Business Environment: Premier Inn Case Study

This report provides an analysis of the business environment of Premier Inn, the UK's largest hotel chain. It includes information about the company's background, products and services, and competitive advantage using Porter's five forces. The report also explores the value chain analysis of Premier Inn and its impact on the organization's operations and profitability.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Information about the company..................................................................................................1
BACKGROUND INFORMATION............................................................................................1
Discuss product and services......................................................................................................2
Porter's five forces.......................................................................................................................2
TASK 3............................................................................................................................................5
Chain analysis of organisation....................................................................................................5
TASK 4............................................................................................................................................7
Reflection and summarization of how IT is helpful in achieving competitive advantages in
market..........................................................................................................................................7
CONCLUSION................................................................................................................................8
REFRENCES...................................................................................................................................9
.......................................................................................................................................................10

INTRODUCTION
Business environment is the sum of all the different factors as like internal and external
such as employees, customers, suppliers, buyers, customers need and requirement, supply and
demand, owners, social and market trends, technological advancement, economic and social
changes, rules and regulations of the governance and many more. It is a factor that defines the
ability of the business to maintain and develops the healthy relationship with the customers.
Business environment has an direct impact on the growth and development of the business and
with that it influences the decision-making process of the company. These are the factors that is
not in the control of the business but they could only applies little changes within the business to
cope-up with the market change. Premier inn is the UK largest hotel and it is a British chain and
have approximately 800 hotels and more then 72,000 rooms and have the headquarter in
Dunstable, UK. In this report it includes the information about the background and the product
and services that is served by the company. After that analyse the competitive advantage by
using porter's five force and then analyse inbound logistics, operations and outbound logistics
and then analyse the porter's value chain analysis to support the different activities of the
company. Furthermore, includes the porter's five force analysis that reflects the deployment of
the business of information technology.

MAIN BODY
Information about the company
Premier inn operates their hotels in a different locations and includes city centre, airports
and suburban area as well and compete with Ibis hotels and travelogue. Premier inn is the
hospitality industry and it is a subsidiary private limited company and provides their services to
UK, UAE, India, Germany and many more. Their brand strengths and focus on the market and
provides sustainable development and potential to the business (Mrkajic, 2017).
BACKGROUND INFORMATION
Premier inn was developed in 1987 by Whitbread to gave a competition to the travelogue
while, Whitbread bough premier in 2004 and merged with the travel inn as to cover both the
services and named as “Premier travel inn”. There are around 618 hotels that has received Trip
Advisor's certificate of excellence as per the continuous outstanding reviews out of the
customers. Company works with approx 10,001+ employees and their main aim to perform all
the different activities with the responsibilities and sustainability. Their hotels served the friendly
and family throughout the UK and beyond that as well (Nam, Lee. and Lee, 2019).
Discuss product and services
Premier inn served best services to their customers and with that provide en-suite
bathroom services in each room and supply super comfy or king sized bed with duvet, provides
tea and coffee making facilities, remote control TV and AC. They also offers irons, hair dyers,
and other services as per the requirement and demand of the customers. They also provides the
free Wi-Fi services to their customers and also give best food ad beverages as per the demand
and always ensures that food looks even more delicious with that customers feels
mouthwatering.
Porter's five forces
It is a force that defines the competitive analysis for the business and describes the five
forces that affects the growth and development of the business by which the attractiveness of the
business will be increased in terms of profitability and productivity. It is a model that is
published by the author who's named is Michael E. and he writes the book in 1980 named as
Porter's book "Competitive Strategy: Techniques for Analysing Industries and Competitors".
With the help of this force company measure the different circumstances of the market and then

business applies different strategies to measure the success and growth and gain the competitive
advantage. Thus company further make some strategies to get over from their rivals and
maintains their profit (Yang, 2017). Premier inn performs that analysis to measure the different
factor that resist their performance and then company proceeds with different strategies to gain
long time success. There are different forces of porter that are as explained below as:
Threat of new entrant: Threat of new entrant is related to the danger that company gets
or have when same kind of business enters in the business environment. Market has a huge
demand of hotels, restaurants, motels and guest houses but stills it is required that efficiency of
different operations that has been performed by this business will be maintained. Therefore, it is
quite tough for new companies to maintains the develops the sale and profit with the new
business. Hospitality industry is the biggest obstacle for those who have new entry in the market
and it is even more complicated for the company to raise the use of resources and also to
develops more profit. It is a sector that need a huge investment in the starting as company has to
manage different sources as like food and beverages, best view, standardised room services,
warm welcome, check-in and check out and many more. Thus premier inn doesn't have that
mush threat of the new entrants and with that they have huge brand value and brand recognition.
As premier inn has better promotional development and better services that attracts the large
customer base.

(Source: Porter's five forces analysis, 2019)
Threat of substitutes: It is a factor in which company will remain quite more alert from
their substitutes. As they have some different strategies through which they satisfies the need and
demand of the customers. For example if the customer visit any of the hotel or restaurant they
have a huge varieties to eat as all the hotels offers different and unique meal to their customers
(Linder. and Williander, 2017). In the hospitality sector services has been changes and
implemented as per the requirement of the market and that always develops the new products
and services. Substitutes might comes with new development in terms of decorative walls, spa,
bars, clubs to convince and attracts the large customer base to gain the competitive advantage.
Premier inn overcomes with this by making continuous development and changes within the
business by adding different infrastructure in the form of bars, gym, complex, sports facilities,
DJ clubs with the reasonable and affordable prices.
Bargaining power of customers: It is the power or authority of the customers with that
they could change and implement new changes within the business. It stands on the different
Illustration 1: Porter's five forces analysis

power of customers towards the hotels or restaurants and any other hospitality sector business.
Porters states that customers are the biggest factor as company works for them thus it is
mandatory that demand and requirement of the customers gets satisfied. As customers has higher
power as they have many option to switch thus they have more power as compared to the
suppliers. If the need of the company doesn't satisfied then they could easily stop using services
of that particular company and after that retaining process of the company is very much hectic.
For this premier inn has more powers as they have huge and loyal customers base that enhance
the profitability of the business. Company also measures the need of the customers and ensures
that service will be provided on premium prices and add value addition in the product and
services of the company(Ji-fan Ren. and et. al., 2017). That helps the company to retain their
customer and gains the sustainability for the longer period of time. Customer also have more
glued with the services of the premium inn thus company gain more advantage as compared to
their competitors.
Bargaining power of suppliers: It is a force that defines the force of the suppliers and
they are the holy makers of the pricing of different resources that is offered to the customers.
There are a lot of suppliers in the market thus different industry of hospitality sector have the
advantage as they can easily switch to any other suppliers. Thus bargaining power of suppliers
are less as compared to the buyer as company have full control on the suppliers. On the other
hand suppliers overseas by supplying large amount of resources to the company by offering
better deals. Premier inn has huge control on their suppliers as they choose the number of
suppliers by using appropriate strategy for growth. They also harvest most of the fruits and
vegetables in their own garden or space that save the appropriate cost or price of the company.
Rivalry among existing competitors: It is a force that states the different factor that affect
the rivalry of the existing competitors. As suppliers and buyer has different power to choose or
deal with the rivals. If the company chooses same services for a large period of time then
customers get rid of the services and company gets loss. As there is a huge market competition
with that it is hard for the company to retain in the market for the long time. For that premier inn
provides the best and quality services to the customers with continuous development thus
company gains the profit and sales.

TASK 3
Chain analysis of organisation
Porter's value chain are those types of activities in which there is analysis is of those
important parts of an business which helps in achieving improvement in a business. These are
very much necessary because it helps in achieving growth and capability of an business to earn
profit. These helps in making sales more efficient by helping in its growth. It is done only after
these activities are introduced and changes takes place in a organisation (Gaganis, Pasiouras. and
Voulgari, 2019). Major role is played by this model in organisation like Premier inn. As it
analysis those important elements for an organisation like Premier inn which is very crucial for
growth of organisation and can not be taken lightly. After the completion of analysis under
value chain Premier inn is able to mark out those activities which are of primary nature. Also
those activities which are their for supporting increase of range of customers. Under primary
activities logistic, marketing and sales is involved and in secondary that kind of activities are
included which are helpful for upliftment in both services and product like human resources,
technology and management. Premier inn is effected from these kinds of things in a manner that
it creates an direct effect over the sales and goods production. Few primary activities are
explained below:
Inbound logistics: In these types of activities there is an wider scope of development of
business and also relationship with suppliers are improved. These are important from point of
view point of availability of raw materials like bedsheets, pillows and blanket within a time limit
specified. Stronger relationship with buyers is going to boost their facility and also support over
supply of raw materials. Premier inn is to be beneficial due to these types of analysis in an
manner challenges of providing better facilities and best services is achieved because of these
analysis. Managers of Premier inn UK is going to get boost in their services and smoothness in
production of raw materials is maintained without getting effected in any manner (Michael,
Reisinger. and Hayes, 2019).
Operations: It is their in order to help in achieving those goals which is related to
betterment of services and preserving ingredients for food preparation by hotel chef. Activities
which comes under Premier Inn is forming bed for its customer, checking quality of food and
providing better cleaning facilities to its customers. All these activities can only be achieved by
corporation of hotel staff with each other. This analysis lead towards upliftment of productivity

and services which is going to lead for enhancement in growth of competition for other hotels.
This is going to lead towards growth with consistency in services.
Outbound Logistics: Activities of these types are related to providing best and
consistent service to its customers. Premier Inn is able to gain benefit out of it in a manner that
handling and scheduling with producing quality in food is going to be achieved because of these
activities. Cost for these is also analysed. It is helping Prime Inn in determination of those
sources and problems which is responsible for providing advantages to competitors.
Management of service and cost efficiency in ingredients of food are very important for growth
of hotel. After this quality of services are improved and food delivery is going to be much faster
(Viriyasitavat. and et. al., 2018).
Their many other kinds of activities are their which is needed to be done by Premier Inn
staff which provides that helps in improvement of coordination and improvement of primary
activities. Premier Inn is going to be benefited out of this as it is going to increase it value within
its customers.
Technological Development: It is considered as one of the most important feature
of this analysis which has to be taken into consideration by an organisation. Due to this lot of
advantages can be gained by an organisation when it is gaining competitive level. In Premier Inn
this is important from view point of adding value towards efficient services and providing
quality of food. Only in these kinds of activities there is differentiation among process of
technology and production of activity. In this manner it is provided towards upliftment which
creates an unique way which helps in development of security and introduction of new dishes in
management. Research and development also comes under technological development only
(Lam. and Wong, 2018).
Procurement: Procurement activity is important part of this value chain because it is
provided to keep a check over pro curation which means saving ingredients of food, saving of
funds and achieving customer satisfaction. It is their to help in providing quality of food which is
achieved by analysing customers preference. Premier Inn is required to take procurement under
consideration because it helps in management of cost which is going to help Premier Inn to
achieve its financial goals. Due to this both inbound and outbound is managed in very effective
way by this activity. This leads in growth and development of hotel Premier Inn in smoother and
effective manner. Operations is also going to improve as it is going to lead in development and

faster services by the staff of hotel and quality in food is going to increase its goodwill in the
market.
TASK 4
Reflection and summarization of how IT is helpful in achieving competitive advantages in
market
The well known fact in current world is that as their is technological factor which is
becoming advance day by day and is used in almost every sectors. These advancements are their
in order to reduce work load and paper work. There are various types of benefits which is their
for utilization and introduction of IT in various organisation and businesses because it has helped
in improvising performance by making it more effective and also gives more opportunity. These
technology also provide with achieving of task and creating systematic way of performing a
particular task in smoother manner. This also provides opportunity for increasing and
maintaining preferences. Premier Inn is going to gain benefit form it in a way that it increases
performance and enhance services to make its hotel best in all over UK. It has to face direct
competition among the competitors of it in market (Lu, Wang. and Xu, 2019). Competitor of this
hotel chain is advancing itself in technologies and to stay ahead of them Premier Inn needs to
focus over developing its IT department. Premier Inn wants to achieve approach and improve
their result in services provided to customer and quality of food for this purpose they need to
improve and introduce new technologies in its working pattern. This is going to done by
introducing digital menu services which is going to help in preparing of data about food quality
and then more emphasis is to be paid over online payment and e payment. Introduction of these
types of facility is going to boost ease of doing payment by customers and also helps in
maintaining data about payments made by an customers. This is also going to lead to saving of
time and unnecessary wastage of time is going to be reduced to an certain extent. Second thing is
that it is going to help in knowing preferences of customers as they are going to give feedback
over various dishes. Also quality of food is going to be improved because of this. It is also going
to increase comfort and attracting customers. There are other things also which is going to create
an impact over an organisation and Primer Inn. Further introduction of artificial intelligence is
going to be effective in serving food and making it in much faster manner. It can also guide

customer towards root of Premier Inn. It can also be experimented with innovative ideas and
some kind of uniqueness can come out in way of its advertising. This leads in attraction of
customer at a larger scale in a market. Premier Inn has to understand the power of IT and should
also focus over combining them with in their services which eventually helps in increasing their
services at much faster rate. IT is new emerging key which is going to lead towards a revolution
in market for various types of businesses. In future paper work is going to be less and reduced.
People is going to perform more functions through computer. Premier Inn is going to get a
positive benefit after introduction of technology in business because it is going to helps in
making its services much better and faster (Nayak. and Mohanty, 2017).
CONCLUSION
In the above concept of technology has been discussed which means enhancement and
advancement of new technology developed. These technologies are beneficial as it helps in
attracting more customers and achieving success. Objectives and goals are also achieved by this .
It is going to help Premier Inn in tackling its competitors more effectively and in better manner.
This has helped in identifying of those factors which can effect growth of the company. These
factors are very important to be analysed through because it can effect an company in eternal
manner.

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ONLINE
Porter's five forces analysis. 2019. [Online] Available through: <https://medium.com/product-
gyaan/porters-five-forces-analysis-868945aa5846>.