International and multicultural company

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Identify the problems faced by Thomson, using the following headings:
   Human Resources

Thomson is an international and multicultural company and it has many branches in more than 500 countries in the world and also %80 of its staff is working outside the Scandinavian countries. Considering these facts, it could be predictable that Thomson will encounter with problems like, engaging new employees, staff education, promotion, award system design, salary and wages system design, keeping a balance between offer, demand and human resources. (Esfandiar Saadat, 2006)

“ Operation management focuses on managing the processes to produce and distribute products and services.” (Carter McNamra) In this new and changeable market that the needs of consumers change quickly, Thomson needs to up-to-date product and service management, initiative management and also quality and facilities management if they would like to increase their market. To solve these problems they should change and increase distribution channels and also reconfigure their management. Last but not least, in term of 10 Ps of problem based on marketing and SWOT analysis, it seems that one of the most important subjects these days is recession of markets specially in the welfare service sections which will be followed with a change in consumer's taste. In the other word when people are not able to meet their expenses, they cannot pay to go to travel. Thus, they prefer to travel around their cities and be back at night. It is clearly observed that Thomson Holiday cannot help these groups who will increase day to day. They can solve this problem by adding a bus fleets. Because it could be cheaper than airplane and also it is a promotional new product that persuade customers that managers are considering their needs. In addition, they are able to extend their market and in terms of their previous experience in traveling, they can become a powerful competitor in this new market. (Alex Nesbitt, 2006)

Thomson is a very customer-focused company which aims to provide excellent customer service at all time.
   a) Explain how a business such as Thomson can use marketing as a means to attract
new customers and maintain its reputation.    b) Define the term 'market segmentation' and explain how this would work for a
company such as Thomson Holidays.

Regarding 10 Ps in marketing, managers of Thomson are able to focus on attracting new customers:

  • Purpose - why you do what you do
  • Problems - who is struggling to solve what
  • Positioning - how you say what you do
  • Process - the marketing process of generating leads and turning them into customers
  • Product - solving your customer's problems
  • Packaging - make it easy for people to understand what you say
  • Promotion - make people aware of what you do
  • Persuasion - get prospective customers to see the possibilities
  • Pricing - get them to value your solutions
  • Performance - prove your value “ (Alex Nesbitt, 2006)

The purpose of this decision is attracting new customers and earning more money. It is clear, each new decision has some new problems that managers should foresee and encounter before meeting them. For instance, new customer taste, market saturation, political problems, shortage of resources. While managers solve these problems they will start to attract new customers and are able to become a powerful competitor for other similar companies and also increase their income.

They have to make models to solve these problems. Because Thomson has many branches in over 100 countries and more than %20 of the total market and many experience in this subject, managers are able to find some similarities between previous and future problems.

The fifth stage is the last important one. In fact if managers do this five Ps well, the other 5 Ps will be much easier. What the customers need exactly? Answering to this question is very important. May be, in an area, they need some new services like cheaper hotels or cheaper airlines but in the other region they prefer to use new, modern and exclusive services. May be they need more positive reaction or more respect. It is important to identify the customer needs.

Managers are more familiar with analysis tools and management concepts than others but it is important to make it clear for customers that their goals are perceived. In fact they should be aware of the decisions of manager team and their future aim to increase their persuasion.

It could be a long period and for both groups costly. It should be clear that what is the value of solving these problems and what is the effect of these in their comfortability . The customers should have a criterion to believe these ideas and could compare the new performance with the earlier one. Thus the previous experiences are very important for both, managers and customers and it is important for a company to maintain its reputation.

2b) Market segmentation helps managers to present different products and different services to different customer groups. It is based on understanding the customers, their interests and their needs for providing a better offer and satisfying the consumers consequently. Then, it is important to identify the strengths and weaknesses of competitor. Also, more focus should be on resources, essentially the budget, and finally marketing and communication strategy.

But it is depending on whether the company would like selling to individual customers or a business. For consumer market segmentation, managers should notice “ Geographic segmentation such as region and population growth rate, Demographic segmentation such as gender, education and income, Psychographic segmentation such as lifestyle, attitudes and Behavioral segmentation such as brand loyalty and benefit sought.” But business often leads markets to segmentation on the following bases. “ Geographic segmentation such as customer concentration, Customer type such as size of organization, its industry and Buyer behavior such as loyalty to supplier and order size.” ( Thomson Holidays deal with consumer and business market segmentation and they should concentrate on the elements of each one and analyse them to attain the best result. For instance, managers have to study about population in different regions, customers income, and their lifestyle to make the best decision for improving or perhaps changing their services. Also they have to concentrate on their competitors by regional industrial growth rate, international macroeconomic factors, size of the organization and order size. It is also necessary if they like to increase their sell power in other areas in comparison with their competitors.

Thomson has diversified into many other business areas. Give two examples of this and explain the reasons why Thomson may have adopted this strategy.

Concerning most successful companies are investing on some different activities simultaneously, Thomson is pioneer in this subject. Because this strategy enable them to increase their annual income even though they could not earn much money in one of their markets. For instance, we could refer to the investment of Thomson in Tem Lincoln and Callers Pegasus.

Because their main subject is tourism services, so they have to invest in a related market and the smart managers of Thomson rightly have chosen this new market. Regarding the duty of Team Lincoln, they are specialized in teletext and Internet. It is clear that they are two important subjects for all tourists. It is easy to buy these facilities in their accommodation and the first place that each customer will search to buy the Internet and/or teletext is the catalog and books that are in the room. In fact, Thomson does not need to find a market for selling their services.

Also Thomson has invested in regional retailers market. Retailers are one of these segments that could help managers to earn much money and because they have entered into partnership, they will increase their effort to attract more customers. On the other hand, in these areas that retailers are working is not enough big shops to sell different services, so customers prefer to buy all facilities from retailers and not only their income will rising in that regions but also these customers will advertise in the other areas for them.

It is possible to lose their customers in a specific period of time so these various products and markets enable them to compensate that sustain.

Managing a company as large as Thomson involves the considerable amount of joint on the part of executive managers, with regular contact across all units.

  • Briefly describe the likely roles and responsibilities of senior management in the
    operation of a multinational organization such as Thomson.
  • What are the challenges typically faced by an organization like Thomson in managing
    its international workforce effectively? Suggest ways in which they could overcome
    these challenges.
  • In an international and multicultural company like Thomson senior manager should be very smart and powerful because s/he is a dean. At first a manager has to identify the organization and assesses all resources then prioritize the purposes. Whether a company could be convertible to a powerful and success one, the role of the management and choosing the best management method is inevitable. A senior manager should manage and control risk and establish policies that define how the organization will decline these risks. Other important duties are allocating financial resources, conducting enterprise tests, auditing control, human resource services, establishing training program, health, safety, job security and being familiar with different cultures and markets and needs.(Hector Sants, 2005)

    Totally speaking, different cultures have different needs and different reactions. May be it is important to earn more money in a region than working time. Considering different religions with different customs and ideas is the other important challenge in a multicultural organization. For example, Ramadan is a month that Moslems must stay at hometown and do some special customs. In fact they cannot use the services of Thomson Holidays. It is including the workforce too. May be they have to temporarily leave their work during the work time! What's more, reacting to award and punishment differs in different cultures. For example, Reduction of salary as a punishment may lead to decrease in the quality of job in one culture while it could be a successful punishment in the other. Also in some societies, employees will be instigated by increasing their wage but it is better in another nations to gave them more facilities like accommodation. If multinational companies would like to solve these problems or they prefer to avoid them, it is better to choose a manager from that region. Because s/he is more familiar with the culture and also the problems in that specific area than others. In addition, customers and retailers would not have negative reaction against decisions of the manager.