Strategic Analysis of Thomas Cook

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Introduction

Strategic Analysis of Thomas Cook, I have selected the Thomas Cook Group plc, which is a British travelling agency originally founded by Thomas Cook in 1841. The travel company is registered on the London Stock Exchange and its headquarters are located in London. The present structure came into being on 19 June 2007 through a merger between MyTravel Group plc and Thomas Cook AG (60K, 2012 & Keynote, 2013).
Resources – Human & Physical
Basing upon the factors mentioned by McGrawhill (n.d.), Thomas Cook’s resources have been identified as under:
• Specializes in the leisure travel category and is the second largest traveling agency in UK (Roberts & Barnfather, 2008).
• Physical assets include 800 stores, a fleet of forty four passenger airliners, hotels and acres of real estate all over the world, valuing 5906.8£M (Dickson, 2012 & Thomas Cook Annual Reports & Accounts, 2012).
• Employs 35,160 people and utilize extensive training programs in management, operations, administration and logistics (Roberts & Barnfather, 2008 & Thomas Cook, 2012).
• A highly cohesive Enterprise Project Management (EPM) system, intranet, web presence and data access systems for travel agents (Microsoft, 2013 & Thomas Cook, 2012).
• Intangible assets include customer protection guarantees, dynamic packaging and brand name (Whitwell, 2012).
• Recent alliances include those with Variety Club (2004), Tri-West Travel Holdings (2008), Öger Tours GmbH (2010) and London Olympics (2012) (Thomas Cook Annual Reports & Accounts, 2012).
Financial Analysis
Analysis of the Group’s balance sheet (Thomas Cook Annual Reports & Accounts, 2012 & FT, 2013) reveals that revenues have decreased to 9,491.2£m i.e. by 3.2%. Operations generated an underlying profit of 156.1£m against 147.5£m in 2011 (Appendix – 1). The reasons of decrease in profit primarily include enhancement in fuel and hotel accommodation costs amounting to 157£m and also the restructuring, reorganization and refinancing costs amounting to 110.8£m (Appendices – 2 & 3). The total impairment of goodwill is in terms of 368.7£m owing to decrease in profitability in Canada, France and India. As far as the earnings per share and dividends are concerned, the Group suffered a basic loss of 67.2p per share and dividends were not paid at all in 2012.