Leader vs Manager

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EUROPEAN TOUR OPERATORS

1. Using the PESTEL tool, what are the key drivers for change of the macro-environment of European tour operators in the first decade of year 2000?

POLITIC

NY 9.11
Bomb attack, terrorist attack (Bali, Djerba)
Cote d’Ivoire conflict 2009
African conflicts 2010 (Egypt, : strikes for independence, Tunisia demonstrations for independence, Marocco : Bomb attack Jemaa-el-Fna Place Security controls at the airport => terrorism attacks

Expansion of European Union 2004 => no border

ECONOMIC

Crisis 2007 to Nowadays
Fuel boom
Credit crunch
Unemployment
Expansion of low cost/budget airlines (Air Asia, Southwest, Ryannair)

SOCIAL

Several weeks of holidays
Packaging holidays, full service (transportation, accommodations, excursions, leisure, meals, insurance)

People are willing to pay more and so not to worry about, just get into the plane and enjoy => convenient

TECHNOLOGICAL

Internet, E business, Online booking
Raise of communication tools

ENVIRONMENTAL

Recycling
Green tourism
Eco minded
Concerned about Nicolas Hulot

LEGAL

Restriction on mergers (European Union)

Keys drivers:

According to the PESTEL analysis, the key drivers for change in the micro environment are first of all, the terrorist attacks and several conflicts around the world. These attacks had decreased the flow of tourism. This events discouraged people to go to certain places or to take the plane. Secondly, the budget per household allocated for the holidays has been reduced because of credit crunch and the economic crisis. Though, people are not willing to spend a lot of money for long and far travels. They would rather stay in their home country, going on holidays more often but not as longer. And finally, the emergence of new low cost tour operators online offering more or less the same service.

For all those reasons the European tour operators has to adapt their strategy. They have to respond to the changes of the macro environment.

Terrorist attacks => decrease tourism attraction

Marketing to the consumer

Conflicts abroad

Economy => budget per household decreased

2. Using PORTER’s 5 force framework, identify the key success factors of the European industry of tour operators at the late year 2000

Bargaining Power of customers: high

Tour operators have to adapt to customers, because of the world crisis their purchasing power decreased, so a major part of them decide to reduce expenses for travels and holidays.

Bargaining power of suppliers: high

The suppliers which have a bargaining power are mainly airlines companies. They can be identified as indirect competitors too. More and more companies are proposing in addition to the travel ticket, packages including hotels and transportation.

Threat of substitute products: low

From the past, people were travelling by their own. They had no other choice. Nowadays, it is still topical but you have 2 main different ways to travel: setting up your own trip or requesting a tour operator. Thanks to the development of the Web, people could travel through their computer or any other screens. But the pleasure of travelling is to discover and realize by yourself what it really is.

Threat of new entrants: low

As we saw in the table 1, the number of competitors/tour operator actors drastically decreased. In 2005 they were 11 actors controlling 60% of the market share, but in 2008 they were only 5 controlling 84% of the market. So it’s quite uneasy for new entrants to find a place in this market, unless to be very innovative.

Competitors: medium

1/ Direct Competition

The rivalty between tour operators is intensive; there are a lot of actors even though this number decreased this last years because of combinations between several actors.

Only two of them are controlling 1/3 of the total market Share: TUI Travel and Thomas Cook. TUI is leader of the market since several...
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