Hospitality Business Strategy

This report analyzes the impact of macro and internal environment on the hospitality business strategy of Premier Inn, covering PESTEL analysis, SWOT analysis, McKinsey's 7S model, Porter's Five Forces model, and Porter's Generic Strategies. It suggests appropriate strategies for improving competitive edge and market position.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Part A...............................................................................................................................................3
P1 Analyse the impact and influence of macro environment on given hospitality organization
and its strategies.....................................................................................................................3
M1 Critically analyse the hospitality macro environment to determine and inform strategic
management decisions............................................................................................................5
P2 Analyse the internal environment and capabilities of a given hospitality organisation using
appropriate frameworks..........................................................................................................6
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.....................................................7
P3 Applying Porter’s Five Forces model, evaluate the competitive forces of a given market
sector for a hospitality organisation.......................................................................................7
M3 Devise appropriate strategies to improve competitive edge and market position based on
the outcomes...........................................................................................................................8
Part B...............................................................................................................................................9
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given hospitality organisation........................................................................................9
M4 Produce a strategic management plan that has tangible and tactical objectives and
priorities................................................................................................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The strategy in business is defined as the course of activities or the set of decisions which
assist the manager of company to achieve their business objectives and goals effectively. Due to
the effective use of various business strategies organization is able to fulfil the requirements of
customers in quick manner. In aspect of hospitality industry, it is basically a part of large group
sector which is known as tourism and travel and also facilitates essential goods and services to
travellers. To maintain the future objectives and plans in efficient manner the manager of firm
develops various strategies (Aljarah, 2021). For this report, hotel Premier Inn is selected which is
the biggest hotel chain in UK. The company was established in 1987 and the head office of this
firm is located in United Kingdom. The report will be covered the impact of macro environment,
internal environment and capabilities, porters five force model within hospitality organisation.
Furthermore, report covers range of theories & models along with devising strategic planning for
organisation.
TASK
Part A
P1 Analyse the impact and influence of macro environment on given hospitality organization and
its strategies
The macro environment is basically a combination of situations which already exist in
economy and that is strongly connected with the business cycle. Due to the impact of macro
environment, hotel Premier Inn is not able to maintain balance in their performance for long
time. The various types of strategies which utilized by this company for analysing macro
external factors effectively are -
PESTEL Analysis -
The model of PESTEL is connected with external business environment which analysed
the external factors for adapting the changes in market effectively. In aspect of hotel Premier Inn
PESTEL analysis assist in understanding the effect of these factors which are described below -
 Political – This factor impacts the profitability of organization as political risk carried
from sudden modifications with existed political regimes as government take decision. It
involved the factor of political stability, trade restrictions and employment laws which
influenced the Premier Inn hotel.

 Economic – It is considered with those factors such as interest rate, foreign exchange rate
and tax rate which pertained to country economy. Due to increasing growth in the rate of
GDP country will impact the Premier Inn hotel for having growth in future aspects. The
balanced economic conditions will bring prosperity in economy which leads to enhance
market share and portfolio of hotel at higher rate.
 Social – The elements which comes under this factor are buying behaviour and
purchasing power of consumers. In context hotel Premier Inn due to considering all these
elements the value for their services and goods are highly increased in minds of
customers. In this way company easily fulfilled the requirements of customers in time
without any type of delay (Chang and Kim, 2022).
 Technological – The effective utilization of technology will assist to made effective
modifications with help of Premier hotel. Due to the effective adaptation of advanced or
latest technology like automation, artificial intelligence and others will assist in
improving the growth of market and also brings in the activities of business.
 Environmental – This type of factor is considered with pollution, population rate and
climate change. The management of hotel Premier Inn followed various measures to
execute to execute different safety measures and also to build reputed brand image in
marketplace. Here hotels also take care of green marketing which assist in safeguarding
the environment.
 Legal – It is connected with various legal considerations, procedures and policies which
is highly important to follow by the company to run the business activities smoothly. In
respect of Premier Inn hotel, they followed all types of policies and rules for operating
their business functions in smooth, ethical and legal manner.
SWOT Analysis -
It assists in evaluating the internal management of strategies and business and due to this
firm is able to sustain competitive advantage in market for long time. In context to Premier Inn
hotel SWOT Analysis is conducted in to four stages -
Strength -
 The biggest strength of this hotel is that having strong brand image in market. Because
the main focus of this firm is to deliver best quality products to users as per the needs and
requirement of users.

 Utilization of skilled and talented employees is also one of the strengths for this
company. Due to this hotel is sustained positive relationship with their potential clients
for long duration.
Weakness -
 In context to Premier Inn hotel, management are facing lots of difficulties for managing
their financial leads to decrease the performance of company in various locations
effectively.
 Second weakness is that less investment in research and development which leads to
decrease the popularity of their product in market effectively.
Opportunity -
 Due to keeping strong brand image the management of Premier Inn hotel has the
opportunity for expanding their services in various locations effectively
(Darvishmotevali, Altinay and Köseoglu, 2020).
 This hotel has presence through online mode which provides various facilities in online
way which includes booking, evaluating feedback from users and others.
Threat -
 The rising raw material is big challenge for the hotel profitability along with change in
customer buying behaviour from online channels is threat for hotel premier inn.
M1 Critically analyse the hospitality macro environment to determine and inform strategic
management decisions
It has been analysed that the PESTEL Analysis is basically a one type of method of
macro environment which is useful for determining the weakness and strength of Premier Inn.
The customer of this framework assists in facilitating effective ideas regarding external
environment by concentrating on various factors which impact the profit and growth of hotel.
The execution of various effective strategies assist in attaining the economies of scale. This
motivates the development of strategic and external thinking which permits Premier Inn hotel
forf anticipating the future business actions and threats to reduce its affect.
P2 Analyse the internal environment and capabilities of a given hospitality organisation using
appropriate frameworks
The strategic capabilities is referring to procedure through which a organization executes
and shapes different types of strategies effectively. These strategies support the organization for

achieving revenue and benefits at high level against competitors. It involved the review strategy
according to review based which is used by firm for determining the strategic resources to gain
competitive advantage in market for long time.
McKinsey's 7S model
It is basically one type of tool which support the management for analysing company's
design with help of identifying seven key internal elements. Therefore, these elements are
required to align in proper and effective way. In this way hotel Premier Inn is able to gain their
objectives and goals within short duration. Those elements are discussed below -
 Strategy – It is one type of plan which is executed by organization for attaining
competitive advantage effectively which leads to decrease competition for this hotel. In
aspect of hotel Premier Inn, it is not a robust strategy and due to this firm will faced
various problems like reduction in sales and customer base (Fusté-Forné and Jamal,
2021).
 Structure – It depicts in manner where the divisions and business units are organized and
shared data between each other. In case if the structure of Premier Inn hotel is in
appropriate then it will decrease the performance of firm due to which competitors will
gain benefit.
 Systems – It is the procedure of organization which aims to depict the functions on
regular basis and also in company's decision making. Managing system appropriately will
facilitate advantage to the managers in business during the time of executing
organizational change effectively.
 Skills – It involved capabilities and competencies of workers within Premier Inn hotel at
the time of performing the task of organization. Qualified and capable employees of this
hotel will permit them in dealing with complicated situations effectively.
 Style – It shows that in which way company is managed by higher authority and top-level
manager and also in which manner they communicate with their workers. In respect of
this hotel management utilized the management style where opinions of workers are
considered valuable.
 Staff – This element is connected with the number and type of workers who are doing job
in this hotel. It involved the way where employees are motivated, rewarded, hired and
trained.

 Shared values – It is a main core of Mckiney's 7s model and it involved various norms
and standards which instruct the action of firm such as Premier Inn hotel and the
behaviour of workers in effective manner.
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set
The internal analysis of company is looks at internal elements which is beneficial for
gaining access to capabilities, assets, resources and competitive edge. This kind of study
equipped management with deep knowledge which is essential for capitalising the possibilities
and strength of organization. This study also established tactics for managing risk in the setting
of international hotel (Mendis, Jayakody and Fonseka, 2018). In aspect of SWOT analysis, it
supports company for identifying the external opportunities that can be exploited while also
recognising internal components that caused weakness. This concept put Premier Inn hotel in
standing out from various competition effectively. The framework of McKinsey is beneficial for
determining the state of alignment across procedures and department in Premier Inn hotel. It also
aids in analysis of variety of internal elements, ranging from organizational culture to its
workers, process effectiveness and leadership capabilities. The hotel of Premier Inn has
successful strategy for conducting their task with full efficiency.
P3 Applying Porter’s Five Forces model, evaluate the competitive forces of a given market
sector for a hospitality organisation
It is basically a framework which assist the organization for evaluating the strategic
directions and present competition in market effectively. The other name of this model is that
Michael Porter's framework that assist in gaining the competitive advantage in targeted market.
In context to Premier Inn Hotel this model supports them for evaluating whole profit margin and
various business opportunities in the given market.
 Threat of new entrants – In context to Premier Inn hotel they utilized some tracks for
declining the new forces and these are being utilized in market. For this hotel the delivery
of food through online mode is the new entrants which is low. Therefore, this kind of
service did not have any kind of a given goods which can be occupied.
 Bargaining power of suppliers – These are those who facilitates the raw materials to
producer for manufacturing and offered the finished products. In respect of Premier Inn

hotel, the power of the supplier is very low. Due to this there are various suppliers who
supplied the products to market segments in large number.
 Bargaining power of buyers – There are large group of buyers who have integrated
preferences and choices. In respect of Premier Inn hotel, the power of the buyers is very
high (Michopoulou and Moisa, 2019). Due to this it is necessary for hotel that they must
meet the preferences ad taste of their potential customers effectively. Threat of substitutes – There are various products which is easily replicable from other
goods and offered the same level of satisfaction to their respective clients. In respect of
selected firm there are various other restaurants also who operates their services in
market and also facilitates similar level of satisfaction. Due to this threat are very high for
their substitute goods.
 Competition of existing competitors in the industry – The hospitality industry is one
of the leading sector and competition is very high in market. That means for the
management of Premier inn Hotel threats are very high from its competitors who are
operates their services in market.
M3 Devise appropriate strategies to improve competitive edge and market position based on the
outcomes
There are different types of marketing strategies which are utilized by organization and due
to this they easily gained higher market share and growth within short duration. According to the
above analysis of model, organization easily comply with competitive market with help of
facilitating innovative goods. In this way company easily sustained their goodwill in market for
long time. Further management also suggested to maintain their growth and market share at
maximum level by comply with their suppliers for ticking brand image and also facilitating raw
materials in sufficient amount.
Part B
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given hospitality organisation
Porter’s Generic Strategies

The porters generic strategic is basically defined as the combination of various tools which
is utilized by organization for sustaining their competitive advantage in market. According to this
model the tools which is consider by Premier Inn hotel are discussed below –
 Cost leadership – It is one type of strategy where organization is focused on providing
cost effective goods as per the needs of targeted audience or market. It leads to increase
their overall revenue and sales at higher rate. In respect of Premier Inn hotel when they
utilized this strategy buyers are easily attracted in large number for availing their services
and products.
 Differentiation – In this type of strategy organization is mainly concentrating on
providing unique goods and services to their user with high quality (Peters, Kallmuenzer
and Buhalis, 2019). In respect of Premier Inn Hotel management utilize this strategy for
serving unique services and products to clients which is totally different from other
brands.
 Cost focus – It is also one type of strategy and here organization is focusing on niche
market and offered lower prices which are possible to them. Here the management of
Premier hotel will select the specific market through the effective understanding of
dynamics in market segment and customer choices. In this way firm is able to fulfil the
requirements of users in time.
 Differentiation focus – In this type of strategy management is highly focused on niche-
based market who often go for strong company goodwill. In context to Premier Inn hotel
management is highly concentrating on differentiating services which is necessary for
meet the needs of given market place.
Ansoff Matrix
It is a framework which is utilized by company for analysing the appropriate market
strategy regarding the development and growth of brand in targeted segment. In respect of
Premier Inn hotel there are different types of strategies which are discussed below -
 Market penetration – In this strategy organization provides existing goods in existing
market and their main aim is to enhance the sales of organization. They provide attractive
offers to their clients which leads increase their market in large scale within low time.
 Product development – It is another strategy and here firm is focusing on providing
offers to their new goods in existed market. Due to this the management of this company

adopted various new methods of operation and innovation, it becomes easy for them to
meet the changing requirements of target market and customers.
 Market development – In this strategy organization is concentrating on the all over
development of market as they introduced or offered their new goods in new market line.
The main motive of this kind of strategy is to develop strong customer base for
expanding their market in large size (Pratiwi, 2022).
 Diversification – It is another strategy which is utilized by organization during the time
of launching or offering new product in new market. But it is a highly risky procedure
which leads to success or failure as well.
Recommendation -
After the analysis of above model, the strategy of market development is suggested to
Premier Inn Hotel which is situated in UK. Due to the effective utilization of this strategy
company easily enhanced profit margin and popularity of their goods at large level. Due to
popularising their product the visits of the customers are highly in their hotel in various
locations. This assists them to sustain their reputation in market for long duration.
M4 Produce a strategic management plan that has tangible and tactical objectives and priorities
Vision The vision of Premier Inn hotel or restaurant is to become dynamic entity
and made innovation and creation in their products. This is the
fundamental for facilitating best quality service and offerings to users.
Mission To become a leading brand in hospitality or hotel industry which can
work towards the innovation and meet the requirements of their clients
effectively.
Strategy The strategy which is suitable for this hotel is market development which
leads to increase profit margin and popularity of their goods at large
level.
Objectives The main objective of this firm is to enhance its overall sales by 20% and
expand the market in new market segment in low time.
Tactics
(Marketing Mix)
The tactics which is used by this hotel is marketing mix method and it is
mainly consist of four stages which is described below –

 Product – Premier Inn offers different types of rooms for
different customers. For instance, its family rooms have a king
size bed for adults, two pull-out or sofa beds for kids, and a travel
cot for a baby (Rini and Ferdinand, 2021).
 Price – The organization operates their business and utilized
competitive pricing strategy for attract the customers in large
number. It leads to enhance sale in their goods effectively.
 Place – They operates their business in United Kingdom and they
easily expand their business activities outside the UK. In this way
they become leader in market.
 Promotion – Premier Inn hotel is utilized social media tool for
promoting their brand such as Facebook, Instagram, Twitter and
so on.
Implementation The premier inn hotel is required to evaluate all over considerations in
targeted market which leads to enhance brand awareness. Key
performance indicator has been used so that actual and the desired
performance can be examined.
Evaluation -

It is basically connected with the gathering of information and follow up that how to
implement a provided plan. In this way they easily have the overall consideration in targeted
market and can handle entire productivity (Ruan and Tian, 2019). Premier analysed management
of actual and desired performance of organization so that they can have the overall working of
the company in the target market. With this, all the given plan is being executed and used to
analyse the overall working with the proper execution of the plan in order to have the best
practices within the hotel premises.

CONCLUSION
After the analysis of above data, it concludes that activities in business strategy plays major
role for running the business functions in smooth manner. This report also covers the certain
business strategy which are helpful for the enhancement of the given business. In this, PESTLE
analysis is being analyzed in order to understand the positive and negative impact of various
factors furthermore, porter’s five forces are being used so that hotel can rightly choose the
strategy in order to expand in the target market and ensures the huge success and growth as well.

REFERENCES
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