A lot of internet based tour operators emerged. Internet started a price war among the tour operators as customers can easily compare prices online. To maintain market leadership TUI is under constant pressure to adopt latest. To attract customers websites must be attractive, user friendly, data must be held securely and transaction process should go smoothly. 2. ENHANCED SECURITY EQUIPMENTS To prevent terrorists attacks on public places scientists have been working to improve security equipments. Body scanners (x-ray) are being introduced in the airports around the world which will have both positive impact (tourists will feel secure) and negative impact (privacy concern). Scientists of Reading university, UK have recently developed intelligent CCTV that can pick up suspicious movements & alerts any potential suspect. 3. NEW FUEL Fuel is a crucial factor for airlines and tourism industry. Many airlines went burst because of high fuel price (XL in the UK, 2008) . Scientists have been working on efficient fuel that will reduce both cost and emission. Virgin Atlantic 747 had a test flight from London to Amsterdam using fuel derived from Brazilian babassu nuts and coconuts. New fuel is still on test but scientists are expecting result soon. If successful, no doubt it will have an impact on tourism industry 4. SUBSTITUTES todays modern world, instead of travelling ,people may like to go for another source of entertainment like TV, video games , polo, horse riding etc To change their environment. So these types of substitutes may attract people which can affect a little bit on tourism industry. (simi)

ENVIRONMENTAL 1. CLIMATE CHANGE Tourism is both a polluter and a victim of climate change. When it comes to carbon emission long haul flights are always the first to be blamed. As most of the revenues of TUI come from long haul flights it is also under pressure from environmental groups. According to TUI customers are increasingly asking about the carbon impact when buying their holidays. 2. Natural disasters Natural disasters like tsunami, floods, and cyclone have long term negative impact on tourism. Some Asian countries are still recovering from the tsunami. Thailand was badly hit by Tsunami which devastated the countrys tourism industry (visitors from only Hong Kong was down by 108,000 in 2005 compare to 2004)

3. OUTBREAK OF DISEASES LEGAL 1. TRADING STANDARDS Tour operators are expected to comply with trading legislations when doing everyday business. Non compliance may lead to fine and suspension of licence. First choice which is now a member of TUI group was fined in 2006. The company was charged with 16 offences. The company advertised holiday on the window cards at a price that never existed or available at higher price. 2. RESTRICTION ON MERGERS AND ACQUISITIONS When a company tries to merge or acquire a rival it may face restriction from the watchdog. In the UK all mergers and acquisitions must be authorised by the Competition Commission who aim to keep the market competitive so that the consumers can get the best possible price. In extreme circumstances the companies may be forced to sell part of its operations. Competition commission ordered BAA to sell three of its UK airports. 3. EUROPEAN AND NATIONAL RESTRICTIONS ON OWNERSHIP In the European countries an air Carrier is permitted to operate airline services only of it is majority owned and effectively controlled by member states of EEA or their nationals. TUI is exposed to this risk as it is listed on the stock market where there is no restriction in place to prevent non EEA nationals to buy its shares. 4. SAFETY REGULATIONS Governments related agency regularly issue and update health and safety regulations to transport businesses. As aviation inv olves high risk, the rules even more strict. In the UK Civil aviation authority regularly monitor health and safety issues with the tour operators. PORTERS 5 FORCES Threat of new entry Tourism is a complex global business that requires high capital, skill and experience to setup and run the business. TUI already made a strong position in the market and enjoying economies of scale because of high volume of sales. Therefore, TUI is able to charge its customers very less which a new comer cant. Another problem a new comer will face is lack of brand image and distribution channels. TUI has over 3500 retail shops to sell its products which is almost impossible for a new business to have. Tourism industry is dominated by few key players, so a new entrant is unlikely to survive the possible price retaliation. As there are a lot of high barriers for a new entrant we can conclude that the threat of new entry is low. THE POWER OF BUYERS TUI customers are not concentrated because most of TUI customers are individual buyers. Even though there is no switching cost for TUI customers, TUIs low price and product differentiation strategy manages to retain its customers. Backward vertical integration doesnt exist with TUI buyers. Even though customers can buy their package components separately it will make their holiday package very expensive. So the power of buyers is low THE POWER OF SUPPLIERS TUI is vertically integrated tourism company. It has its own airlines, hotels etc. So, most of its supplies come from its own brands. However TUI still relies on hotel owners, transport and excursion service providers, and small number of airlines, fuel and beverage suppliers. Some suppliers have forward vertical integration (airlines can sell directly to customers) however TUIs large volume of purchase (e.g., hotel rooms) give TUI high bargaining power and also low switching cost means TUI is in stronger position. So we can say that the power of suppliers is low. THREAT OF SUBSTITUTE Tourism is unlikely to be replaced with any substitutes. Increasing number of people are now spending their time on TV, film, video games, internet therefore they have less time for leisure activities. But these activities can never replace tourism. Increase in Domestic tourism can reduce international tourists. No frills airlines like easy jet, Ryan air can work as a substitute but still the threat is low. COMPETITIVE RIVALRY As the barriers to new entry are high that also makes the exit route difficult (e.g. high fixed costs), that means the existing rivals will do whatever they can to survive. So, they will create huge competition in the market. According to market share TUIs competitors are far behind than TUI. In western Europe TUI has 13.1% market share and its nearest competitor Thomas cook has 5.9% share. In the global market TUI has 4.9% share where its nearest competitor has 3.6% share. Moreover 46% of TUI products in the mainstream market are differentiated (tailored to customers need that is not available to competitors). So there is no immediate high threat from rivals. However, considering the big number of acquisitions that are taking place in the tourism industry, mergers between rivals may pose substantial threat at any time. So we can conclude that threat of competitive rivalry is moderate.

Value chain analysis Primary activities Inbound logistics: Because of backward vertical integration TUI gets most of its supplies from own brands. However TUI works with few suppliers like hotel owners, excursion service provider, and car hire etc. TUI uses its airlines, airport transport, car hire, and hotel rooms to make a complete package. Operations: Tour operators integrate all the supplies and make tourism products and facilitate purchases, by bundling, packaging and promoting principals and making them as an individual package. Outbound logistics: TUI reaches its customers through three channels, direct sales through 3500 retail shops, call centres, and online. It also sells its products to third party tour operators. After the package materials are ready they are put in the integrated system for tour operators, retails shops, call centres and online. Marketing & Sales TUI does its marketing campaign through different channels, TV, newspapers, internet and emails. TUI recently has started using social networking to promote its products and brand image. It has launched a website where users and can share their ideas regarding holiday places. TUI is going to start a marketing campaign in Russia with the slogan anything for your smile Services TUI focuses on providing excellent services to retain its customers. TUI has qualified holiday representatives in the holiday destinations who can help its customers from looking after kids to arranging a trip. It has 24 hours dedicated duty office for relatives of the customers if they want to make emergency contact with someone on holiday. SECONDARY ACTIVITIES PROCUREMENT TUI has central purchasing department in Hanover to ensure best prices and meet its environmental objectives. TUI is very careful in choosing its suppliers to maintain high standard. Quality and sustainability are key issues that TUI takes in to account when choosing suppliers. TECHNOLOGICAL DEVELOPMENT TUI has central IT department. TUI info tech is the central tourism IT service provider for the whole group. It has 430 employees. TUI has made significant investment on Boeing 787 and also replacing its old models with more fuel efficient engines. TUI signed a contract in May 2009 with technology & foreign exchange expert, SCL who will provide TUI with new travel money cards. HUMAN RESOURCE People are hired on the basis of individual potential via different training formats like technical seminars, personality and communication management strategies, one-on-one training. As skills and motivation are key aspects of every employee and so personality and bearing as well. FIRM INFRASTRUCTURE TUI tries to control most of its operations (purchasing, IT) centrally to reduce costs and increase efficiency. The risk framework which has been developed and implemented across the Group has been closely linked to the strategic planning process

BCG MATRIX QUESTION MARKS This is the business unit where the market is growing high but TUI doesnt have high market share yet. The best practice is to develop several question marks because not all question marks will be successful. TUIs business unit in China and India falls under this category where the Tourism market is growing rapidly but TUI just started to look in to the business. It will take substantial investments to turn the question marks in to successful business. STARS This is the business unit where TUI has high market share and also the market growth rate is also high. This unit is likely to invest more to cope with market growth. TUIs business in Russia falls under this category where TUI is expecting a market share of 10% in 2010. CASH COW Cash Cow is the business unit where TUI has high market share but the market is already mature or has less growth. TUIs main stream market falls in this category. Most of the TUIs revenue comes from this market which TUI use to support its question marks, stars and dogs.

DOGS Dogs are the business units where TUI has less market share and at the same time the market growth is also declining or static. So there is very less chance for dogs to turn around to cow or question mark. The best way to deal with dogs is to dispose them. TUI container handling business Hapag Lloyd comes under this category. Container handling business came under huge competition from freight companies and the market is declining day by day. TUI already disposed its two third stake of the business.

STRATEGIC CHOICES Ansoff matrix is a very useful tool that summarises the strategic options an organisation is facing. It shows four alternative directions for strategic development. MARKET PENETRATION This is when a business tries to sell its existing products in its existing markets probably through promotional efforts. World tourism market is growing. To keep its market share in line with the growth TUI must build its market share. Online tour operators are taking over traditional tour operators, so TUI must focus on online sales. To increase its market share TUI needs to increase its marketing expenditure. Currently TUI doesnt have any reward schemes f or its customers so TUI customers have no switching cost. A reward scheme will probably help to keep customers. Market penetration is cheapest and less risky choice as fixed costs are almost the same and it already has the knowledge & experience of existing markets. PRODUCT DEVELOPMENT This strategy aims to increase sales by developing new products for existing markets. This strategy is very useful if a company already has good market share and has strong brand reputation in the market like TUI. To keep its market leadership TUI must offer new products to its customers specially where customers demand and taste is cha nging. Recession forced TUI to come out with new low cost destinations like turkey, Israel, Cyprus etc. To continue growth TUI should keep offering new low cost destinations and new tailored packages to meet customers need. 64% of TUI hotels are 4 star which have 75% occupancy. Customers are increasingly choosing low cost hotels for their holiday so TUI should offer new low cost hotels. This strategy has more risk than market penetration because of the cost to develop new products and the new products may not be successful. MARKET DEVELOPMENT This strategy involves finding new markets for existing products. This strategy is based on critical success factors. Companies prefer this strategy when they are relatively big in size and when they identify potential opportunities in the new market. TUI is now focusing on emerging market of India, China, and Russia. TUI is going to resume its operations in Romania from summer 2010. Acquisition and merger is a popular way of market development. This strategy is relatively risky as it involves huge investment and there may be barriers to entry. Achieving competitive advantage may be a challenge. DIVERSIFICATION A strategy that involves introducing new products in the new markets. Diversification is probably the most radical choice of strategy as the organisation is actually moving away from its existing products and existing markets. Diversification could be related to an organisations current operations (vertical integration) or it can be a completely unrelated market.

New market doesnt mean a new country. It can be in the existing country with new market segment (new age group). TUI can team up with hospitals and attract medical tourists in certain locations like India, Thailand, and Malaysia. Millions of people travel every year for pilgrimage and religious reasons. TUI can use its existing knowledge and arrange pilgrimage services most of which is currently done by Middle East tour operators. STRATEGIC CLOCK ANALYSIS Bowmans strategic clock analysis is a useful tool to identify strategies that will help achieving competitive advantage.The strategic clock shows different position in a market where customers have different requirements in terms of price and the value they receive. TUI owns over 200 brands and they can be placed in different positions of the clock. Position 1 and 2 are price based strategy where customers pay low price and receive low value. Travel retailers like TUI are facing threats from low costno frills airlines who position themselves in position 1 and. Ryanair, Easy jet will be in 1 position of the clock. Route 3 is hybrid strategy where company can achieve differentiation but also keeps its cost down. TUI brands like first choice and Thomson will be on this position of the clock as they provide comparatively low cost holidays and provide some differentiated services (e.g. choices on hotels). Vertical integration and high volume of sales keep the cost down. TUI competitor Thomas Cook will be also in this position of the clock. Position 4 of the clock is where a company offers a differentiated product but charge higher prices. American Express is probably on this position as they target corporate customers and offer travel related financial services at higher price. TUI has several brands in this position. For example TUI Cruises will be on this category which target normally German speaking customers and which is now becoming popular. Position 5 is the Focused differentiation that offers high benefit at higher prices. It targets selected market segment or niche. TUI brand Hayes and Jarvis will be in this position which offers luxury long haul holidays at higher price. Customers get full flexible choice over hotels, departure time and location and length of their holidays.

In the strategic clock analysis we have seen that different TUI brands lies in different postion of the clock that helps TUI to target different segments of the market. However one of the drawback of the chosen strategy is TUI didnt have anything in positi on to address the threat of rising no frills low cost airlines. Some TUI airlines like TUI fly and Thomson airways offer cheap air travels but the airlines are used mostly for TUI package holidays.

BIBLIOGRAPHY 1. Hitchcock, Michael & Putra, I Nyoman Darma ., 2007. Tourism, Development and Terrorism in Bali. Hampshire: Ashgate Publishing, Limited 2. 3. Henderson, Joan C., 2006. Managing Tourism Crises: Causes, Consequences and Management. Oxford: A Butterworth-Heinemann Title. Ch.3 4. 5. 6. 7. 8. 9.Medical Tourism in Developing Countries Bookman, Milica Zarkovic (Author) Bookman, Karla R. (Author) Pages: 258 Publisher: Palgrave Macmillan 2007

10. Religious Tourism and Pilgrimage Festivals Management : An International Perspective Raj, Razaq (Editor) Morpeth, Nigel D. (Editor) Pages: 235 , Publisher: CABI Publishing Released: 2007 11. Sport tourism By Joy Standeven, Paul de Knop. [01:19:27] imam arafat: human kinetics, chamaign, IL 1999 12, Sport tourism: interrelationships, impacts and issues By Brent W. Ritchie, Daryl Adair, 2004 13. 14. 15. Impact of E-commerce on Travel and Tourism: An Historical Analysis, International Journal of Management, Dec 2009 by Mamaghani, Farrokh 17. 18. 19. Environment and tourism, By Andrew Holden ch8 , Edition: 2 2008. Routledge, oxon, uk 20. Climate change and tourism: responding to global challenges By World Tourism Organization, United Nations Environment Programme, 2008 24. 25. 26. 27. 28. Hospitality Strategic Management: Concepts and Cases By Cathy A. Enz pp 215, Edition: 2 2009, john wiley & sons, inc, Hoboken, New jersey 29. TUI AG in travel and tourism, by Euromonitor international, January 2010 30. 31. 32. 34. 35. 36. 37. 38. 40. 41. 42.1st Quarter Results 09/10, disclosure presentation.

BIBLIOGRAPHY POLITICAL 1. TERRORISM Hitchcock, Michael & Putra, I Nyoman Darma ., 2007. Tourism, Development and Terrorism in Bali. Hampshire: Ashgate Publishing, Limited 2. POLITICAL STABILITY: Henderson, Joan C., 2006. Managing Tourism Crises: Causes, Consequences and Management. Oxford: A Butterworth-Heinemann Title. Ch.3. 3. INTERNATIONAL RELATIONS & FOREIGN POLICY: 4. STATE INTERVENTION ON PRIVATE SECTOR Tourism: Principles and Practice. 2nd edition. 1993, pp 245. CHRIS COPPER, JOHN FLETCHER, DAVID GILBERT, STEPHEN WANHILL EDITED BY REBECCA SHEPHERD. ESSEX: PEARSON EDUCATION LTD. ECONOMICAL 1. EXCHANGE RATE: 2. Recession: 3. FUEL PRICE 4. Medical Tourism in Developing Countries Bookman, Milica Zarkovic (Author) Bookman, Karla R. (Author) Pages: 258 Publisher: Palgrave Macmillan Released: 2007 Language: en SOCIAL 1. RELIGOUS IMPACT Religious Tourism and Pilgrimage Festivals Management: An International Perspective Raj, Razaq (Editor) Morpeth, Nigel D. (Editor) Pages: 235 Publisher: CABI Publishing Released: 2007 Language: en LC Call Number: BL619.P5 -- R45 2007eb ISBN: 9781845932251 9781845932268 Dewey Decimal Number: 203/.51 2. SPORTS MEDIA brand awareness TECHNOLOGY 1. E-commerce 2. NEW FUEL 3. Enhanced security equipments 4. Substitutes........ ENVIRONMENTAL Natural disaster 2. carbon emission

Legal standard 2. Restriction on mergers and acquisition 3. Health & Safety regulations Department for transport 4. European and national restrictions on share ownership Demographic media and tourism

Types of financial statements

There are three types of financial statements they are, income statement, balance sheet and cash-flow statement:

Bryson and Alston stated a stakeholder is any person group organisation that can place a claim on the organisations attention resources output or that is affected by that output. (Bryson and Alston, 2005 p.65)

Financial statements are used by all the stakeholders of an enterprise. Generally these stakeholders belong to one of two groups: internal users and external users. Internal Users are directly involved with the day-to-day operations of the enterprise while external users are not.
Internal stakeholders

Employees - Employees uses financial statements to make decisions about their long-term commitment to the business. A profitable, growing and financially strong enterprise is more able to attract and keep high-value employees. . Managers - Managers are employed by the board of directors and are charged with the responsibility of managing the business resources in order to achieve the objectives of the enterprise. Financial statements help managers make informed decisions about the efficiency, profitability, production of the enterprise and take strategies to exploit opportunities and mitigate potential threats. Boards of directors - The board of directors sets the objectives and strategic direction for the business and who engage managers to achieve them. Financial statements allow the board of directors to review how successful the management was in achieving the objectives. External stakeholders Investors - Investors are stakeholders that buy shares in a company.. Existing investors use financial statement to evaluate the performance of company. Prospective investors use financial statements to decide whether or not to invest in the company. Lenders - Lenders are those who supply funds to the enterprise on short and/or long-term basis. The ratios they use are current ratio, quick ratio, interest cover ratio. Financial Institutions use financial statements to decide whether to give a company with fresh working capital or extend debt securities. Suppliers and customers - Suppliers provide products and services to the company and allows them to pay for the goods and services at a later time. they use the financial statements to check the creditworthiness of the business. Government departments and agencies - Government department and agencies regulates the way companies conduct their business. They use financial statements to ascertain the taxes and other duties declared and paid by a company