Strategic Management
Strategic Management
(6BE003)
Individual Piece
F.A.O: Barry Whitehous
Tariq Al-Qahtani
0715366
BA (Hons) Business Management (Human Resources)
Strategic Management
6BE003
Individual Piece
Due to the financial recession an economic crisis that started in 2007 many businesses from all sectors, governments and individual people where majorly effected. Many businesses have reported devastating results of loss (Mortgage Guide UK, 2008).
Thomas Cook and the UK travel and tourism market as a whole have suffered from this global recession were the total expenditure fell 5.5%. (Keynote)
This is because the recession has caused a dramatic fall in the amount off disposable income that people (customers) have. The average person’s wealth has dropped by £16,000 (The Telegraph, 2010) also the household savings ratio has dropped by roughly a third from 4.8% to 3% so consumers would have less money aside for luxuries such as package holidays (Mintel), (TDX Group).
This drop in disposable income is due to many factors the main one being that has been catastrophic rise in unemployment since 2007, bringing the total of unemployed at 2.45million (BBC news).
(Source: http://www.bbc.co.uk/news/10604117)
Last visited 20th November 2010
The other reason being the rise in cost of oil so Thomas Cook are now having to spend more money on fuelling the planes. This is also affecting consumers, so on top of many already having less disposable income, they’re having to pay more for fuel.
But there are some companies in the travel and tourism sector such as Ryan Air and Easy jet who are the low budget airlines, who have been offering low prices to match the consumer’s pockets. This is having an immense influence on the travel and tourism sector. This is a growing threat to Thomas Cook and has raised the competitive pressure for them. So not to affect their competitive advantage they cut their costs to be more cost affective to protect their profits as Martin Alley the Director, Shared
(6BE003)
Individual Piece
F.A.O: Barry Whitehous
Tariq Al-Qahtani
0715366
BA (Hons) Business Management (Human Resources)
Strategic Management
6BE003
Individual Piece
Due to the financial recession an economic crisis that started in 2007 many businesses from all sectors, governments and individual people where majorly effected. Many businesses have reported devastating results of loss (Mortgage Guide UK, 2008).
Thomas Cook and the UK travel and tourism market as a whole have suffered from this global recession were the total expenditure fell 5.5%. (Keynote)
This is because the recession has caused a dramatic fall in the amount off disposable income that people (customers) have. The average person’s wealth has dropped by £16,000 (The Telegraph, 2010) also the household savings ratio has dropped by roughly a third from 4.8% to 3% so consumers would have less money aside for luxuries such as package holidays (Mintel), (TDX Group).
This drop in disposable income is due to many factors the main one being that has been catastrophic rise in unemployment since 2007, bringing the total of unemployed at 2.45million (BBC news).
(Source: http://www.bbc.co.uk/news/10604117)
Last visited 20th November 2010
The other reason being the rise in cost of oil so Thomas Cook are now having to spend more money on fuelling the planes. This is also affecting consumers, so on top of many already having less disposable income, they’re having to pay more for fuel.
But there are some companies in the travel and tourism sector such as Ryan Air and Easy jet who are the low budget airlines, who have been offering low prices to match the consumer’s pockets. This is having an immense influence on the travel and tourism sector. This is a growing threat to Thomas Cook and has raised the competitive pressure for them. So not to affect their competitive advantage they cut their costs to be more cost affective to protect their profits as Martin Alley the Director, Shared