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Tour Operations Management. The evolution and growth of the Tour Operations sector Based on the UK case study (Morgan 2002). What conditions are necessary for the growth of package tours? see Casarin Ch 9 in Buhulis and Laws. Political Economic Social Technological Environmental

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tour operations management

Tour Operations Management

The evolution and growth of the

Tour Operations sector

Based on the UK case study (Morgan 2002)

what conditions are necessary for the growth of package tours see casarin ch 9 in buhulis and laws
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?

competitive strategies in tops
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
competitive strengths
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 Thomson’s strengths using these headings

competitive behaviour
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

sources of cost leadership jobber
Sources of cost leadershipJobber
  • Economies of scale
  • Experience curve -> efficiency gains
  • Integration
    • Capacity utilisation (marginal costing)
  • Production in lower cost/deregulated country

What was the basis of Thomson’s leadership?

example first choice
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

sources of differentiation
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?

industry structure
Industry structure
  • free competition
  • oligopoly
  • monopoly

Where does the UK tour ops sector stand

  • barriers to entry
  • horizontal and vertical integration
  • political restrictions
porter s five forces defining industry competition
Porter’s Five Forces defining industry competition

Porter, M (1980) Competitive Strategy, New York, Macmillan p 4

Threat of

new entrants


power of


Rivalry with




power of


Threat of



Use this model to analyse the tour operations sector

  • 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
market entry strategies
Market entry strategies
  • Alliances
  • Joint ventures
  • Acquisition
  • New ‘start-up’
adaptation issues
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?