Business Strategy for Premier Inn: Internal and External Analysis

This report provides an internal and external analysis of Premier Inn, including PESTLE and SWOT analysis, competitive environment analysis using Porter’s Five Forces model, identification of existing and potential competitive advantage, and valid strategies and tactical objectives to achieve overall strategic objectives.

Unit 32 – Business Strategy

Table of Content
Introduction p
Part A: An internal and external analysis that provides a platform
for strategic decision making: p-p
1. PESTLE and SWOT of the organisation and an evaluation of the
organisation’s resources and capabilities p
2. Competitive environment analysis using Porter’s Five Forces model
p
3. Identification and justification of the organisation’s existing and/or potential
competitive advantage p
4. Valid strategies and tactical objectives to achieve overall strategic objectives
p
Part B: On the basis of this analysis critically evaluate and justify
strategic options for the organisation: p-p
1. Critical evaluation of the different types of strategic directions available to
the organisation p
2. Justification and recommendation of the most appropriate growth platform/s
and strategies p
3. Evaluate ways and means by which the chosen strategy/ies can be
monitored in order to ensure success p
5.0 Conclusions p
References p

Introduction
Premier inn in particular is a well recognized as well as, well- established brand name in the
United Kingdom in particular. It has gained its name all throughout the years in the hospitality
industry in particular and has also been in the industry for a long duration as of now
(Loughnan., 2020). This report in particular states or provides information regarding the
external factors that particularly impact the working as well as the performance of the
company in particular. First, in the report PESTEL analysis is done of the company to
understand the external factors. Then SWOT analysis is conducted and the Porter's five forces
model is also applied for understanding the internal factors and the competitive environment of
the company in particular. Also, the existing and also the potential competitive advantage that
the company has in particular is also discussed in the report. And lastly, the tactical objectives
and the strategies used by the company are also discussed below in the report in particular and
also the most suitable ways are recommended for implementing and monitoring these
strategies in particular.
Part A: An internal and external analysis that provides a platform
for strategic decision making:
1. PESTLE and SWOT of the organisation and an evaluation of the
organisation’s resources and capabilities
Determining and evaluating the overall environment under which all the business functions take place
in particular (Teoli, 2019). This evaluation can particularly be done through the application of the
PESTEL analysis and the SWOT analysis in particular. These help or support in providing the
appropriate and accurate knowledge of the aspects of micro and the macro environment in particular.
The analysis of Premier Inn is done as follows;
SWOT analysis
This is particularly a tool or a technique or a method which is used by almost every business
to understand and evaluate the external as well as the internal environment of the business in
particular. It basically evaluates the strengths, the weaknesses, the opportunities as well as the threats
that the company in particular has. Through understanding the weaknesses the business can easily
apply strategies that will help the business in the elimination of such weaknesses and same goes with
threats as well (Puyt, De Graaf, and Wilderom 2020).
Strengths of the business:
 Premier Inn is a well- known company and also has trust and loyalty of its customers in
particular. Which inclines the individuals in the market towards the company.
 The company also has good employee retention, which has a major positive impact over the
working and the goodwill of the company in the market in particular.

 The company also offers the best services to its customers in particular, through offering
options in affordable and little luxurious comforts too. Which makes the target market of the
company wider.
 The company Premier inn has technical innovations for the purpose of enhancement of the
experience of the customers and also to upgrade the levels of business processes in particular.
Weaknesses-
 There are limited market share of the company in the market in particular which impacts the
brand image of the company on major basis.
 The company is mainly dependant in the market of the United Kingdom in particular. The
company is totally based on the UK market which is a major disadvantage for the company in
particular.
 The company has a very high amount of the debts which is recorded in the year of 2015. The
debt rate was around the year 5 billion, involving the debt in the US.
Opportunities-
 The brand particularly has a major scope of further expansion in the global market in
particular. This can particularly be done through focusing more on the research and
development of the hotel in particular.
 There is high potential for the company in the market in particular.
 The enhanced level and requirements of digitalization an also better usage of technology in
the company.
 The company can also particularly introduce the services of the organization or the hotel in
particular in the mid- level as well as in the higher class too by making services more
luxurious and premium as well.
Threats
 as the organization operates all over the United Kingdom in particular, but different places
have different types of individuals and diverse thinking processes in particular. This makes
the working of the company unstable.
 There is wide competition in accordance to the price point in particular.
 There are major threats observed in the hotel chain in particular like the issues that are ethics
related in particular and feedback from the customers is also majorly impacting the
performance as well as growth of the organization in particular.
PESTLE analysis

PESTLE analysis is also a tool or technique which basically stands for the political, economic,
social, technological, and the legal factors present in the external environment of the company that
specifically affect or impact the working as well as the performance of the overall company in
particular (Madsen, and Grønseth, 2022).
Political factors-
These are the factors that are generally related to the politics of a particular country. And specifically
to the country in which the company is particularly operating in. Premier inn particularly operates
within the market which is very large scale and therefore the company is exposed to major risks in
particular. First of all the Brexit which is the exit of the UK from the European union has impacted
the hotel a lot.
Economic factors-
These factors are basically related to the economic conditions of the country in particular. These
factors are very relevant and also important for a working of the company and directly impact the
activities or the operations of the hotel in particular. Premier inn should focus on the people who have
stable income in particular.
Social factors-
These factors in particular are related to the things that relate to the latest trends, cultures, life cycles,
fashions, etc. As a brand name that is well recognized in the market in particular the revenue of the
company can majorly be affected or impacted by the factors such as the growth rate, cultures,
consumer demographics, gender ratio, etc.
Technological factors-
These factors in particular are related to the technologies that are particularly implemented within the
organization that are evolving on consistent basis and also are making the lifestyles of people of the
society easier in particular.
Legal factors-
The legal factors of the company are also majorly related to the factors which specifically connect
with the laws of the country that the company in particular is operating within. Premier inn should
also give relevance to the laws related to the Covid- 19 in different countries in particular.
Environmental factors-
The environmental factors are basically the factors that are related to the environmental conditions in
particular. The company Premier inn has particularly involved itself in the protection of the
environment in particular.
2.Competitive environment analysis using Porter’s Five Forces model
PORTER FIVE FORCES

This technique or framework in particular is usually used by a number of businesses in particular
when there is a major requirement of analysing the macro environment in particular. This is majorly
done to identify and evaluate the competition present within the market of the company in particular
and its impact on the working of the company as well (Hole, Snehal, and Bhaskar, 2019).
Threats of new entrants-
Premier inn is basically a hotel that is wide- ranging and also operates all over the United Kingdom and
is slowly expanding to different countries as well (Carraher, 2018). For a new entry it is very difficult
to compete with a well- known brand name like this. Thus, the brand has no such threat.
Rivalry amongst existing firms-
The hotel particularly offers services that are affordable to their customers in particular, which makes
similar businesses the competitors of the organization in particular. Businesses like Edinburg collection,
Jurys inn and Travelodge hotels are the major competitors of the Premier inn.
Threat of substitute-
The major threat of substitutes to Premier inn in particular is when the individual wants luxury over the
amount that he or she is paying in particular to the company they are accommodating in. because then,
the customers can switch to other substitutes in particular (Bruijl, and Gerard, 2018).
Bargaining power of buyers-
Premier inn basically provides services to the customers that are wanting affordable accommodation
mainly and also with luxuries if the requirements of the customer are relatable in particular. The power
in the hands of the customers is more. Because the people can switch to other hotels if the rates and the
requirements are not fulfilled by the hotels.
Bargaining power of suppliers-
The power that the suppliers have in this case is generally low as the Premier inn hotels purchases from
more than 2000 suppliers in particular. Hence, there is always a back up option for the hotels to lay
back on if some of the suppliers have issues regarding any of the things. Therefore, the bargaining
power of the suppliers is less.
3. Identification and justification of the organisation’s existing and/or potential
competitive advantage
The competitive advantage of the company in particular is that the company is particularly and
specifically providing services and accommodations that are affordable and also luxurious but not to a
major extent. The company is not focusing on a particular target audience only. This makes the target
market of the company more huge and also wide in particular. Through this the company is able to
grasp the attention of more people and mainly serve people of different income levels and requirements

too. The customer services of the hotel Premier inn is also very nice. And this can be used as a major
competitive advantage for the company. This will increase the number of customers within the
company.
Also, the company has used digitalization as well as the technological advancements of the companies
in particular at major levels. This has helped and supported the company to gain competitive advantage
as there are many companies who still have not implemented digitalized techniques within their
companies in particular. The hotel is particularly well- established and also this inclines the customers
in the market. Hence, techniques and methods that are newly implemented by the organization will be
accepted by the customers due to high trust and loyalty towards the company.
Another competitive advantage that the company in particular has is the costing strategy of the
company. It usually supports the company in the process of determination of the aspects that normally
help in the attainment of the advantages over the competitors of the company in terms of the costs of
the services that are provided by the company in particular. One of the very required aspect in the
current times is the technological advancements within the companies in particular. It is very necessary
for companies to work in a way which is technologically advanced and enhanced in particular. Premier
inn works in a very well- mannered way in regard to this approach. The technology implemented within
the organization or the hotel is advanced and is also changed as per the demands of the customers
within the market.
4. Valid strategies and tactical objectives to achieve overall strategic objectives
These are basically the set of objectives or strategies in particular that focus on the key purpose of
achievement of the organizational objective or goal in particular (Górska-Warsewicz. and Kulykovets.,
2020). The major strategy of Premier inn as a well- established name in the hospitality industry in
particular is to enhance and promote sustainable travel and tourism in particular. This is particularly done
by the company through implementing the policy of travelling with purpose for their customers. This also
reduces the levels of negative impact from the side of the company on the environment in particular and
mainly also enhances the loyalty of the customers towards the company. This is because the individuals
or the customers in the market feel that the company is taking initiative for the betterment of the
environment and the society in particular. Hence, they should support the company, this also increases the
levels of revenue generation within the company in particular.
Part B: On the basis of this analysis critically evaluate and justify
strategic options for the organisation:

Every business that runs in a market particularly desire their companies or organizations to be lasting and
stable in the markets that are highly competitive as well as ever-changing in the world today. Similarly,
the Premier Inn hotels wishes the same thing. The grand hotel chain wants to become the leader of the
market and rule the market by covering most of the areas with its establishments. The Inn has already
achieved a lot but in order to achieve more and grow its business more and more in the coming times, the
Premier Inn can try considering the strategies of Porter generic. Porter generic is a framework that
involves 3 main strategies which are widely used by many organizations worldwide (Firoz Suleman,
Rashidirad and Firoz Suleman, 2019). These strategies help the businesses to grow outstandingly and
make the businesses stand strong in the market. Here are the three main strategies:
The cost leadership strategy
This strategy is the most widely used strategy in the business world. There are many businesses
that use cost leadership strategy to rule the market and attract large number of customers towards itself.
With this strategy in a business, the full concentration is laid on cutting the cost of the products in order to
serve the customers in the market with the least price possible (Anwar and Shah, 2021). This helps the
companies to retain their customers for a longer period. The strategy focuses on maximizing the sales and
minimizing the profit. Here Premier Inn offers great comfort and a luxurious experience to its customers
wh8ich had already created a good image of the brand in the eyes of customers. But to grow more and
increase the sales, the Hotel can cut short its prices of per night stay and attract good amount of customers
to the Inn.
The differentiation strategy
The differentiation strategy makes a business unique and distinct from other businesses. A
business is said to be unique when either the services of the business are unique or the products of the
business are different from others in the market. This strategy pay emphasis on making a business distinct
and stand-alone in the market with a good customer base. Here Premier Inn offers good and satisfactory
services to its customers which make the customers visit again and again. But the hotel chain can
definitely indulge and introduce something extraordinary in its business to serve something explicit to its
customers. This differentiation strategy can enhance the customer base of the hotel even more and make
the business reach new heights.
The focus strategy
Focus strategy enables a business to set a focus on a particular kind of market, they can be any
specific market or niche market (Ali and Anwar, 2021). This strategy targets the customers from the

market and then lets a business target accordingly. Here the Premier Inn has a premium customer base
mostly targets rich section of the market who are usually booking the hotels online. The focus strategy is
also further divided into two more strategies namely:
4. Cost focus strategy
5. Differentiation focus strategy
Cost focus strategy: The cost focus strategy is engaged with the businesses focusing on lowering the
costing of their products and delivering everything at very low prices to their customers for the sake of
ruling the market and enjoying the benefits of great sales.
Differentiation focus strategy: Differentiation strategy is engaged with the bushinesses being unique and
selling everything that no other business deals in. It ensures guarantee success to any business that adopts
this strategy. Here the Premier Inn can also indulge in something extra provide its customers with
something that no other hotel chain provides.
1. Critical evaluation of the different types of strategic directions available to
the organisation
In today's world every company on some or the other day plans on increasing the sales of the business
and plans to attain growth on a regular basis. These companies set new and different goals and then
work on achieving those goals. The more the people are aware about the business, the more the
business is expected to get sales and perform wonderfully. Similarly, Premier Inn, being one of the
largest hotel chain of UK can also make the use of right strategies and can take the business to
another level. The hotel chain can implement the Ans-off matrix framework in its business and enjoy
the benefits of these strategies.
Ans off matrix is a framework that is used all over the world by the analysts in order to help the
businesses to grow. The framework holds a grid of strategies which makes a business to perform
wonderfully in the market. Here are the following strategies of the Ans off matrix:
Market penetration:
Market penetration is concerned with enhancing the current sales count in the current market of
the business (Dawes, 2018). This can be done by applying any method, the company can also indulge in
advertising for the sake of increasing the sales in the market. Here, Premier Inn has a set customer base,
but the hotel can also increase its sales more and more by applying different strategies. These can be any,
the Hotel chain can either advertise or can come up with different seasonal discounts to attract good
number of customers.
Market development:

This strategy is associated with introducing a whole new market to the company. Under this
strategy, a business targets a whole new market which the business finds appropriate for its products. The
market development strategy involves risk but is also very beneficial (Cleberg, 2019). Premier Inn
already operates in great market and covers a great area of it. To expand even more, expand even more
the Hotel chain has a good image so it has almost no risk in developing a new market and thus, should
definitely consider this strategy.
Product development:
Product development is concerned with the innovating and presenting a new product to the
market. In this strategy a huge investment is there, so in order to avoid any losses in the future the
business should first plan on testing the new product in the market and then concentrate on the further
manufacturing. Here, Premier Inn serves to the premium customers, so introducing even more high
class service will keep the interest of the customers aligned with the hotel, but introduction of any
low class service will harm the entire image of the hotel's brand.
Diversification:
This strategy holds the maximum risk when compared with the other strategies. In this strategy
both the market and the product are new. The company plans on adding both the new market and the
new product to its business. Here, only the companies that hold good in the eyes of market should
consider this strategy as there are high chances of failure. Premier Inn is the most famous hotel chain,
so the company should diversify its services as it will only turn out to be positive for the company and
plus it will increase its revenue generation.
2. Evaluate ways and means by which the chosen strategy/ies can be
monitored in order to ensure success
Strategies are made in order to assure a bright future of an organization. The strategies that
lead to no improvement are of no sense therefore, the strategies should be made appropriately
considering every little factor and impact. As making the strategies is very important for the
businesses, similarly monitoring them is also an essential part that every business should consider.
Through the monitoring the businesses can check the effectiveness of the strategies made and can
also check whether the strategy is going in a right direction or not. Premier Inn being a huge business
should definitely consider monitoring the strategies that it makes for the future success. So for the
following concern, Premier Inn can use Balance scorecard. It is the performance metric that is used
for identifying and improving the functions of a business (Syahdan, Munawaroh and Akbar, 2018).

This is used for measuring the performance of the business. Here are the following perspectives of
the balance score card that will help in assessing the effectiveness of the strategies:
Financial performance: A business's financial performance represents the actual working of a
business (Agarwal, 2020). A good financial performance indicates efficiency and good productivity
of a business. By checking the financial performance here, Premier Inn can easily monitor its
strategies and mend them accordingly.
Stakeholder performance: Stakeholder performance is linked with financial projection. Here the
business can analyse the stakeholders' performance first and then after mend the strategies for the
future.
Efficiency: Evaluating the strategies become an essential step as that will enable the business to
know what all changes have been occurred and are the strategies going on a right track or not. Here,
Premier Inn should also evaluate the internal environment of the Hotel chain and then take actions
accordingly.
Organizational capacity: In here, business go through its actual capacity, analyse it and then plan
strategically.

5.0 Conclusions
From the above report it has been analyzed that making business strategies is the first and
foremost thing that a business should do. Premier Inn is a huge hotel brand and covers a huge area of
market with its establishments. The report presented a SWOT and PETLE analysis to identify the
environment of the company, porter five forces, justification of the competitive advantage and various
other strategies that the Inn can consider in order to grow more and more.

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