tourism coxndkings final

8/3/2019 Tourism Coxndkings Final

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StrategicManagement

Balram singlaSushilkumar balvirAayush jainRajan doshiRajdeep chahalDevi minakshi

Sahiti chintapalli


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TOURISM INDUSTRY IN INDIA Indian Tourism industry is one of the most important

export industries of the country. Although theinternational tourist inflow is relatively low, India has

found tourism emerging as an important sector ofits economy.

Recent statistics have revealed that during the firstquarter of 2010, the performance of the tourism

industry has been very encouraging which hasregistered an 11% increase in foreign touristarrivals.


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ABOUT COX & KINGS

Established in India in 1978

Biggest asset: trust and comfort that clients have in it

Won several awards and recognitions:

Indias Top Rated Tour Operator Outbound by theEconomic Times & Travel Agents

Association of India Travel Awards (2009)

Best Domestic Tour Operator by TAFI-abacus Awards

for Business Leadership in Tour Operating (2009)


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ABOUT COX & KINGS

C&K has always come out with Innovative andCustomized products to suit its customers needs,e.g. One Stop Shop for varied travel requirements

like Visa, Ticketing, Holidays, Insurance andForeign exchange among others

C&K has created brand awareness among travelersthrough its products like Duniya Dekho, Bharat

Dekoand FlexiHol for Outbound Travel,Domestic Travel and Flexible Individual Travellersrespectively.


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ABOUT COX & KINGS

C&K operates in 19 countries through itsSubsidiaries, Branch offices and Representativeoffices.

In India, it has 255 points of presence covering164 locations through a mix of 14 branch salesoffices, 56 franchised sales shops and a mix of

185 General Sales Agents (GSAs)and PreferredSales Agents (PSAs).


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MAHESH KADAM ROLL NO :44


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Destination Management

Outbound Tourism

Business Travel

Incentive & Conference Solutions

Domestic Holidays

NRI

Trade Fairs

Foreign Exchange

Insurance

Student Business

The principal services offered by the company


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2010-11 2009-10 2008-09 2007-08

COX & KINGS 11.24 7.96 13.96 11.48

Thomas Cook 1.96 1.04 1.99 1.81

Indian TourismDevelopmentCorporation

-1.00 -1.67 3.76 6.53

International Travel

House limited

20.90 14.13 10.24 13.19

EPS


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cox ITC

NetIncome incr.

2010-11 2009-10 2008-09 2007-08

COX & KINGS

252.93 182.00 161.22 122.14

Thomas Cook

282.51 242.95 272.45 244.31

Indian TourismDevelopment

Corporation 392.36 297.55 408.84 467.38

InternationalTravel Houselimited 147.30 109.72 105.11 80.77


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cox ITC

xpense

n Cr.

2010-11 2009-10 2008-09 2007-08

OX & KINGS

116.62 92.42 86.24 65.45

homas Cook

193.33 184.70 184.79 169.19

ndian Tourismevelopment

orporation 399.24 308.22 372.93 391.82

nternationalravel Housemited 72.19 57.98 81.75 55.22

20 0 2009 0 2008 09 200 08


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cox ITC

Net Profitin Cr.

2010-11 2009-10 2008-09 2007-08

COX & KINGS 76.72 50.06 38.22 32.06

Thomas Cook 41.54 22.16 33.39 33.41


Corporation -8.59 -14.31 25.38 44.08



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Net Profit in Cr.

Liq id Cuerrent Ratio Quick Ratio Debt/Equity Long term


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cox ITC

LiquidRatios2010-11

Cuerrent Ratio Quick Ratio Debt/EquityRatio

Long termDebt-equityRatio

COX & KINGS

10.43 10.37 .4 .

Thomas Cook

1.11 2.27 .65 0.0


Corporation 1.76 1.60 --

InternationalTravel Houselimited 1.75 1.72 .01 .0


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Liquid Ratios 2010-11

P fi bili O ti N t P fit ROCE(%) R t N t


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cox ITC

ProfitabiliyRatios2010-11

Operatingprofitmargin(%)

Net ProfitMargin(%)

ROCE(%) Return on NetWorth(%)

COX & KINGS

50.55 30.33 8.79 7.25

Thomas Cook

27.68 15.49 12.50 13.58


Corporation -13.44 -4.78 -4.12 -4.56



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Profitability Ratios 2010-11

M Inventory Debtors Fixed Assets Total Assets


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cox ITC

Management EfficiencyRatio2010-11

InventoryTurnoverRatio

DebtorsTurnover Ratio

Fixed AssetsTurnover Ratio

Total AssetsTurnover Ratio

COX & KINGS

32.73 1.03 5.54 016

Thomas Cook

-- 1.49 -- --


Corporation -- 4.34 -- --

InternationalTravel Houselimited -- 1.94 -- --

C h Fl I di t R ti Dividend Payout Dividend Payout Earni


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cox ITC

Cash Flow Indicator Ratio2010-11

Dividend PayoutRatio Net Profit

Dividend PayoutRatio Cash Profit

EarniRatio

COX & KINGS

10.34 9.46 89.65

Thomas Cook

22.29 17.47

Indian Tourism DevelopmentCorporation

-- --

International Travel House limited

21.12 13.20


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Income of COX & KINGS increased more than 100%in last 3 years.

Current ratio of COX & KINGS is 6-8 times higher to

its competitor. Net profit in 2010-11 has also increased by more than50% over the previous year.


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SEGMENTATION OF TOURISTSBase of Segmentation Categories

Holiday Mass Market, Popular Market,Individual Market

Demand Primary, Secondary, Opportunity

Geography National, International

Psychographics Lifestyle, Personality, Knowledge

Demography Age, Sex, Religion

Socio-Economic Rich-Poor, Urban-Rural, Literate-Illiterate

Purpose Business, Leisure, Culture tourism

Age Teens, Youths, Senior Citizens


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TARGET AUDIENCE SEGMENTATIONBase of 0Segmentation for Cox &Kings

Categories

Non Users Lack willingness and ability (in terms ofincome and leisure time)

Potential Users Have the willingness but the marketingresources have not been used in an

optimum way to influence their impulse

Actual Users Already using the services generated bytourism service providers

Occasional Users Although they do possess the requisiteincome and leisure, they have not formeda habit of traveling

Habitual Users Frequent travelers


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SEGMENTAL PRESENCE

Corporate Travel

Customized business

travel solutions


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LEISURE TRAVELCox & Kings offers products that are either pre-packagedthrough brochures or tailor-made as per requirements of agroup and an individual traveler. Leisure Travel can Outbound,

Inbound or Domestic. It contributes more than 90% of theconsolidated revenues in each of the three most recent financial

years.Offerings

Outbound Travel Inbound Travel (Destination management)

Domestic Travel Meeting, Incentives, Conferences and Exhibitions (MICE) Trade Fairs


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VISA PROCESSING & FOREIGN EXCHANGECox & Kings provides foreign exchange services to customers in India as a

licensed Category II Authorised Dealer .provides foreign exchange services either as part of Leisure Travel and Corporate Travel packages or on a standalone

basis. Cox & Kings provide visa processing services as an outsourced

business solution to diplomatic missions in various countries, where weare the providers of visa

processing services for inbound travellers in India. Visa services are provided in the categories of Tourist visa, Transit visa,

Business visa, Student visa,

Conference visa and Entry and Employment visa Outsourced businesssolution provider todiplomatic missions Licensed retail foreign exchange dealer in India


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CORPORATE TRAVELCox & Kings offers customized business

travel solutions to corporate clients in Indiathrough a team of dedicated corporate

relationship managers. Provide corporate travel services in India to

more than 200 companies, both domestic

and international.Customized business travel solutions


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LEISURE TRAVEL Trade Fairs

Retail clients in India, UK, Australia, NewZealand, Japan, USA and UAE

Corporate Travel

200+ companies located in India


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VISA PROCESSING & FOREIGN EXCHANGE Visa for India from Germany, UAE, Hong

kong, Greece and Singapore

Visas for Malaysia and Singapore from India

and French Visa from UK

Fx operations in India


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SWOT ANALYSIS

STRENGTHS Strong Brand Value International Market Presence

Strong segmental performance Wide Distribution Network Asset-light model Relationship with key suppliers

Delivering high quality customer service Trained Professional Staff Strength


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WEAKNESSES Substantial investment needed to competewith International firms entering Indian market

through tie-ups or buy-out of local firms

Premium products brand image would affectadversely in competition with cheaper

operators or charters.

Industry move towards more directdistribution and reduced commissions


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OPPORTUNITIES Franchisee network to penetrate smaller

cities

with untapped propensity to travel

Wider reach through net enabled sales

Acquisitions within the industry to provide

significant synergies and economies of scale.


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THREATS Tourist flow is highly sensitive to adverse

Political, natural, economic events.

Increase in tax incidence on industry

Existing Regulatory framework and

changes

regarding registrations, disclosures andstate

funds affect C&K as well their suppliers

including CRS companies.


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BUSINESS MODEL

Domestic Strategy

Foray into Tier II and Tier III cities

Expansion of outbound leisure travel sub-segment


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International Strategy

Inorganic growth through selective

acquisitions

Increasing the global distribution network


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Strategic initiatives for profitable growth

Constant up gradation of product and service

offerings Increasing online presence through

a global technology platform

Consolidated Buying Group Strategy leading

to profitable business

Creating strong shareholder value


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INDUSTRY SIZE

Indian economy is the 4th largest economy globally T & T industry in India will grow at a CAGR of 10.2 %

over 2010-2020; thus a fast growing T & T market

Direct contribution of Travel &Tourism to GDP isexpected to be INR 1,570.5 bn (1.9% of total GDP) in2011, rising by 8.1% pa to INR 3,414.8 bn (2.0%) in2021

India is expected to attract 6,179,000 international

tourist arrivals in 2011 which is expected to rise to11,149,000 in 2021 i.e. an increase of 6.1% pa.


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Over the past years, US and the UK remainedthe top two largest source countries for Indiaand are expected to continue till 2015

Over 2010-2015, inbound tourism is expected to

increase by CAGR of 6%, whereas tourismreceipts are expected to increase by a constantvalue CAGR of 3%.

An increased inflow of tourists was seen from

South Africa , Malaysia and Brazil, and thus thefastest growth in spending was seen by thesecountries


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The recovering economy, improved consumerconfidence and attractive deals has led to 13%growth in the number of departures from India in2010 and is expected to increase at a CAGR of 12%by 2015.

US and Singapore continued to be the top twodestinations in terms of outgoing tourist expenditurein 2010, accounting for a combined share of nearly20% of total outbound expenditure.

In 2010 the most outbound tourists visited Singapore,Malaysia , the United Arab Emirates and Thailand.Apart from these destinations, Egypt, Indonesia andItaly are the emerging outbound destinations.


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The number of trips has increased by 14% in 2010and is expected to increase by a CAGR of 14% in2015.

Karnataka was the fastest growing domestic

destination in 2010, followed by Tamil Nadu andBihar.

In 2010, domestic tourist expenditure increased by15% and is expected to continue at a CAGR of 8%

In 2010 Andhra Pradesh received the largest share ofdomestic tourists, followed by Uttar Pradesh andTamil Nadu


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KEY EVENTS

1970 Cox & Kings agency was bought by Grindlays

Bank in a deal with the Indian Govt.1970-99 Largely operated as a ticketing agent; non

leisure business accounted for over 50% of therevenues in 1999

1999-2006 Expanded product portfolio to become a full

service Indian tour operator


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2006-09

Acquired and consolidated businesses withfocus on leisure travel; listed on the Indian

stock exchange.

2010-11

Cox & Kings is a global tour and travelcompany. The Company is a one stop shop

for travel solutions.


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DEMAND DRIVERS

Foreign holidays becoming more of an aspiration asIndian society is being increasingly becoming driven byconsumerism.

With the rise in disposable incomes, the interest and

willingness to spend in overseas travel has increased. Stability in tour-prices and increase in value-added offers

such as Holiday now, Pay Later, Take your Partner onHoliday Free, Holiday Vouchers.

Booming economy, affordable air-fare, betterconnectivity, prosperous middle class have togethercontributed to a large number of holiday seekers.


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BASICS OF COMPETITION

Technology Platforms

Web enabled reservation engine

Centralized dynamic packaging system

Covers all travel related services such as

reservations, insurance, visa and packagetours


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Security

Servers are secured with firewalls

Robust security systems including biometrics

identifiers, fingerprints and photographs forvisa application

Strong disaster management, including

recovery solutions and scheduled backups


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Services

B2B as well as a B2C solution, providing a

backbone to the Global Distribution Systems

(GDS)

Online payment gateways integrated to

existing technology platform

Fully integrated computer reservation systems

(CRS) with our mid and back officeoperations


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PORTERS FIVE FORCES MODEL

1. Threat of New entrants

Lowered consumer search costs anddecreased switching cost open up a marketfor Potential new entrants , this reduces theentry barrier for new companies by opening

the distribution channel and Capitalrequirement

Internet is one of possible bye pass

instrument through which new entrants canenter the market, this can reduce entry barrierfor new entrants.


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2. Rivalry Among Existing Firms within the IndustryFor Cox and Kings biggest rivalry in India is From

sotc,Thomas Cook The Internet brings many more companies into

competition with one another by expanding geographicalmarkets and reduce entry barrier, it can raise the rivalrywithin the industry and increase the pressure for pricediscounting. For Example Makemytrip.com, Travelguru,Yatra.com etc.

3.Power of SupplierCox and Kings has got tie ups with airlines and hotels fortheir travel packages. Increased dependence on themcan affect the price


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4. Power of Buyer The reduced Switching costs of Buyer also increase

the bargaining power of buyer. The customer can easily compare different prices and gain

knowledge about products, thus prices becomes the most

important criterion.

5.Threat Of Substitutes

Similar Products and services offered by the competitors at

cheaper rates. Internet tourist sites like makemytrip.com, yatra.com etc. offers

new possibilities and instruments to meet customer needs byoffering new products and services which could substitute existingones


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SIZE OF THE INDUSTRY

The tourism and hospitality industry is the largest servicesector in the country.

It adds around 6.23 per cent to the national GDP and 8.78per cent of the total employment in the country.

During January-September, 2011, the total FTAs(foreigntourist arrivals) stood at 4,220,000 with a growth of 10.0 percent, as compared to the FTAs of 3,835,000 during January-September, 2010.

FEE(Foreign exchange earnings ) from tourism in rupeeterms during January-September 2011 were US$ 10.25billion with a growth of 16.6 per cent over FEE of January-September 2010


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CRITICAL SUCCESS FACTORS FOR COX AND

KINGS

Motivation of Employees at Cox and Kings.The achiever isoffered unconventional destinations all over India asincentives.

Extensive collaborations with airlines and hotels in exquisite

locations to make travel stress free Customize packages like sight-seeing, shopping and theme

dinners to make spouses feel special



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KINGS

Some of the strategies followed to attract and retaincustomers are

Book early to get crazy discounts!

Photography competition post-vacation with attractiveprizes like travel kits, etc.

Induce customers to come up with innovative onlinecontests on contests based websites. The contest wouldinvolve creation and promotion of various contests

designed by the users. Winners to be accorded a 6month membership program.


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CRITICAL SUCCESS FACTORS-BRANDING

STRATEGY

Promote destination and segment based campaigns by writingarticles in tourism magazines, journals and newspapers like GoWorld, NatGeo Traveller, etc.

Publish advertisements in various tourism and photographymagazines (Travel and Living, Asian Photography, etc.)

Publish testimonials of happy customers on Cox & Kings website Upload medical, adventure tourism and eco-tourism related

videos on YouTube and other video sharing websites Flickr and other photo sharing websites to showcase various

destinations and testimonials from clients

Online magazines like TravelTorch.com, Outlooktraveller.com,etc.


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DISTRIBUTION STRATEGY OF COX AND KINGS

C&K operates in 19 countries through its Subsidiaries, Branch

offices and Representative offices.

In India, it has 255 points of presence covering 164 locations

through a mix of 14 branch sales offices, 56 franchised sales

shops and a mix of 185 General Sales Agents (GSAs)andPreferred Sales Agents (PSAs).


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INTERNATIONAL EXPERIENCE

Cox & Kings has a strong web of International anddomestic marketing arms for effective and successfulworldwide congress promotion.

Cox & Kings International Offices And

Representatives:Cox & Kings has international offices and representativesin UK, USA, Japan, Germany, Spain, South Africa,Russia, Italy, Sweden and Australia. Cox & Kingsworldwide business associate is Radius, with a network of

over 4,640 branches around the world. Worldwide Business Associates:

RADIUS, with a network of over 4,640 branches aroundthe world. A global service that has set benchmarkingstandards in the corporate travel community


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FUTURE EXPANSION PLANS

Travel company Cox and Kings (India) plans toraise Rs 2,000 crore of equity and debt to fundexpansion plans.

Aiming at raising Rs 1,000 crore equity and Rs1,000 crore debt expansion to fund its mergerand acquisition plans

The firm is looking mainly at developed English-

speaking countries to buy travel firms Looking for expansion in Europe, Australia and

U.S specifically


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COMPETITORS ANALYSIS

Two Competitors for Cox and Kings:

o Thomas Cook

o International Travel House Ltd.


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THOMAS COOK

Products Strength Weakness Opportunity Threats

TourpackagesFlightsbooking

ForexservicesTravelinsurance

BrandawarenessHigh numberof offices

Variety of tourpackagesNo hiddencosts

More focusoninternationaltravel than

domesticCostlyservicesRefund policyLowinvestment

Less priorityto costumersatisfaction

EMI schemesthroughbankingrelations

Increasingfranchises willincreaseclientele baseCan growthrough high

FinancialViability

Rise innumber ofcompetitorsExpensive

companiesRisk oftechnologicalobsolescenceDue to lowcustomer

satisfactionmay losecostumer trust


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INTERNATIONAL TRAVEL HOUSE

Products Strength Weakness Opportunity Threat

BusinesstravelCar rental

servicesHolidaypackagesDestinationmanagementservices

RoyalweddingsDestinationmanagementservices

NationwidenetworkState of the

art technologyNetwork ofhotels andaccommodation facilitiesFacilitates

distinguishedservices e.g.Royalweddings

Focused onthe high endconsumers

ExpensiveservicesLack ofpresence inprominentdomestic

locationLack ofadditionalservices

Expandcostumer baseAvailability of

financialequity

Intensesegmentcompetition

Substitutionfor the availedservicesLow industryexit barriers


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tourism coxndkings final

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