Pestle Analysis of Travelodge

Business and Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................1
LO1..................................................................................................................................................1
P1. Types and Purposes of Organisations .............................................................................1
P2. Size and Scope.................................................................................................................2
LO2..................................................................................................................................................5
P3. Relationship between organisational functions................................................................5
LO3. ................................................................................................................................................7
P4. Positive and Negative Impact of external factors.............................................................7
LO4..................................................................................................................................................9
P5. Internal and External Analysis.........................................................................................9
P6. Interrelation of strengths and weakness with macro factors .........................................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment refers to the combination of external and internal forces that has
impact over business operations and functioning. These factors includes suppliers, customers,
social, political, legal, economical, and other factors that has influence over the organisational
processes. This report is based upon Travelodge which is UK based private limited company and
it operates in the hospitality and hotel industry (Anolfatto and MacDonald, 2019). This report
includes various types of organisation and the purposes towards which they operate their
business activities. It also covers size, scope, legal structure and organisational structure of
various enterprises. It also includes interrelationship between different organisational functions
and its link to organisational structure and objectives. Further, it covers positive and negative
impact of external environmental factors upon business operations by using PESTLE analysis.
At the end, it includes internal and external analysis of a particular organisation for identifying
company's strengths and weakness by applying SWOT analysis.
LO1
P1. Types and Purposes of Organisations
There are various kinds of organisations and each of them has various purposes and
objectives towards which they operate their business activities. These enterprises are categorised
as private, public and voluntary organisations. All of them has different objectives and legal
structure which are elaborated as follows-
Private Organisation- It is defined as an association, corporation, individual, agency or
partnership that is not a public entity and carry on its operations for the purpose of achieving
profits. The example of private enterprise that can be taken is Travelodge, which is UK based
business enterprise which deals in hotel and hospitality services (Birru and et. al., 2019).
Purpose- The objective of private organisation is to achieve profits by providing goods and
services in return.
Legal Structure- The legal structure of private enterprises are elaborated as follows-
Sole Proprietorship- In this, a person or individual operates all of its business activities
and is determined as a solo owner of this entity.
Partnership- This kind of organisation is an agreement and contract that exist between
more than one individual that work together achieving business objectives.
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Limited Liability Companies- Such business entity has various owners and the generated
profit is distributed among them.
Public Organisation- Such enterprises are operated and owned by government with an objective
for providing certain services to society. The example of one of the public enterprise is BBC
which is a broadcasting channel of UK (Crane and et. al., 2019).
Purpose- The main purpose of these organisations is not to make profit by providing customers
with high quality services.
Legal Structure- Public organisations follows certain legal structure which is elaborated as
follows-
State Government- In this, all the processes and activities of a business are owned and
operated by state government.
Central Government- Here, all the activities are incorporated by central government of
UK.
Local Government- At this level, all the business activities are incorporated by
municipality's government structure or nation itself.
Voluntary Organisation- These enterprises operates its business operations and activities for a
specific social cause. These organisations are also known as non-profit companies as they do not
operate their activities for earning profits. The example of voluntary organisation can be taken as
Wellcome Trust which is an UK based organisation that work for improvement of human and
animal health.
Purpose- The objective of voluntary enterprise is to serve the society by providing them certain
benefits and perks.
Legal Structure- The legal structure of voluntary enterprise is elaborated as follows-
Charitable company limited by guarantee: It is company with limited liability which is
registered under the company house.
Trust: These are incorporated by trust deed and they do not have any statutory
framework (Cyphert and et. al., 2019).
P2. Size and Scope
Each organisation is different on various basis such as size, scope, legal structure, aims,
objectives, organisational structure, and so on. The description of the following organisations
with their different characteristics have been provided as under:
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Basis Travelodge BBC Wellcome Trust
Introduction It is a private limited
company of UK that
provides hospitality
services all over United
Kingdom and has
around 500 hotels in
UK, 11 in Ireland, 5 in
Spain (Zhou and Wen,
2019).
It is the oldest British
based broadcasting
channel that provides
news and information
to people all over the
world.
It is a London based
research charity that
funds research for
improving animal and
human health.
Background details This enterprise firstly
launched in United
Kingdom and has
opened first branch at
Barton.
It came into existence
on October 18, 1922
by a leading wireless
manufacturers.
It was established in
1936 by Sir Henry
Wellcome with a aim
to improve health of
animals and human.
Products/Services It provides hotel and
hospitality services
across UK, Ireland, and
Spain.
It provides
broadcasting services
such as wide range of
television
programmes, services
and content for its
audiences all over the
world.
It provides various
services such as
vaccines, epidemics,
preventing mental
health, snakebite
treatments, artificial
intelligence for health
benefits, etc. (Xu and
Koivumäki, 2019).
Size It is a large size
enterprise that has
around 11,000
employees working
under it.
It is large scale
enterprise that
provides broadcasting
services at
international level and
has around 22,401
This enterprise is
medium size enterprise
and have employees
around 2,057.
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employees.
Scope It has a wide scope as
the number of tourists
is increasing day by
day for both personal
as well as business
purposes (Sousa and
Rocha, 2019).
It has broad scope as
people trusts in its
brand name and
moreover people
always wants to get
informed with the
latest happening.
It has wide scope as it
is using latest
techniques and
innovation for
improving animals and
human health.
Vision Its long term vision is
to become number one
hospitality industry
that provide high
customer satisfaction.
Its vision is to become
the most popular and
trustworthy
broadcasting channel
and be ahead of its
competitors.
Its long term vision is
to make the world a
healthy place to live in.
Mission Its mission is to attract
customers by providing
them high quality of
customer service.
Its mission is to act in
public interest through
providing them
relevant information.
The mission of this
enterprise is to attain
better improvements in
health by supporting
the brightest minds.
Objectives Objective of the
company is to make
improvements in the
customer satisfaction
level.
Objective of this
company is to provide
public with the best
possible services at
affordable prices.
Its objective is to raise
more funds for the
purpose of improving
health of workers.
Organisational
Structure
Its organisation
structure includes
CEO, Board Chairman,
CFO, COO, CTO,
legal and secretary, etc.
It includes CEO, one
chairman, 8 directors,
and so on (Shukla and
Pattnaik, 2019).
Its organisational
structure consists of
CEO, directors,
trustee, shareholders,
and so on.
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Legal Structure This company is
private limited
company under the
company's act, 2013.
Royal charter of BBC
is determine as
constitutional basis
that elaborates its
mission, objects and
purposes. It also
determines
corporates governance,
regulatory
arrangement which
consists BBC Board's
composition and roles.
This is legal under
company's act, 2013.
Stakeholders Its stakeholders are its
guests, managers,
shareholders,
employees, and so on.
Its stakeholders
includes reporters,
viewers, broadcasting
team, workers, and so
on.
Its shareholders
includes trustees,
managers, social
workers, patients,
needy people, and so
on.
LO2
P3. Relationship between organisational functions
It is vital for each enterprise to maintain a good relationship between its different
organisational functions for the purpose of achieving business goals and objectives. In
Travelodge, these functions together helps the company in achieving its goals efficiently and
effectively. So, the description of this interrelationship between organisational functions are
elaborated as follows-
Marketing With Production Department: Marketing departments is directly in contact with
customers and has appropriate knowledge about customers needs and demands in an enterprise.
So the interrelationship between them plays a major role as marketing department provides
estimation regarding demands and needs of customers in order to carry on production procedure
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as per their demands and needs (Dutta and Dutta, 2019). In addition, marketing department will
also provide information to production department about the changes that takes place in market
and consumer needs, so that the product can be provided accordingly and could be able to catch
more market share.
Finance and Human Resource Department: The interrelationship among these departments is
equally vital as there is a requirement of people in finance department at Travelodge Hotel. So
HR department is concerned with filling the vacant posts in a business enterprise and must be
clear about skills, knowledge and qualities which are required in a person for filling up a post.
Finance department provides funds to HR department so that all the activities related to
recruitment, selection, training etc. can be conducted in effective manner. On the other hand, HR
department provides skilled employees to finance division that helps in carrying out financial
activities appropriately. So, this department also plays a major role as decisions made by Finance
and HR department will have large impact upon overall performance of this company as
appropriate candidates will provide accurate results and in case HR Department does not make
selection of right candidates, it will not possible for the company to survive in the market
(Gaganis, Pasiouras and Voulgari, 2019).
Finance and Marketing Department: Both of these departments are interlinked with each other
as for carrying out various activities, financial resources are needed which are provided to
marketing department by finance department. This results in appropriate functioning of
Travelodge's marketing department and helps in smooth running of its business activities. When
there is non availability of financial resources, then tasks will not be performed with ease and it
will have negative impact upon department's performance and company as well.
The interrelationship between these departments in Travelodge Hotel will help it in
achieving various objectives and goals of a business as appropriate functions and proceedings of
each department will help in completing the work on time and marketing department will
provide information on time to time about existing demand of goods and services in an
enterprise. By this information, production department will able to carry on production procedure
in more appropriate manner. This will also result in completing all tasks on time of various
departments. Efficient work can be attained by appropriate relationship between departments and
it will lead to achievement of certain objectives and goals of an enterprise in more effective
manner. By this manner, the positive relationship existing between departments of Travelodge
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will help the enterprise in providing positive results and it can have negative impact if the
relationship will be negative (Huang, Ran and Liu, 2019).
(Source: Organisational Chart, 2019)
LO3.
P4. Positive and Negative Impact of external factors
Macro environmental factors includes all those external factors that has impact over
functioning of a business enterprise. In order to identify them, Travelodge can use PESTLE
analysis as follows-
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Illustration 1: Organisational Chart, 2019

Political- It consists of tax policies, trade tariffs, price policy, fiscal policy, etc. which are
charged by national authorities during the financial year and it has influence over situation of a
business to a high level. For instance, a great extent will motivate enterprise such as Travelodge
for enhancing its profitability.
Positive- Due to stable political conditions of UK, this enterprise do not need to make any
changes in its policies and concentrate upon developing business of an enterprise.
Negative- This entity operates its services at various geographical location and due to
this, it will be negatively impacted by differences in rules and regulations of different places by
different government. This will have negative affect upon its activities and operations (Lu, Wang
and Xu, 2019).
Economical- It considers deflation, inflation, rate of foreign exchange and others which
has impact over business activities of an organisation. For example, United Kingdom is suffering
from high recession so Travelodge business is slowing down its economic growth. Fluctuations
in currency will affect the tourism which has affect over this company.
Positive- In UK, national authorities try to reduce tax rate which can positively affect
constitution of economy of different location where its business is operated.
Negative- Because of economic recession, the GDP of country will impact negatively on
the economic condition of the company as well.
Social- This macro environmental factor includes culture, value, tastes, preferences,
culture, needs of customers, etc. For instance, individuals who belong to different culture and
religions have different preferences and demands. For instance, Travelodge offers long lasting
products that assists the travellers in booking their room at a cheap rate. In UK, most people
books their room with the help of online mediums according to their preferences.
Positive- As with the help of fulfilment of customers tastes and preferences, it will be
possible to make get positive impacts on the working of the organisation.
Negative- It will be related to ignoring the needs and demands of customer or offer bad
services to customers that will impact negatively upon sales and profits of the company (Quinlan
and et. al., 2019).
Technological- These days, there are certain enterprise that uses great technology which
has impact upon company's functioning. Technology helps in indicating research and
development, automation, artificial intelligence, and so on. Travelogue can use technology in its
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online booking by launching a mobile friendly application that will help their customers in
booking up a room.
Positive- Technical factor has positive influence upon this company as it will result in
maximising the customer base and sales.
Negative- In Travelodge, maximum utilisation can affect the company in negative
manner as it will maximise the cost of a company.
Environmental- It includes geographical location, global changes, climatic change,
weather, rules and regulations of environment and so on. Travelodge appropriately follows
environmental laws in its business activities and operations (Rofiq and Pramono, 2019).
Positive- If company will properly follow the laws relating to environment in its business
activities, then it will not cause any harm to environment. It will enhance the profitability and
productivity of a company.
Negative- If it will not follow any environmental law then, it will have negative impact
upon society and atmosphere. It will reduce the gross income and sales of an organisation.
Legal- It includes certain regulations, rules, legislations and policies which are developed
by government of a specific nation with a purpose that enterprise will operate and function in an
appropriate and structured manner. For instance, Travelodge's management follows the anti
discrimination and equality law that provides equal opportunities to its employees.
Positive- Travelodge's administration will efficiently follow the equality law that has
positive affect upon business in making proper business environment and developing a
workplace which is discrimination free.
Negative- According to the Advertisements Act, it is illegal to make superstitious
advertisements as they distract customers from reality that will impact negatively on the working
of organisations and will make them liable to have severe consequences.
LO4
P5. Internal and External Analysis
Internal and external analysis in an organisation can be done by using SWOT analysis as
follows-
SWOT analysis
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It is significant provision method that is utilised by an organisation for assisting a
company or individual in identifying strengths, weaknesses, opportunities and threats
(Sewchurran, Dekker and McDonogh, 2019). SWOT analysis for Travelodge is provided as
under-
SWOT Analysis of Travelodge
Strengths Weaknesses
 It offers wide range of services such as
family rooms, double rooms, online
booking, etc. which are affordable and
budget friendly. Moreover, it also runs
certain programmes for its premium
customers.
 It uses latest technology in its various
business processes and provide certain
facilities to its customers.
 It has developed Travelodge green
programme that helps in reducing
carbon foot print and making its
services more eco-friendly.
 Although it offers various services but,
it fails to offers certain services such as
concierge, porter and room service
(Travelodge's SWOT analysis, 2019).
 It fails to meet customer expectations
by providing them limited services
which makes it lacking behind from its
competitors.
Opportunities Threats
It can use latest technology and innovation in
its customer service. It can also renovate and
change its rooms interiors by using different
themes.
 Its competitors are its threats that
provide similar services to customers.
Also, changes in government rules and
regulations also can create barriers in its
functioning.
 Another threat for this organisation is
entry of new companies that deal with
similar and more innovative services in
an organisation.
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P6. Interrelation of strengths and weakness with macro factors
For accomplishing maximum advantage, Travelodge are required to monitor its strengths
and weaknesses and develop strategies in accordance and has been provided as under:
Political: Political stability of UK can be considered as company's strength as it allows
Travelodge in formulating long term policies which has proved to be company's strength.
(Shukla and Pattnaik, 2019).
Economical: Economic recession in UK is a weakness for this company while reduction
in taxation rate has proved to be its strength. It is favourable in respect of this company as it
helps the company in providing various services to its customers.
Social: The social environmental factor can be considered as a weakness to Travelodge.
This organisation is not completely meeting the customer's expectations as it is not able to
provide certain services to customers such as room, porter and concierge service. It is not able to
meet changing needs and demands of customers.
Technological: Technology has proved to be strength to this organisation as it uses latest
innovation and technology measures in its various services. By developing mobile friendly
application, it has enabled its customers in online booking and online payment method.
Environmental: This factor has been recognised as a strength to Travelodge as recently
it has launched Travelodge green programme which is running for so many years. It aims in
reducing carbon footprint and by using energy efficient light bulbs in its hotel rooms. Moreover
it uses smart meters that helps in managing green performance of the hotel.
Legal: This factor is strength for this company as this organisation follows certain legal
laws such as equality laws and anti discrimination laws in which all the employees are treated
equally in all aspects such as gender, caste, creed, customs, nationality, and so on.
CONCLUSION
From the above report, it can be concluded that business environment is the important
aspect of business growth of an organisation. There are various kinds and purposes of companies
such as voluntary, public and private in market. The interrelationship between various
organisational functions can create favourable impact upon company's functioning as each
function is related with each other. PESTLE analysis helps the company in determining external
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environment's impact upon business. SWOT analysis helps the company in knowing about their
weak and strong points along with opportunities which they have to inherit and threats which the
company needs to eradicate. The interrelation among external and internal environment is
important for identifying both positive and negative influence of company's business.
.
REFERENCES
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Dutta, S. and Dutta, C. S., 2019. Green business opening and its significance in the present
climate change scenario-a study. ZENITH International Journal of Multidisciplinary
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Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
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Huang, J. L., Ran, S. and Liu, M., 2019. Vocational interests in a global business
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p.224.
Lu, Y., Wang, H. and Xu, X., 2019. ManuService ontology: A product data model for service-
oriented business interactions in a cloud manufacturing environment. Journal of
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Quinlan, C and et. al., 2019. Business research methods. South Western Cengage.
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Studies Journal. 22(1). pp.221-236.
Sewchurran, K., Dekker, J. and McDonogh, J., 2019. Experiences of embedding long-term
thinking in an environment of short-termism and sub-par business performance:
Investing in intangibles for sustainable growth. Journal of Business Ethics. 157(4).
pp.997-1041.
Shukla, M. K. and Pattnaik, P. N., 2019. Managing Customer Relations in a Modern Business
Environment: Towards an Ecosystem-Based Sustainable CRM Model. Journal of
Relationship Marketing. 18(1). pp.17-33.
Sousa, M. J. and Rocha, Á., 2019. Skills for disruptive digital business. Journal of Business
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Xu, Y. and Koivumäki, T., 2019. Digital business model effectuation: An agile
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Zhou, P. and Wen, W., 2019. Carbon-constrained firm decisions: From business strategies to
operations modeling. European Journal of Operational Research.
Online
Travelodge's SWOT analysis. 2019. [Online]. Available Through:
<https://toughnickel.com/industries/Travelodge-Comprehensive-Business-Analysis-and-
International-Expansion-Plan>.
SWOT analysis of BBC. 2019. [Online]. Available Through:
<https://www.marketing91.com/swot-analysis-bbc/>.
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