Understanding Business Organization: A Case Study of Premier Inn

This case study analyzes the organizational structure, SWOT and PESTLE analysis of Premier Inn, the largest hotel brand in the UK. It discusses the advantages and limitations of hierarchical structure, the competition in the budget hotel segment, and the internal and external factors affecting the business. The report concludes with solutions for Premier Inn to grow its business.

UNDERSTANDING
BUSINESS
ORGANIZATION

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Organizational structure..............................................................................................................3
SWOT analysis............................................................................................................................4
PESTLE analysis.........................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Organizational structure refers to the alignment and relation of parts of the company,for
achieving maximum performance. The selected structure impacts the company's success for
carrying out the strategy and goals. Management must understand the features,advantages and
limitations of different organizational structure for helping in alignment of the strategy. It is the
method which helps work to flow through company. It gives groups for working together by
their individual functions for managing tasks. Earlier structures of the organization were more
formal where employees were grouped by functions,product line etc. Now a days structures are
less formal which responds quick to dynamic environment of business. The company chosen for
this project is Premier Inn which is a hotel chain in United Kingdom. It was established in year
1987 by Whitbread,headquartered at Dunstable,England,,UK. It is the largest hotel brand in UK
with more than 72000 rooms and hotels. It is operating in various locations which includes city
centres,suburbs and airports.
MAIN BODY
Organizational structure
Hotel Premier Inn has opt for hierarchical structure as it is a system with simple
reporting system which allows subordinates for understanding the roles and responsibilities with
ease. It is very beneficial for large companies and hotel Premier Inn is a big chain of hotels. By
using this system each and every employee has specific roles in the hotel and they contribute to
the objectives of the organization(Abdulaali,2018). Managers of the hotels divides the employees
in to different groups where each person have a manager who directly supervise. Managers
report to other senior managers which leads to pyramidal chain of command. The top
management of the hotels forms a C Suite which has the chief executive officer at the top by
chief financial officer and chief operating officer. All the big decisions are taken by the top
management. Directors of the hotel runs different departments of the hotel and make strategy for
making sure that the respective departments meet the goals and objectives which are pre
determined. Marketing,IT,finance,accounting,HR etc. are some of the departments. Directors are

the head of managers and provide them with instructions. Managers of the hotel are just
following their decisions of directors and supervise the low level workers for performance of
their duties. This structure works well in the organizations which provide services to consumers.
Hotel is serving to guests and the work of employees is monitored by the managers. Employees
of the company very well know to whom they haver to report as they have managers. It
centralises power and operations which eases the work of employees. Employees of the hotel are
more loyal as due tio the hierarchical structure as it states department loyalty(Bower2018).
SWOT analysis
It is the model used by businesses for knowing the internal and external factors affecting
the environment of business. It is a proven management framework which helps brands for
bench marking the business and performance in comparison to competitors(Camilleri, 2019).
Here is the swot analysis of hotel Premier Inn-
STRENGHTS WEAKNESSES
 Strong presence in UK- Hotel chain
has almost more than 800 hotels in
United Kingdom. It is serving more
than 5 million consumers every month.
It also owns hotels in other countries
like Germany,Europe also.
 Location- Hotels of the chain are
mainly located at airports and tourist
attractions and many of them are near
to universities also. It gives segments of
consumers to stay places nearby where
they are required .
 Refund issues- Hotel has been facing
issues of refund by some consumers in
parts of Wales were there is strict local
lock down. It has made consumers
unhappy.
 Issues with hygiene- Premier Inn is
also not maintaing proper hygiene in
the hotel as many consumers have
written about it. Trade unions are
expressing the concern towards it in
various meetings of hotels in United
Kingdom.
OPPORTUNITIES THREATS
 New markets- Company can develop
their business in new nations like
USA,New Zealand and many. It will
 Competitors- The main competitor are
Holiday Inn, Ibis etc. They all are
offering budget rooms segment for

give them to establish their brand name
in new markets. They can grow the
business in terms of revenue and
profits(George 2021).
 New decor- Hotel can redecorate the
hotels rooms for its guests in budget
segment. This will rejuvenate the
business and increase the foot fall of
consumers. The guests will feel new
and better in the hotel.
consumers. They are also giving
competition in price segment by
offering less prices in comparison to
Premier Inn.
 Lock downs- Due to the pandemic last
year all the hotel business was suffered
as travelling was banned. The Premier
Inn was also affected. Its sales and
profits were adversely impacted.
Company has to market its hotels again
with new marketing strategies.
From the above analysis it has been concluded that Premier Inn is the leader in budget
hotel segment. Competition is of price in this sector as many of its competitors are providing
services to their guests in cheap prices. Premier Inn has to follow competitive model for earning
profits in the industry.

PESTLE analysis
It is the model used by companies for analysing the business factors and how can they
affect the business(Konovalova and et,al., 2020).
POILITICAL FACTORS
 Travel bans- Government has strong control over the hotel sector. They make rules and
regulations for it and hotels have to follow it. For example like in covid pandemic
government imposed bans on travelling it affected the business of the hotels.
 Fear in presidential elections- As government affects the hotel industry significantly
and during elections hotel owners are required to support the candidates. If the opposite
side won the elections then it may change the policies made by previous governments
which may not be beneficial to the Premier Inn.
ECONOMIC FACTORS
 Strength of currency- The currency fluctuations may affect the business. If international
currency is lower than domestic currency than the guests will not visit the country as it
will cost them more. It will result in reduction of foot fall of guests causing less profits.
 Economic cycle- The business of hotels is affected by the economic cycle as it is the
most susceptible to the influence of it. Whenever it is facing low phase in the market
cycle it will affect the operations of the business(Huang,and et, al.,2021).
SOCIAL FACTORS
 Peak seasons issues- When ever there is festival in the nation then the large guests visit
the country,buts hotels run out of the rooms as they are booked in advance. Then hotels
may miss many customers and it will affect the profitability of the business.
 Cheap options- Many of the guests are young and tech savvy ,due to the availability of
the less priced option like Airbnb and many more. They are offering services at very low
cost in comparison to Premier Inn and affecting the business.
TECHNOLOGICAL FACTORS
 New technology- Earlier hotels were runned by the old and traditional methods and
media but by the growing use of technology like internet and social media. Hotels have to
change its ways of operating business by opting for new technology.

 Blogs reviews- Consumers who write reviews on social media and websites can make
opinions of the guests for visiting the hotel. It can be a good thing for hotels as if they
get positive reviews it will increase the consumer base of the hotel and increase the
profits.
LEGAL FACTORS
 Innkeeper laws- Premier Inn has to follow the laws for ensuring the welfare and safety
of consumers and properties. It must be mentioned in the rooms of guests. It mainly tells
about the compensation which will be payed to consumers if their property is broken or
damaged.
 Truth in menu laws- Hotel have to follow truth in menu laws as they have food and
beverages establishment which states that they must be truthful about the food served to
guests. They must be honest in terms of calories and nutritional facts(Kembauwand et,
al., 2019).
ENVIRONMENTAL FACTORS
 Local weather- There are many guest who visit with their families for vacations but if
the weather is not favourable then it may affect the business of the hotels and revenue.
 Use of sustainable energy and products- Consumers today are more environment
friendly and use products which are sustainable in nature so if the hotels opt for green
energy and products they will be attracted to the hotel more and increase the sales.

CONCLUSION
This report concludes that organizational structure helps businesses to run in a better way
by defining the roles and responsibilities of the top executives,managers and employees. It helps
organization to arrange their business operations in a proper way. There are many internal and
external factors which affects the business. Hotel Premier Inn has many advantages in the
industry which have been mentioned but is facing high competition from various hotels which
are providing services to the consumers at low price affecting the business of the hotel in terms
of revenue and profits. Different solutions were also explained in the project for how can hotel
grow its business.

REFERENCES
Books and Journals
Abdulaali, A.R., 2018. The impact of intellectual capital on business organization. Academy of
Accounting and Financial Studies Journal, 22(6), pp.1-16.
Bower, J., 2018. Whitbread: Routines and resource building on the path from brewer to
retailer. Management & Organizational History, 13(1), pp.1-23.
Camilleri, M.A., 2019. The business of tourism: An introduction. In Strategic perspectives in
destination marketing (pp. 1-27). IGI Global.
George, R., 2021. Tourism and Hospitality Marketing Principles. In Marketing Tourism and
Hospitality (pp. 3-31). Palgrave Macmillan, Cham.
Huang, A., and et, al.,2021. When artificial intelligence meets the hospitality and tourism
industry: an assessment framework to inform theory and management. Journal of
Hospitality and Tourism Insights.
Kembauw, E.,and et, al., 2019. Benefits of corporate mentoring for business
organization. Journal of Critical Reviews, 6(5), pp.101-106.
Konovalova, E.E.,and et,al., 2020. Development of forms of the hotel business organization in
modern conditions. Journal of Environmental Management & Tourism, 11(4 (44)),
pp.857-862.