STRATEGIC MANAGEMENT

Presented By: Aditya Kumar Subodh Khedekar Ajay Sasane Sabahur Rahman Drumil Khopkar

61 73 85 97 109

Topic : Travel and Tourism

Presented to: Prof. Shirish Bhakare

INTRODUCTION TO INDUSTRY

Tourism Industry
Travel and Tourism one of the world's largest foreign exchange earner among industries, provides employment directly to millions of people worldwide and indirectly through many associated service industries. Tourism is important and in some cases vital for many countries, such as France, Egypt, Greece, Lebanon, Israel, United States, United Kingdom, Spain, Italy, and Thailand, and many island nations. Tourism in India is the largest service industry, with a contribution of 6.23% to the national GDP and 8.78% of the total employment in India. tourism revenues are expected to surge by 42% from 2007 to 2017. (Source : www.wikipedia.com)

Market size

(Source: www.tourisminindia.com)

Segments
Airlines Attractions/Theme Parks Restaurants Bus/Taxi/Limousine Operators Travel Agents Vehicle Rental Companies Tour Operators Cruise Lines Travel Insurance Hotels/Resorts/Casinos National Tourism Offices Travel Consumer and Market Research Organizations (Source: http://www.travel.travel

Growth Rates
GDP: Total Contribution The total contribution of Travel &Tourism to GDP, including its wider economic impacts, is forecast to rise by 4.2% pa from US$5,991.9bn (9.1% of GDP) in 2011 to US$9,226.9bn (9.6%) by 2021.

Employment: Direct Contribution Travel & Tourism is expected to support directly 99,048,000 jobs (3.4% of total employment) in 2011, rising by 2.0% pa to 120,427,000 jobs (3.6%) by 2021.

(Source: www.tourisminindia.com)

Example- FTAs

(Source: www.tourisminindia.com)

Example- FEEs

(Source: www.tourisminindia.com)

KEY PLAYERS

(Source: www.google.co.in)

INDUSTRY OUTLINE

Value Chain Analysis

The value chain describes the full range of activities which are required to bring a product or service from conception, through the different phases of production (involving a combination of physical transformation and the input of various producer services), delivery to final consumers, and final disposal after use The important parts: Travel Agent Transport mode Accommodation Food Site Operator Cultural group (Source: www.adb.org)

Continued.

(Source: www.adb.org)

Competitor Analysis

Company Thomas Cook India Ltd. Transcorp International Ltd. Cox & Kings Ltd. International Travel House Ltd

2009 0.050 0.054 0.103 0.112

2010 0.082 0.031 0.053 0.145

(Source: www.economictimes.indiatimes.com)

Continued

Continued.

Company Thomas Cook India Ltd. Transcorp International Ltd. Cox & Kings Ltd. International Travel House Ltd

2009 0.091 0.062 0.246 0.079

2010 0.155 0.027 0.283 0.105

(Source: www.economictimes.indiatimes.com)

Continued.

Continued.

Company Thomas Cook India Ltd. Transcorp International Ltd. Cox & Kings Ltd. International Travel House Ltd

2009 1.96 7.05 11.24 20.90

2010 1.05 1.97 7.96 14.13

(Source: www.economictimes.indiatimes.com)

Continued.

Entry Barriers
Govt. regulation. Due to a fragmented market, travel agencies do not have access to distribution channels. Patents and proprietary knowledge serve to restrict entry into industry. Threats of new entrants. Organizational Economies of Scale.

COMPANY PROFILING

Company Overview

Industry Founded

Travel 1841

Headquarter
Products Website

Peterborough , UK
Package holidays www.thomascook.com

(Source: www.thomascook.com)

Corporate Structure

(Source: www.thomascook.com)

Marketing Aspects

Services

(Source: www.thomascook.com)

Brands

(Source: www.thomascook)

Strengths big brand name Loyal customers Unique products

Weakness marketing & advertisement activities.

SWOT
Opportunities Integrate with hotels to increase its profitability International expansion Threats Competition Economic slowdown Natural Calamities

Segmentation
Basis of Segmentation
Geographical : Metro Cities , Tier 1& Tier 2 cities Psychographic : Lifestyle, personality, aspiration Behavioral : Occasion, user status, frequency

Demographic : Age, stage, income

Targeting
Thomas Cook is targeting all Middle Class & Upper Middle Class population. Targeted customers are from Metro cities & urban areas. Thomas Cook has targeted all age groups by its diverse tour programs. Thomas Cook is trying to meet demands which they not meet through there programs. Thomas Cook has targeted people with special needs.

Product

Price

Premiu m Basic Durable

POSITIONING

Premium Low Price Value

Promotion

Distribution

Prestige Fun Powerful

Intensive Selective Exclusive

Competitive Analysis
Enjoy a competitive advantage of corporate foreign exchange. Foreign exchange designed to save money for your business. As one of the UKs corporate foreign exchange leaders, well cut the cost of your international transactions, with highly competitive rates and a fast, dynamic service. We have a full range of drafts, wires and foreign currency available to order online making it safe and secure to trade abroad. Customer service. From the word go youll be assigned a dedicated Account Manager from our team. They will get to know your business and offer their extensive help and expertise. Using Thomas Cooks global buying power, your Account Manager will also give you access to our secure online system and great value services, to help you reduce the cost of trading abroad.

(Source : www.thomascookgroup.com)

Secure online ordering Our state of the art payment system, CFX Direct, has been designed to save your business time and money. CFX Direct is quick to use and makes ordering a wide range of great value corporate foreign exchange products so easy. Simply log in and make fast international payments, order currency and travelers cheques and send money in an emergency, anywhere in the world. CFX Direct also lets you download tailored trading and audit reports when you need them.

International payments Trust Thomas Cook Corporate Foreign Exchange to provide fast, efficient and reliable money transfers that take the hassle out of international business, so you can get on with running yours. From sending international payments and settling invoices, to making multiple transactions whilst youre overseas. Whatever business you need to take care of, our experts will find you the best combination of electronic payments, bank transfers and international wires, at competitive rates to suit your business
(Source : www.thomascookgroup.com)

Currency When you need foreign currency or travelers cheques fast, count on us. We have over 80 currencies in stock at all times and you wont be penalized with expensive rates. Simply order online and well secure the most competitive rates for that day, so youll never pay more than you have to.

Emergency money When you need to send or receive money quickly across the world, our extensive network of global agents will get it there usually within 10 minutes. So if its an urgent payment for goods and services or a traveler emergency, our strategic partnerships with leading money transfer companies worldwide wont let you down.

(Source : www.thomascookgroup.com)

Benchmarking Financial Analysis

Balance Sheet Profit & Loss A/c

(Source: www.economictimes.indiatimes.com)

Continued..
Return on Investment:-

Year 2009 = 0.081 Year 2010 = 0.135 It indicates that shareholders have invested Rs.1/- and got the return of Rs. 0.081/-in the year 2009 whereas it gone up to Rs. 0.135 in 2010. Company`s profitability position should be increased. (Source: www.economictimes.indiatimes.com)

Continued..
Debt-Equity Ratio:

Year 2009: Year 2010

= =

0.614 0.648

The ideal norm is 2:1 which means that every two rupee of debt finance is covered by one rupee of shareholders` fund.

(Source: www.economictimes.indiatimes.com)

Continued..
Current Ratio:

Year 2009 = 1.94 Year 2010 = 2.28 Total current assets have been increased by great margin in one year span. The amount current assets are more than current liabilities, which shows liquidity position of the firm as current assets are easily convertible in cash. (Source: www.economictimes.indiatimes.com)

Supply Chain Analysis

Thomas Cook UK adopted the Travelife Sustainability System in 2007 as a means of engaging in sustainable supply chain management with accommodation providers in destinations. Since then, our team of trained Travelife auditors has assessed our highest volume properties against the environmental and social criteria. In 2010, we now have over 41% of our UK mainstream customers staying in hotels audited against Travelife. Of these, 18% of passengers are staying in hotels which have achieved award level status of Bronze, Silver or Gold.

Future Scope
Revival of general Economy The year 2010 saw a revival in the general economy as well as the tourism industry. A strong GDP growth and the rising stock indices, coupled with positive outlook and the resurgence of suppressed demand, helped boost travel and tourism sector in 2010. The demand for leisure holidays increased due to receding recessionary pressures, economic revival and return of confidence in Indian consumers. Despite the challenges faced last year in terms of a slow economy, sluggish demand and security concerns, the country was fighting back and tourism developments were taking place. Although there could be some short- to medium-term setbacks, the long- term outlook remains positive.

Indian economy growing at around 8% per annum

With Indian economy growing at around 8% per annum and rise in disposable incomes of Indians, an increasing number of people are going on holiday trips within the country and abroad resulting in the tourism industry growing wings. 2010 saw a revival in foreign tourist arrivals after the slump last year on account of the slowdown with a growth rate of 8% as compared to a de-growth of 2.2 % in 2009. The year 2010 witnessed rupee appreciation against major currencies. The buoyant market conditions helped financial services of the Company grow by 8% in volumes over 2009 despite the fact that rupee appreciation created a challenging trading environment for the wholesale forex volumes.

Natural Calamities Despite the constraints faced such as the volcanic eruption in Iceland and consequential ash cloud formation over UK & Europe, and heavy snowfall in the USA and UK, which disrupted air traffic, your Company overcame the difficult situation to report an increase in revenues by Rs. 539 million to Rs. 2792 million. Profit before Taxation and exceptional items increased to Rs. 532 million from Rs. 341 million. Recorded Turnover Your Company recorded turnover of Rs. 2792 million and profit before tax and exceptional item of Rs. 532 million with profit after tax being Rs. 415 million for the year ended 31st December, 2010. The basic earning per share of the Company is Rs. 1.96.

Recommendations
Take a close look at ways and means of improving the existing infrastructure and hygiene conditions at places of tourist interest and public places. Conduct a joint promotional campaign for various states in India and allocate budgets for marketing at international travel fairs to boost tourist inflow in the country. Promote Public Private Participation. Coaching, development and training of employees for their long-term carrier development and retention process. Measures to be undertaken to face the negative impact of Terrorism