Identify and explain the main political, economic and social factors that are likely to affect Thomas Cook plc. Political factors that may affect Thomas Cook plc may include civil unrest for example in Syria. This may affect Thomas Cook as their sales may decrease due to the lack of interest in visiting that country in turn giving low profits. Thomas Cook could be affected in the same way by the introduction of terrorist attacks, potentially facing a decrease in sales and even flights taking place.Another political factor that Thomas Cook may be affected by are health and safety regulations as they may have to ituate capital into further health and safety precautions which could potentially lead to high expenses for the company.
Government intervention is another factor that may affect Thomas Cook, such as the introduction of legislation on emissions produced from planes to be at a set level for a fixed period of time.If taxation were to increase Thomas Cook may be affected due to the evident increase on income tax and so they may now receive less profit then they had previously. Thomas Cook may also experience the effects from an increase in Corporation tax.
Both cases of tax ncreases possibly leaving them with less profit and less capital to use for other aspects of the business such as expansion. An economic factor that may affect Thomas Cook plc is inflationary factors such as the price of oil to increase significantly.Due to Thomas Cooks necessity of the product oil to their business, they will continue to purchase it and abide with the expenses involved. However, this may leave them with less capital inhibiting the ability for growth within the company.
Also, the recession may affect Thomas Cook plc significantly due to the loss of Jobs and rising and falling income. This would affect Thomas Cook as due to loss of Jobs, people may have less disposable income and so will not be spending money on holidays, they are more likely to spend money on necessities such as their bills.Adversely, if a country were to experience a period of ‘Boom’, Thomas Cook may experience an increase in sales of holidays and therefore higher profits due to consumers having a higher amount of disposable income. Social factors consist of the potential increase in demand for package holidays where Thomas Cook may experience a large increase in sales due to their recognized position as a leading ackage holiday merchant. Evidently this would give higher profits, providing the opportunity for the company to grow if it desired to.
Also if public attitudes on pollution were to arise and things such as pressure groups were to form then this could influence a large amount of people to not want to be involved with all factors sourcing pollution. Due to Thomas Cooks significant contribution towards pollution through the emissions produced from their planes, this could mean that due to the influence of the attitudes the sales may decrease and so less profit is retained. ample if a country were to experience a larger single status population, this may lower holiday sales for Thomas Cook disallowing them to reach high profit margins due to the norm of holidays being ‘couple’ or family event. Overall I think all factors mentioned would affect Thomas Cook plc but I believe that the strongest factor and the one that holds the biggest effect on Thomas Cook is the economic factor, a recession. A recession has the potential to determine whether a large amount of existing or new customers even provide sales for Thomas Cook at all for no other reason than they cannot afford it.