Tour Operations Management

1
Tour Operations Management

• The evolution and growth of the
• Tour Operations sector
• Based on the UK case study (Morgan 2002)

2
What conditions are necessary for the growth of
package tours?see Casarin Ch 9 in Buhulis and
Laws

• Political
• Economic
• Social
• Technological
• Environmental
• What lessons can be learnt from the story of Tour
  Operations in Western Europe for other emerging
  markets such as BRINC?

3
Competitive Strategies in TOps

• The development of package tourism in Europe has
  been driven by the competitive strategies of the
  leading Tour Operators
• How do theories of competitive strategy help to
  explain the behaviour of these firms?
• Use the case study and focus on Thomson

4
Competitive Strengths

• What are the key factors for success in this
  industry? (Jobber 1995)
• Financial strength
• Technological
• Creativity
• Expertise
• Product Quality
• Access to distribution channels/location
• Identify the sources of Thomsons strengths using
  these headings

5
Competitive Behaviour

• competition or co-operation
• head-on or blindside approaches
• the generic strategies (Porter 1980)
• - low cost leadership
• - differentiation
• - focus

Find examples of these strategies from the case
study
6
Sources of cost leadershipJobber

• Economies of scale
• Experience curve -gt efficiency gains
• Integration
• Capacity utilisation (marginal costing)
• Production in lower cost/deregulated country
• What was the basis of Thomsons leadership?

7
Example First Choice
Reverse Charter Model e. g. Turkey to Europe
Aircraft based in destination Low cost local
operations Service 28 regional airports in
source markets
8
Sources of differentiation

• Product features (USP) v brand personality
  (Ogilvy)
• Service
• technical reliability v functional
  quality(Gronroos)
• human factors-attitude, responsiveness,
  friendly atmosphere
• How to sustain a competitive advantage (Jobber)
• patents, continuous innovation
• relationships, personality
• Is sustainable differentiation possible in TOps?

9
Industry structure

• free competition
• oligopoly
• monopoly
• Where does the UK tour ops sector stand
• barriers to entry
• horizontal and vertical integration
• political restrictions

10
Porters Five Forces defining industry
competition
Porter, M (1980) Competitive Strategy, New York,
Macmillan p 4
Threat of new entrants
Rivalry with direct competitors
Bargaining power of buyers
Bargaining power of suppliers
Threat of substitute products
Use this model to analyse the tour operations
sector
11
Internationalisation

• Growth motives
• economies of scale
• home market saturated
• spread the risks
• Market motives
• potential demand
• gaps or weaknesses in supply
• exploit competitive strengths
• Competition motives

12
Market entry strategies

• Alliances
• Joint ventures
• Acquisition
• New start-up

13
Adaptation issues

• The new multi-national companies have unified
  bargaining power and economies of operations
• Are the national markets ready for global brands?
• Thomson TUI, Thomas Cook, Club Med
• Will the customers mix in the resort hotels?