Global Tourism Strategy: Framework and Long-Term Objectives by Rapid Assignment Help
Globalisation can be defined as the speedup exchange and movement of goods, human beings, capital, cultural practices, technologies and services. The major effects of the globalisation are its increases and endorse interactions among the different populations and regions around the globe. Also this can be defined as the enhancement in interdependence and interconnectedness of the countries and people. It particularly understood to involve two inter related aspects: opening the international broader to boost fast flow of services, goods, ideas and people. The global tourism refers to the different activities of people who are staying and travelling in the different region and countries around the world for business, leisure and other purposes. Global strategy is kind of strategy which organization develops to expand into global market. A tourism strategy is tactical plan which is implemented by the organizations with the intention of promoting and developing their destination. Global tourism strategy means to provide the framework for mobilisation of resources in order to recognise long term national objectives.
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The chosen organization is Touristik Union International (TUI), it is the German leisure, travel and tourism organization and one of the largest company on the globe, TUI is acronym for Touristic Union international. The organization has been known as the preussag AG until 1997 when it has changed from mining to tourism organization. This has been headquartered in the Hanover, Germany and famous among the all tourists. The organization was founded in the 1923 within berlin, Germany As it is PreBsiche Bergwerk und Hutten- Aktiengesellschaft operating within the industrial sector. In the year 1959, this has been listed in the Frankfurt stock exchange after that in year 1964 it was renamed as the Preussag. The main journey of TUI has begun in year 1968 December when the different German tour operators joined the Touristik Union international forces. The report will focus on the defining the strategy and offering the brief history of the strategy. It will shed light on the strategic management and strategy of tourism organization. Furthermore, this will emphasises on organizational strategy, strategic option, corporate strategy and strategic decision making.
Strategy particularly includes setting the priorities and goals, regulate the effective actions to achieve the goals and assembling the resources to perform the actions. A strategy can be defined as the how ends (goals) would be gained by the means (resources). It is the intelligent allocation of the different resources via a unique system of different activities to gain the goals or objectives. The strategy word has its own roots in the welfare, this is the Greek verb which means “army leader” and this is idea of stratego (from it we got the word strategy).
The Strategy is refers to the beating an opponent by the utilising the resources. The strategy word is an elected general within the ancient Athens. The strategoi was majorly military leaders with the combination of military and political authority. The “Global strategy” is kind of strategy which organization can develop to expand into the global market. The main aim of developing the effective global strategy is to boost the sales across the world. Strategic management can include implementing and developing the plans to help company to achieve the objectives and goals (Rothaermel 2019). The procedure may include planning organizational structure, formulating strategy, resource allocation, controlling resources or processes and leading the change initiatives. The strategic planning includes choosing best strategy, identifying the different business challenges, doing the adjustments to implement the strategy to boost performance and monitoring progress. Strategic management happens within the broader organizations which can be applied at the team level or department.
Strategy of TUI: The tourism is one of the largest economic sectors on the global bases and this also provides a paramount contribution in prosperity and development. TUI is leveraging its presence and experience in various vacation destinations for developing the sustainable transformation within the tour and travel. Along with the partner, TUI is focusing on strengthening the positive impacts of tourisms for the people who are local, demonstrating on the creating the experiences which are sustainable and authentic, decrease the environmental footprint. With the effective publication of the sustainability agenda, the organization has unveiled the ambitious targets; these are regularly reviewed and validated by the SBTi (Independent science based targets initiative). The organization aims to decrease the its airline emissions intensity as per the each passenger by the 24%, this is one of absolute emissions from the each cruise by 27.5% and emission direct from the resorts and hotels by 46.2% from the year 2019 (TUI strategy, 2023). The organization has committed to gain the net-zero emission by the year 2050.
Strategic management of TUI: The strategic management of TUI is defined across the airlines, market business divisions and holiday experiences. This is entrenched onto the central consumer ecosystem which is mainly underpinned by the people and sustainability agenda. This is emphases on rolling out the international or global platform for capturing the consumer lifetime value. The strategic management of TUI is focusing on the developing various kinds of strategic decisions for developing effective strategies which may help in leading the firm towards the goals and objectives (Peng, 2022). This includes the implementing, cross functional decisions and formulating. The strategic management is align with the different and effective strategies. The mission statement of organization showcases that TUI is demonstrating on the developing unforgettable moments for the different consumers across the globe and making sure their dreams come true. For this strategic management they are increasing on-going development in the services for leading organization towards the goals and missions. The effective strategies of TUI are developed for fulfilling the needs of each stakeholder in the appropriate manner or method. The organization is particularly operating in the consumer centric industry and the workers are contact with the consumers because the strategic management of organization focused on the workers. The strategic management plan of the TUI is mainly align with the strategic goals which are important for the organization.
An organizational strategy is kind of strategic planning which generally advanced by the leadership team detailing about how business will allocate resources (Such as time, funding and inventory) to offer support to the organizational activities. TUI mainly focuses on the different organizational strategies such as corporate strategy, strategic process, strategic options and strategic decision making.
Corporate strategy: This is overarching plan which mainly directs for the overall scope and long term goals of the organization and guiding interactions through the different market and segments (Boone et al, 2019). For TUI, it is one of the leading organizations among all tourism organizations overall the world, the corporate strategy can rotate around nourishing leadership market by offering the diverse services, utilising the technological advancement and expanding within the novel market (TUI, 2023). The strategy is related to managing the profitability and gaining the sustainable growth by incorporating social, environmental and authority (ESG) aspects within the effective operations. The corporate strategy of TUI is developed by the need to respond to the changing market, this may include enhancement in needs of digitalisation within the travel services and customisation offering.
Strategic processes: This refers to framework and methods which an organization can develop to implement and formulate the strategies. Within TUI, the procedures include rigorous and systematic market analysis, scenarios planning and competitor benchmarking to respond and anticipate the external changes. Effective strategic processes at TUI, majorly entrenched within the organizational culture and aligning with the corporate goals, operational activities. The main strategic process within the organization is related to the approach of acquisitions and mergers (M&A). Organization has utilised Mergers and Acquisitions to enter within the novel market and also enhance the existing position (Johnson et al, 2020). For instance, Acquisitions of TUI are the smaller airlines and travel agencies which permitted to provide combined service portfolio, extending the bookings for the efficient destination management.
Strategic options: These are various ways a company may take to gain the long term objectives. The strategic options of TUI are aligned with the market expansion, service diversification and effective digital transformation.
Diversification: The strategic option of TUI to enhance the diversify portfolio which includes expanding the service and product offering away from the different traditional packages. It may involve investing within the novel and effective travel experiences like as eco-friendly holidays, adventure tourism, providing the sustainable tourism options.
Market expansion: The TUI is exploring the novel and different markets to increasing the expansion with the global footprint (Henry, 2021). The organization is entering within the Latin American and Asian market in which the demand of middle class travelling is on boom.
Digital transformation: This is one of the major TUI’s strategic options; the organization is regularly investing in the technology to boost the operational efficiency, consumer experience and initiative the innovation.
Strategic decision making: This is a procedure for selecting and identifying the best method to achieve the objectives or goals. For TUI, The effective strategic decision making mainly developed by the market trends, data drive insight and consumer preferences. The process of decision making is mainly considered by smooth top down approach, in this, management is important in directing strategies of organization (Mintzberg et al, 2020). The organization is observing the external and internal environment which can be helpful in identifying the threats and opportunities. The organization mainly focuses on the depth analyses which can include tools such as PESTEL and SWOT.
Importance to TUI: The strategic processes, corporate strategy, strategic decision making and strategic options plays an important role in success of TUI (Fuertes et al, 2020). These different aspects permit the organization to navigate dynamic and complex tourism industry, be in competition and respond to market shifts. The effective strategic procedures make sure that long term objectives of TUI need to be aligned with the functional, operational activities, the strategic options offer the flexibility in accepting the challenges and opportunities. Furthermore, the strategic decision making plays an important role in seizing opportunities and managing risk which can increase the profitability and growth. This can include consumer needs, expectation, suppliers, demand, management, owners, clients and activities by technology innovation, government, market trends, social trends and economic changes. By understanding the effective business environment plays an important role in tourism organization such as TUI. This permits the organization to adapt strategies, anticipate changes and also manage the competitive edge within the internal or global market.
Business environment: This is sum total of internal and external factors which can influence the business. The factors may involve PESTEL, political, economic, social, legal and environmental and SWOT analysis such as strengths, weaknesses, opportunities and threats.
Internal environment analysis of TUI: Within the internal environment it includes the different aspects which are within the control of organization. For TUI, this involves operational capabilities, resources, organizational culture and internal processes. The different elements like as company policies, leadership style, technological infrastructure and employee are the part of internal environment.
SWOT analysis
| Strengths | Weaknesses |
| Market leadership Digital transformation | High fixed costs Seasonality |
| Opportunities | Threats |
| Expansion within the emerging market Technological innovation | Economic uncertainty Regulatory challenges |
Strengths: TUI is one of the largest tourism organization or group; it is having the strong presence world widely. Organizational market leadership offers TUO with brand loyalty, economic scale and vast customer base. The vertically integrated business model of TUI involves cruise ships, hotels, airlines and travel agencies, permits for best control over the operational effectiveness and consumer experiences.
Weaknesses: TUI’s business nature, with the extensive assets such as cruises, ships, hotels, these are mainly in fixed cost, this makes the organization susceptible to demand fluctuation and economic downturns (Ketchen Jr et al, 2020). The business is seasonal, revenue generated proportion at the time of travel seasons can increase the fluctuation in profitability and cash flow.
Opportunities: The organization has the opportunity to expand region presence and tap into the novel market. The demand is increasing related to the sustainable and eco-friendly travel options. The organization can invest in the eco-friendly and sustainable practices.
Threats: Instability in the global economy which can include inflation and recessions, this may decrease the consumer spending and put impact on the revenue (TUI Travel SWOT Analysis, 2023). The tourism industry is majorly competitive along with the existing players and novel entrants which can affect the market share.
External factors of TUI: This refers to as outside aspects of organization which can put impact on the performance. TUI, it may involve competition, technological advancement, regulatory framework, market trends and different socio economic conditions. Various external factors are mainly dynamic and may offer the challenges, opportunities as well. TUI is continually analysed and monitor the factors to work with the strategies.
PESTEL analysis
| Political factors | Economic factors |
| Political stability within the key market such as UK and EU is important for effective operations. The organization needs to direct the government policies on taxation, tourism and labour laws. | The economic downturn may lead to decrease the revenue and consumer spending. As TUI is global operator so it is having the currency risk. The exchange rate fluctuation may put impact on the profitability and operations. |
| Social factors | Technological factors |
| The demand of experience based and customised travelling is increasing. The organization required to adapt the shifting preferences (TUI Travel PESTEL Analysis, 2023). The aging population is increasing; the organization needs to focus on demographic groups with the different options of travel. | The organization is investing in the technological development which may include data analytics and AI. The technological advancement can include online bookings and virtual reality. The organization must on-going innovate to be in competition. |
| Environmental factors | Legal factors |
| The organization is focusing on the sustainable practices. This may involve minimising waste, decrease in carbon emission and increasing sustainable tourism. | TUI needs to comply with the national and international laws which are related to the data privacy, consumer protection and non-compliance may damage the reputation COVID-19 pandemic leads to regulations related to the health and safety for travel and tourism. |
Sustainable strategy: Sustainable tourist development, green technology developments are set of effective and actionable steps which an organization can take to boost the impact on the environment and community. The sustainable strategy can have time to implement but whenever this is done correctly. The approach integrates the economic, social and environmental considerations into the organizational core business strategies. Within the tourism industry, the effective sustainable strategy can includes developing the values for different stakeholders to reduce the negative impacts on the local communities, environment and cultural heritage.
Sustainable strategic development: This refers to the embedding the sustainability procedure into the decision making and strategic planning of the organization. This may include setting the goals which are align with the principles of sustainable development, preserving the natural resources and promoting the social equity (Wolfolds and Siegel 2019). For TUI, the effective sustainable strategic development plays an important role as these put impacts on the consumer satisfaction, organizational reputation and long term visibility.
Drivers of sustainable tourism development within the tourism industry: The different drivers influence the implementation and adoption of the sustainable strategic development within the tourism industry (Barney et al, 2019).
Regulatory pressure: The international organizations and government are enhancing the application of regulations to boost the sustainable tourism. For TUI, agreement with the regulations, this is not only for the legal necessities but for adopting the eco-friendly practices.
Market demand: The consumers are more concern about the sustainable practices within the tourism. The travellers are focusing on sustainable options such as sustainable accommodations, carbon neutral flights and providing support to locals. TUI need to respond to the demand by providing the eco-friendly travel packages.
Corporate social responsibilities: The initiatives of CSR are important in developing the sustainable strategic development (Child et al, 2019). The TUI’s CSR commitment may include taking the accountabilities of social and environmental impacts.
Sustainable strategy of TUI: The sustainable strategy of TUI is focused on commitment to supporting the locals, environmental impacts and increasing responsible travel.
Sustainable tourism products: TUI provided wide range of eco-friendly and sustainable tourism products, this may include eco-friendly excursions and resorts which support the preservation efforts.
Community engagement: The organization is also committed to the providing support to the communities in which this is operating. It may involve local business support, employment opportunities and investing in the development projects.
Achieving the sustainability within TUI: To gain the sustainability goals within TUI, it needs to focus on sustainable practices.
Expanding the programs of carbon offset: The organization may expand the programs of carbon offset by providing the consumers the different option to reduce the carbon emission. This may be possible via collaboration with the different environmental organizations.
Increasing sustainable tourism: TUI may boost the awareness of eco-friendly or sustainable tourism among the consumers by offering the options of sustainable tourism and educating them (World Health Organization, 2020).
Green technology investment: The organization needs to increase investment within the green technology. This may include EVs for transportation and different energy sources for the properties.
Example of global tourism industry: On the global bases, there are different organizations which are leading as the sustainable tourism. For instance, Intrepid travel which is one of the certified corporation, it is meeting the standards of environmental and social performance. The organization provides carbon neutral tours and sustainable tourism options. The other example is Hilton, it has been launched the programs for travel purpose, this mainly emphasise on reducing the environmental footprint and omission by 50 %. The organization is doubling the investment in decreasing the impacts on environment by year 2030. The different examples focus on the increasing trends within the tourism industry by increasing the sustainable strategies.
Strategic Opportunities of TUI
Strategic opportunities are the prediction of future scenarios that allow the companies to minimize their weaknesses and leverage strengths. Having the strategic opportunities are beneficial for the companies because it helps in gaining competitive advantage over competitors and improve brand reputation which ultimately positively impacts on the overall efficiency and business operation (Hofmeester and Eyers, 2023). Strategic opportunities help the organizations to increase efficiency, achieving goals and objectives as well as develop brand image in the competitive market. In addition, for the growth and development, it is crucial for TUI to implement various strategic opportunities. TUI will have strategic opportunity of growing market share to develop the position in the market. Tourism is highly competitive sector so this opportunity will assist it to operate the business operation at higher scale and increase profitability. On the other hand, another strategic opportunity for TUI is sustainability. In current business environment, most of tourism companies are emphasis on sustainability in order to protect the environment and safeguard the health and well-being of the people. TUI committed to help the planet in order to protect the environment by getting purge of plastic straws to collaborating with the local communities.
Strategic issues or challenges of TUI
Apart from this, strategic issues or challenges refer to major difficulties and obstacles that are face by the companies at the time of accomplish long-term goals and objectives. The strategic issues can arise due to several internal and external elements and need careful decision-making and planning to mitigate. Strategic issues have significant impact on the overall operation and process which leads to reduce profitability and efficiency (Adama and Okeke, 2024). With the opportunities, TUI is also facing wide range of strategic issues that directly impacts its overall efficacy and operation. The strategic issues of TUI encompass internal and external challenges. Along with this, internal challenges of TUI is consisting of human resource management, adopting to technological changes etc., while external challenges includes market competition, regulatory compliance and expectations and sustainability. The HR manager of TUI is facing the issue of recruiting and retaining the talent for long duration which directly impacts the overall operation and efficiency. TUI is operating its business operation in highly competitive market and it face issues of increasing market share and attracting tourists due to huge number of tourists.
Competitive advantage and competitor analysis
Apart from this, competitive advantage facilitates organizations to perform better performance in comparison to its rivalries. Gaining the competitive advantage is important for the companies because it aids in attract more customers, maintain brand loyalty, contribute to higher profit margins and increase profitability (Farida and Setiawan, 2022). For gaining the competitive advantage, TUI is also emphasis on providing high and better quality of tourism services to the tourists in order to improve their experience and increase satisfaction. Along with this, competitor analysis is assessment of strengths and weaknesses of rivalries. For gaining competitive advantage and increase market share, most of the companies are conducting competitor analysis in which they determine strongest rivalries and their strengths (Kliestik et al, 2020). Competitor analysis is important because it helps in developing marketing strategies, capitalize weaknesses and make informed decisions. Marriott, Hilton etc., are the biggest competitors of TUI and it use Porter’s five forces model to analysis their strategies.
|
Forces |
Impact |
|
Threats of new entrants |
High |
|
Bargaining power of buyers |
High |
|
Bargaining power of suppliers |
Low |
|
Threat of substitutes |
High |
|
Competitive rivalry |
High |
From the competitors analysis it has been determine that, TUI has intense competition level from which they face various challenges and directly impacts its operation. The threat of new entrants for organizations in the tourism sector is high because of requirements of huge investments and resources. In addition, the bargaining power of suppliers is low for TUI because it has its own suppliers. The bargaining power of customers is high within tourism sector because they have option to switch towards other competitors with low switching costs. Furthermore, the threats of substitute are high because of huge number of TUI’s competitors which provides similar services to them. Moreover, the competition level for TUI is high within tourism sector because of accessibility of large number of competitors in the market.
9 Years | EdD
Conclusion
In the end it has been concluded that, TUI is significantly emphasis on strategic management which helps it to gain competitive advantage and increase market share in the market. Having strategic management can be beneficial for tourism companies because it aids in enhance decision making and increase effectiveness. The strategic management of chosen business is emphasis on building several types of strategic decisions for strategies which helps in accomplishing desired goals and objectives. For gaining competitive edge over rivalries, the selected business is also adopting strategic options such as market expansion, diversification, digital transformation and strategic decision making. The chosen organization also has strategic opportunities of growing market share and sustainability. The strategic issues of TUI can be external and internal which encompasses recruitment and retention of talent, adopting of technological changes, high market competition etc. The strategic challenges impacts adversely in the overall functions and process which leads to reduce profitability. Along with this for conducting competitor analysis, TUI also use Porter’s five forces model.
Recommendations
Following recommendations are mentioned below for TUI in order to implementation of plan and future strategy.
References
Books and journals
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