Hospitality Business Strategy

This document provides an overview of the business strategy of Premier Inn, including stakeholder analysis, macro environment impact, internal environment analysis, and strategic directions. It discusses the strengths, weaknesses, opportunities, and threats of the organization using SWOT analysis and evaluates the competitive forces in the market using Porter's Five Forces model. It also explores different types of strategic directions available to the organization, such as cost leadership and differentiation.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Overview of the Premier Inn with stakeholder analysis100........................................................2
The impact and effect of macro environment on Hotel Premier Inn and its strategies...............4
Examine the internal environment and capability of Premier Inn hotel using appropriate
framework....................................................................................................................................5
Internal environment analysis of Hotel Premier Inn (SWOT Analysis)......................................7
Evaluation of the competitive forces of a given market sector for Hotel Premier Inn using
Porter’s Five Forces model..........................................................................................................8
PART 2............................................................................................................................................9
Evaluate the different types of strategic directions available to the organization.......................9
Recommend the most appropriate growth platform and strategies through the application of
Ansoff’s Product/Market Growth Matrix..................................................................................10
Apply a range of theory and model and interpret and device strategic planning for Premier Inn
...................................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
Books and Journal......................................................................................................................13

INTRODUCTION
Business strategy refers to a plan which is formulated by an organization in order to create vision
and provide direction to the whole organization. Business strategy is an essential part of any
business as it provides future direction to the business and helps to understand the internal as
well as external environment of an organization (BURKE, ROBINSON and Choi, 2020).
Premier Inn is largest hotel chain of UK which operates in several locations of the country
including City center airports and many more. It is an hotel chain which is established by
Whitbread in the year 1987 and what premier lodge for their customers in the year 2004 to merge
with the company. This report contains stakeholder analysis and macro environmental factors
analysis of premier inn. This report also contains various strategies, models, and framework
which is been used by the company to analyze their internal as well as external environment with
several competitive forces off the market.
MAIN BODY
Overview of the Premier Inn with stakeholder analysis
Premier inn is a British company which deals with hotel chain having more than 72,000
rooms and 800 hotels in different locations. According to a survey among all the earnings of
Whitbread premier inn hotel provides 70% of those earnings. The hotel provides several type of
amenities to their customers with great customer experience. All the hotels of premier inn have
their own side restaurants where they provide all the kitchen facilities to their customers. They
operates in major countries such as United Kingdom Ireland United Arab Emirates Germany
India Jersey Isle of Man and many more. Chief executive officer of premier inn is Alison Britain
who is liable for all the operations in the hotel. The company has used several strategies to reach
at this position and use several models and framework to analyze stakeholder and macro
environmental factors for the company. The major stakeholders of the company are given below:
• Customers:
They are considered to be important business partners that greatly affect the profitability
and stability of the InterContinental Hotel. According to shareholder analysis, customers will
remain satisfied with the company. That is why main needs of the company's customers are

Creditors
Suppliers
Customers
Keep satisfied
Government
Trade Unions
Manage closely
Employees
Investors
Monitor
Owners
Community
Keep informed
standard or conditional services. To meet this need, the hotel offers its customers customized
products, it also provides flexible services to customers (Chepkwei, 2021).
• Employees:
Employees are that part of the organization which are in continuous touch with the
company and can tannish the image of the product and services offered by the organization. In
should always focus to satisfy their staff with proper salaries so that they can be able to satisfy
their other stakeholders that are customers.
 Suppliers:
Stakeholders are the ones you have some kind of interest in the business of the
organization. Suppliers also provide food supplies or other daily essential services supplies to the
hotels and in order to get quality products it is essential to maintain a good relationship with
suppliers and they should always be satisfied with the company with proper payment on time..
• Government:
Every organization need to pay taxes to the government which shows that Government
have some interest in the financial activities of the organization. According to the analysis the
government should be managed closely by any organization to achieve success.

The impact and effect of macro environment on Hotel Premier Inn and its strategies
PESTEL analysis of Premier Inn
Political-
Political factors of a country have a high impact on the profitability as well as survival of
an organization. An international organization which operates in several countries needs to face
political factors of all those countries in which they are operating. Premier inn is operating their
hotel chain in countries like India, Germany Israel and many more they need to face political
instability of all the countries which have a direct or indirect impact on the profitability of the
company (Fatima and Elbanna, 2020). Premier inn generates most of the revenues to the
company from the market of UK. Although UK is a country which is known for its good political
stability but the implications of Brexit have changed the political stability of the country and
have its high impact on the business of premier inn.
Economy
UK is a country which have low inflation rate and GDP of 7, 93,714.016 per capita. It
shows an economic stability in UK. According to a survey the company has major of its income
from hospitality and tourism sector which provides a good tourism in the economy of United
Kingdom. Premium INR is the largest hotel brand provides several services to their customers.
Good economic stability of UK helps premier in to have more and more customers in the hotel.
Social
Being a hotel brand, premier inn is highly dependent on the tourism sector and seasonal
holidays of the country. The social trends of the society to go on a vacation in the holidays helps
premier inn to develop their business. The business of the hotel is completely depend on the
trends of people. In the recent times when people are unable to travel due to the pandemic make
a tough time for hotels to survive in the market.
Technology
Increased use of technology as increase divisibility and excess of premium in to their
customers. The use of mobile apps internet browsing and computers helps the customers to make
their booking online for the hotel which helps hotel industry to increase the customers in the

organizations. The digital marketing is also helpful in which advertisement through social media
is a great method to attract more and more customers towards the amenities provided by
premium in. The company will invest in advertising and also involve digital advertising
techniques in there business which is a part of technology. Rapid growth and adaptation of
technology is change the whole environment business (Foroudi, 2020).
Legal
There are various legislations which as various amendments time to time and need to be
complied by organization to reduce legal intervention. Several legislations are also applicable on
premium in such as minimum wages health and safety legislation and many more. Premium inn
should consider all these legislation which are applicable on them which helps the hotel to
reduce the legal charges which can arose in case of any kind of error or omission.
Environmental
Change in environment has a great impact on the business of hotel industry. Climatic change
in various countries attract more and more tourist towards the holidays which ultimately increase
the revenues of hotels of that country. In addition to this premium in should also focus to provide
various benefits to the environment to create a good image in their customers. With the increase
awareness in consumers about the environment it is essential for any organization to provide
their contribution for the betterment of environment so that they can create a good image in their
customers.
Examine the internal environment and capability of Premier Inn hotel using appropriate
framework
McKinsey 7-S
McKinsey is a framework which is used by organization for internal environment analysis.
It includes 7S’s which are given below:
Strategy: The main reason behind the growth of premier inn hotel is its strategy which
focus on high quality products and services to be provided to their customers. The company has
a strategy to highly invest on advertising so that more and more customers know about the
products and services offered by them (Kiefhaber, Pavlovich and Spraul, 2020).

System: Premier inn is the finest hotel chain of UK and have efficient operating system in
their organization. ERP system online bookings products and services distribution are some of
the examples of their system.
Structure: Premier inn has good organisational structure and are constructed in several
regions of UK and other countries which help them to manage their 800 hotels.
Style: The management of premier in focused to use efficient leadership styles in their
organizations which helps them to keep their employees motivated. It will further help the
organization to provide better services to their customers and correspond the goal to make their
organization customer-centric.
Staff and Skills: Premier inn provides continuous training to their staff in order to
improve their skills related to the hospitality full stop there are also involved in providing
important guides, forums and online training sessions to their employees which enhance their
skills and help them in their development.
Shared value: Performance of premier inn is depended upon 5 shared values which helps the
organization to create positive working environment and include:
 Do something different
 Higher goals
 Work with coordination
 Do what is right
VRIO analysis for analyzing the strategically capability of InterContinental Hotel
Valuable
Premier inn is largest hotel brand of UK and focus to provide finest services toi their
customers (Singh and Dhankhar, 2020). It creates a value or a brand image in the mind of their
customers over any other hotel chain.
Rare:
Not all the hotels have on-site restaurants to provide food to their customers but the
presence of onsite restaurants in all 800 hotels makes them where from other hotel chains.

Imitability (barriers to compliance):
The unique services provided by the premier inn imitable and it is a great barrier in the growth of
urbanization there are several hotels which are established with similar services provided to their
customers at affordable prices.
Organization (ability to use a resource or ability):
Premier inn offers several premium services to their customers such as premium lodges which
helps them to attract more and more customers towards their organization.
Internal environment analysis of Hotel Premier Inn (SWOT Analysis)
Strengths Weaknesses
 Premier inn wins Hotel Chain of the
Year award in the British travel
awards (Sota, Chaudhry and
Srivastava, 2020).
 The hotel is the largest hotel brand of
UK which have nearly 700 hotels with
more than 50000 rooms.
 The hotel spends a lot too highly
advertise their locations and provide
several offers and deals to their
customers if they book online.
 Apart from this premier inn also
known for numerous awards which de
win for becoming finest hotel chains
of UK.
 There is intense competition for
premier inn in the market which
results in low margins in the
profitability.
 Although they are globally present but
they are not as elaborate as other
international hotel chains are.
Opportunities Threats
 With the increased use of
digitalization all over the world the
 Rapid increase in the competition in
hotel industry purchase holiday in

company has a great opportunity to
invest and digital marketing strategies.
 As they provide good customer
experience they can build more brand
value in the market.
 Brand image in the market for the
hotel as increase there are chances for
more strategic tie-ups.
easy hotel and many more create a
threat for the organisation.
 Rapid increase in the competition in
hotel industry purchase holiday inn,
easy hotel, and many more create a
threat for the organisation.
Evaluation of the competitive forces of a given market sector for Hotel Premier Inn using
Porter’s Five Forces model.
Porter’s five forces model Threat of new entrant
In order to enter into the hotel line a company requires to face strict licensing and
requirements which are applicable on hospitality industry by the government policies
(Tweneboah-Koduah, Anning-Dorson and Nyamekye, 2020). Hence it is hard for new
entrants to join the hospitality industry which stops the organisation to take entry in
hospitality industry. Hence premier inn has lowest threats from new entrants in the market. Threat of substitute
Although there are very substitute for the products and services offered by premium in but
the services which are provided by premium inn helps the customer to have a remarkable
experience from their visits. It cannot be substituted by the competitors and reduces the threat of
substitute for the company. Bargaining power of buyer
There is a high competition in the market and notes of organisations are involved in the
industry for the same business. The suppliers in the industry for selling the products and services

are high which increases the bargaining power of buyers in hospitality industry. Hence, in case
of premier inn the buyers have high bargaining power. Bargaining power of supplier-
There are many suppliers in UK who are involved in supplying various products and services
to the hospitality industry. High number of suppliers available for premier inn in the market
reduces the bargaining power of suppliers in the market of UK for premier inn. Industry rivalry
There are so many hotels which are involved in the same business and provide competitive
services to the customers. High degree of competition in the market from companies like
Holiday inn creates industry rivalry for the company premier inn.
PART 2
Evaluate the different types of strategic directions available to the organization
Porter's generic strategies
This strategy is used by any organization to identify various various that can used to
achieve their goals and objectives. Premier inn also uses porter generic strategy to formulate
effective strategy for the organization.
Cost leadership: Premier inn offers various services and products to their customers at
affordable prices which help them to attain leadership in the market. Providing low prices to the
customers will help the company to gain competitive advantage in the market.
Differentiation: In this strategy the company offers unique product or services to their
customers which helps them to be differentiated among their competitors. Premier inn is
involved in continuous innovation to retain the interest of their customers
 Focus: This is strategy of porter's generic strategy focus on both cost as well as
differentiation. Premier inn provides customer oriented services in which they have
complete focus to fulfill the needs and wants of their customers. In order to retain their
loyal customers with them the company provide unique services to make the visit of their
customers remarkable at affordable prices (van Rheede and Lim, 2020).

Recommend the most appropriate growth platform and strategies through the application of
Ansoff’s Product/Market Growth Matrix
Ansoff Matrix of Premier Inn
Basic Meaning Premier Inn
Market penetration Market penetration refers to a
strategy of an organisation in
which they provide more
offers in the same market to
increase their sales.
Premier inn can attract more
customers towards the hotel
by providing numerous offers
and vouchers for their visit so
that they can arrange revisit
of their customers and attain
competitive advantage in the
market.
Product development Product development strategy
refers to introduce innovation
by developing and providing
new products and services to
their customers in the market.
Innovative product or service
provided by premier inn will
help the organisation to
improve their brand image
and known for their unique
product or services in the
marketplace. Taking an
example of a unique service
which has been provided by
premier inn only can make
the visit of their guests
remarkable.
Market development Market development refers to
the situation in which an
organisation offers same
product but in new market in
Premier inn is a large hotel
chain and open their new
portals in various market such
as their establishment in

order to expand their business
in another market (Varelas
and Apostolopoulos, 2020).
Germany.
Diversification Diversification refers to the
situation in which a product
enters into New Market with
new product or service offer
to their customers to increase
their market share.
Premier inn open their hotels
with in hotel restaurant
facilities to their customers in
various locations which is an
example of diversification by
them.
Apply a range of theory and model and interpret and device strategic planning for Premier Inn
In order to devise the strategic planning of premier in the company has used strategic model
which helps them to apply suitable strategies in the business. The numerous factors which are
included in this framework are given below
Low price and low value added: This strategy is used by a company to provide various services
to their customers at minimum prices. The variance of this strategy are given below:
 Low price: Premier inn provide there several services at low prices to became market
leader.
 Hybrid: In this strategy premier inn use both strategies of low pricing and differentiation.
 Differentiation: In this strategy premier inn provides innovative product or services to
their customers such as on-site restaurants in in their all hotels.
 Focused differentiation: In this strategy premier inn does not consider their price and it
will be high and maintained the quality of their operations. This is strategy is used by
premier inn at taking advantage globally.
 Risky high margins: In this variant the company takes high risk in some cases in order
to manage their margin in profitability.
 Monopoly pricing: This strategy helps numerous companies call to control prices in the
market according to their convenience (Varelas and Apostolopoulos, 2020).

 Loss of market shares: It is a situation in which a company loses their loyal customers
in the market due to high competition.
CONCLUSION
The above discussion helps to conclude that strategic planning is very essential for any business
to grow and develop in the marketplace. In case of strategic planning business strategy plays an
important role as a strategic planning is completely based on business strategy used by the
organization. It has been concluded that in order to formulate an effective business strategy it is
essential to analyze the internal and external market of an organization with the use of several
models and frameworks provided for this purpose.

REFERENCES
Books and Journal
BURKE, K., ROBINSON, P. and Choi, M., 2020. Developing meta-strategies for hospitality
experiences. Managing Hospitality Experiences, p.141.
Chepkwei, A., 2021. STRATEGY IMPLEMENTATION IN HOSPITALITY INDUSTRY:
GLOBAL PERSPECTIVE. Journal of Strategic Management, 6(1), pp.33-45.
Fatima, T. and Elbanna, S., 2020. Balanced scorecard in the hospitality and tourism industry:
Past, present and future. International Journal of Hospitality Management, 91, p.102656.
Foroudi, P., 2020. Corporate brand strategy: drivers and outcomes of hotel industry’s brand
orientation. International Journal of Hospitality Management, 88, p.102519.
Kiefhaber, E., Pavlovich, K. and Spraul, K., 2020. Sustainability-Related Identities and the
Institutional Environment: The Case of New Zealand Owner–Managers of Small-and
Medium-Sized Hospitality Businesses. Journal of Business Ethics, 163(1), pp.37-51.
Singh, L. and Dhankhar, D., 2020. ICT-based Marketing and Profitability in Tourism and
Hospitality Organizations in Indian Scenario. In The Emerald Handbook of ICT in
Tourism and Hospitality. Emerald Publishing Limited.
Sota, S., Chaudhry, H. and Srivastava, M.K., 2020. Customer relationship management research
in hospitality industry: a review and classification. Journal of Hospitality Marketing &
Management, 29(1), pp.39-64.
Tweneboah-Koduah, E.Y., Anning-Dorson, T. and Nyamekye, M.B., 2020. Impact of
customization and innovation on hospitality firms’ performance. Journal of Hospitality
Marketing & Management, 29(1), pp.106-120.
van Rheede, A. and Lim, A., 2020. Understanding Corporate Responsibility in the Hospitality
Industry: A View Based on the Strategy-as-Practices. In Sustainable Hospitality
Management. Emerald Publishing Limited.
Varelas, S. and Apostolopoulos, N., 2020. The Implementation of Strategic Management in
Greek Hospitality Businesses in Times of Crisis. Sustainability, 12(17), p.7211.