Thomas Cook – where did it all go wrong?
When any large business collapses it tends to be the case that there are a number of causes rather than one single issue. Thomas Cook is no different with Brexit uncertainty, a hot summer, a disastrous merger and ballooning debts all being cited from different sources.
However, it is logical to assume that a failure to adapt to the internet revolution in holiday booking must have played a significant part too. The statistics show that Brits are still taking holidays. In fact the figures of Brits taking holidays in 2018 was slightly up on the previous year and the highest since 2011. Although when you delve into this figures in a little more detail city breaks and alternative trips were challenging package breaks. The ease and availability of low cost airline flights and access to accommodation via online platforms like AirBnB will have also inevitably taken their toll.
Stats from Abta also show that that just one in seven of us now go into a high street travel agency to book our holiday. None of which would have been good reading for the senior leadership at Thomas Cook with their high profile presence on the high street. Of course, these stats must have been known to Thomas Cook and consumer trends plus the threat to the high street from online is nothing new.
So where did it all go wrong?
The truth may well take a while to come out and until then we can only really speculate. Especially as the more immediate fall out focusses on getting people back from their holiday and the related political debate. The directors’ renumeration is also under scrutiny by the Insolvency Service who will investigate their pay and their actions in the lead up to the company’s demise.
However, if our own experience working with clients and businesses is anything to go by the most successful brands have adapted not just by paying lip service when deciding how to engage with changing consumer demand, the digital environment and the new work place but instead by fundamentally re-thinking their business at all levels and how fit for purpose it is in the modern environment. For example, simply cutting the number of stores and upgrading the website is unlikely to be enough if online platforms are winning work from you. Either to attract business or maintain margin. Neither will such tweaks around the edges necessarily allow you to attract and retain the best talent.
Unsurprisingly there is no one single solution and each business and sector will be different. However, the common message we see time and again is that reputation and history is not enough.
If online competition or alternative businesses are having an adverse impact change might need to be big and probably needs to happen quite quickly. Often the innovators and market disruptions can be nimble and the technology innovation will also be pushed to the limits if there is money to be made. Likewise the consumer will not wait around if they can get greater choice, sooner, cheaper and from the comfort of their own home.
Find out more about how the workplace of the future is adapting to remain competitive and future-proof their business – read more here.
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