Identify and explain the main political, economic and social factors that are likely to affect Thomas Cook plc.
Political factors that may affect Thomas Cook plc may include civil unrest for example in Syria. This may affect Thomas Cook as their sales may decrease due to the lack of interest in visiting that country in turn giving low profits. Thomas Cook could be affected in the same way by the introduction of terrorist attacks, potentially facing a decrease in sales and even flights taking place. Another political factor that Thomas Cook may be affected by are health and safety regulations as they may have to situate capital into further health and safety precautions which could potentially lead to high expenses for the company. Government intervention is another factor that may affect Thomas Cook, such as the introduction of legislation on emissions produced from planes to be at a set level for a fixed period of time. If taxation were to increase Thomas Cook may be affected due to the evident increase on income tax and so they may now receive less profit then they had previously. Thomas Cook may also experience the effects from an increase in Corporation tax. Both cases of tax increases possibly leaving them with less profit and less capital to use for other aspects of the business such as expansion. An economic factor that may affect Thomas Cook plc is inflationary factors such as the price of oil to increase significantly. Due to Thomas Cook’s necessity of the product oil to their business, they will continue to purchase it and abide with the expenses involved. However, this may leave them with less capital inhibiting the ability for growth within the company. Also, the recession may affect Thomas Cook plc significantly due to the loss of jobs and rising and falling income. This would affect Thomas Cook as due to loss of jobs, people may have less disposable income and so will not be spending money on holidays, they are more likely to spend money on...
Please join StudyMode to read the full document