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TUI Group’s International Operations Essay

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How has TUI AG configured its operations internationally in order to serve its various markets? What benefits does this provide? Are there any disadvantages?

In 1990, Germany Company Preussag AG reinvented into TUI AG Company. From its initial stage, TUI AG Company concentrated in container shipping and tourism industries. Over years TUI AG company has divested in industrial holding and to date, it serves diverse global companies within the tourism supply chain such as tour operators, travel agencies, and distribution channels like call centers, TV channels, and online travel business), hotels and airlines.

To expand globally TUI AG Company has acquired new international companies. Although these newly acquired companies do not change their original brands they remain property of TUI Group. It operates a large container shipping companies with more than 140 vessels. It manages an integrated (horizontally and vertically) tourism supply chain by owning numerous tourism companies each one of them performing different key functions throughout its distribution chain.

In addition to the joint venture and acquiring new companies, TUI AG Company has merged with other companies. TUI AG Company configuring its operations internationally has benefits such as creating synergies among its companies and establishing and controlling quality levels across all elements of the tourism products from purchasing, transportation, incoming tour handling, destination excursions, accommodation, and ground handling.

An integrated tourism supply chain also enables the group to achieve high utilization and occupancy rates within its tourism supplier companies. Also, TUI AG Company configuring its operations internationally has strengthened it. This has heavily contributed to its growth. It has increased its efficiency and services quality, access to cheap inputs, and diversification of its market. Disadvantages involved in TUI AG Company configuring its operations internationally include increasing operating expenses, strict foreign regulations and standards, and an unfamiliar business environment.

What is the strategy preferred by TUI AG in penetrating new international markets? What are the benefits of this strategy? Are there any disadvantages?

The major strategy used by TUI AG Company is to constantly hold the top niche in its service delivery and keep in line with new trends. It has restructured and re-branded its companies to similar groups. In addition, it has re-engineered its business model and embraced internet technology to provide tourists with information. Merging with other existing companies along with acquisitions new companies and joint ventures are market penetration techniques used by TUI AG Company.

To efficiently penetrate the international market TUI AG Company uses a differentiation strategy. It ensures that their services are quite unique and of high quality compared to competitor companies. Each of TUI AG company markets has its own distribution strategy.

This strategy is meant to satisfy wide range of customers globally and suite the fast changing market. TUI AG company travel has market leading positions in independent travel including online specialist holidays, accommodation, and adventure. Relentlessly, TUI AG Company does research to invent new services to conquer niche market. This strategy has led to TUI AG Company growth internationally. It also uses online distribution channels strategy within the accommodation sector.

The benefits of this strategy include chances that TUI AG can influence economies of scale. When it provides the same service worldwide, it can secure labor at low cost, potentially saving on TUI AG Company’s annual expenditure. Disadvantage of this strategy is that one strategy does not efficiently suite all markets. There is great diversity in market demand and requires different strategy to approach it. There is large risky involved in TUI AG strategy in penetrating new international markets in relation to change of corporation and employment laws which vary among countries.

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IvyPanda. (2021) 'TUI Group's International Operations'. 9 February.

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