Strategic Hospitality Management: A Case Study of Premier Inn
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This report is a case study of Premier Inn, a British limited service hotel chain. It covers its mission, objectives, stakeholder analysis, PESTLE analysis, and SWOT analysis. The report aims to provide insights into the strategic hospitality management of Premier Inn.
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Strategic Hospitality Management
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Table of Contents INTRODUCTION..........................................................................................................................2 MAIN BODY...................................................................................................................................2 OBJECTIVE AND GOALS OF PREMIER INN.......................................................................2 STAKEHOLDER ANALYSIS..................................................................................................2 PESTLE Analysis of Premier inn..............................................................................................5 3 Strategic Analysis.....................................................................................................................7 Critical Evaluation of the SWOT analysis..................................................................................1 CONCLUSION................................................................................................................................2 REFERENCES................................................................................................................................3 1
INTRODUCTION Strategic hospitality management refers to generate and execute targets which can be concerned about specific business. This works focus on model that helps to create competitive benefits in industry. This aid a business to accomplish organisation goals in a well define manner that can contribute business growth(BURKE, ROBINSON and Choi, 2020).This reports is based on Premier Inn,it is a British limited service hotel chain that can operate in various locations which involves city centres, suburbs and airports. In this reports topics that to be considers is identify mission and objectives, stake holders analysis on basis of power/ interest matrix and PESTEL framework, Strategic analysis through SWOT and its features that helps to critically evaluate internal and external capability that helps to accomplish mission by the owner in an organisation. MAIN BODY OBJECTIVE AND GOALS OF PREMIER INN The mission of respected hotel is to provide high quality and placed a hotel where everyone can easily reach their potential without any conflict to entry that helps to satisfy the desire of person. The main objective of premier inn is to consider short term as well as medium haul goals for accomplish bigger target of business that aids to contribute long run growth. Basically,this can improve entire system related to customer lives as they offering extreme quality accommodation with a reasonable price that can bring a superior experience of clients in industry. To convert this goal into reality company has to make a diversify range with partners that helps to boosting consumer comfort and experience. It gives unique features that can enhance positive success across the world. STAKEHOLDER ANALYSIS A stakeholder is a person that shows their interest in company(Konovalova And et.al., 2018).It can be an individual or a team that is helpful for taking decisions of organisation. There are two type of stakeholders, for identifying these following matrix can be used. 2
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Power/Interest: High power high interest:These stakeholders are the one who can make decision that can have a extreme effect on task success. These persons are highly required in business for handling and accomplish business expectation. In case of premier inn, board of directors, owners and investors are considers in this segment. Highpowerlowinterest:Thismatrixinvolvesthosepersonwhoarekeeping satisfied(Martins, 2018).As they are not interested to get desire outcome but have to yield power. They can also use their power inadverse if if they are not satisfied. It includes governance. Low power high interest:These people are informed and assure to talk about no conflicts can arise in a business. It involves employee in this grid. Low power low interest:These are the stakeholders who can examine individuals in business. They have never waste their time and energy in gossips and communication. It consist customers who have no power also don't have interest with management success. StakeholdersImportanceExpectation Board of DirectorsIt plays a significant role in premier inn as it can operate canconductionbusiness activitiesonbehalfof organisationshareholder's.It refers to those persons who are highly connect with business andhavearighttotake decisionwhichhelpsin generating growth in business. Generatemoreprofitin business through their personal contribution and they are try to giverightadvisetoits subordinates which is helpful for business. GovernanceIt refers to that team who can generatingprocedurethrough whichbusinesscaneasily drivenwiththeiraimand It basicsneedsistogetting potential result by the help of customerworkforce, shareholdersandotherswho 3
objectiveforacquiringbest outcome(Okumusandet.al., 2017).It can create rules and policiesthatcanoperateby company for leads with ethical business practices. can bringa competitive edge in business by processing right decisions. InvestorsTheseindividualsplaysa important role in any kind of businessastheyarethe backbone of company who can pushacompanytowardsits success and growth. Industry canmaintainastrong relationshipwithinvestors. These people provide finance andcapitalinformof investmentwhichishighly required for a business. Increasedrevenueand generateextremeprofit.As they invest high money for a industry. They expected high effortsandstrong commitmentsandrequire passiontodefendtaskwith unforeseenmisshapenand undesired situations. EmployeeItisprimaryinternal stakeholders who is financial significant and investing their time for success of business. Thesepersonsarecritically helpbusinesstomeetwith specifictargets.Incaseof HotelpremierinnHuman resource is most important part who can handle management of organisation. They can work for accomplish short haul as They are working for getting rewards and recognition. They needs full trust, job security, opportunities to contribute and purposeful work that helps to attainbusinessgoals.They expectedincentives,bonus, higherappraisal,rewardsand recognitionasitaeffective way to communication within aworkplaceandenhancing confidence and motivation that 4
well as long term goal that can bringapositivegrowthin businessandderivea successful company mission. helpstohandlinghealthy relationshipwithbusiness colleagues. CustomersItreferstothosepeople throughwhichcompanycan runinmarketplace.They totallydependofsupplyof companyitemsandservices whichkeepthemin satisfaction.Itisalsoa important6stakeholderfor hotelastheyhighlyutilise businessitemsanddirectly connectwithsuccessof business. It can confirm a deal withstandardisedproduct. Hospitalityindustrysuchas premier inn includes lodge and roomsthatassistahotelto generatemorerevenueand profitthroughpayment, advance booking etc. as it can growbusinesstowards success. They are formulated with their needsanddesiretowards productsandservicesof brands(Poddubnaya, 2019).It generallyrequiredhigh customer experience, Healthy andfriendlysurroundings, desire monetary valued focus onrulesandregulation regradingcertainsituations. These persons are highly needs intermsofprice,quality, convenience, choice and ideas. PESTLE Analysis of Premier inn It is used in marketing to examine the external factors which are not in control of the company . It is a strategic framework which is used to study the outer factors which will help in corporate strategy planning.It assists in knowing themarket growth or decline ,potentialand direction 5
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for operation. It is easy and widely used instrument by marketers to examine the macro environmental factors that have an leading effect on an organisation, company or industry (earlier known as PEST Analysis). Various factors are explained below- Political Factors-A company decides to expand its operations to a all new different state to implement the policies that will affect the company's main day to day operations. The government policy interferes in the economic and other factors that can create an impact over a business. It considers the differenttrade traditions,political stability,labour law,bureaucracy,tariffs trade restrictions and tax policy. The government has a strong hold over the hotel industry if there is change in any policy of the government then Premier inn can lose the vast majority of its economy. Economicalfactors–Economicfactorsincludeeconomicgrowthor decline ,inflation,wage-rate, credit availability, cost of living and many others. These factors are determinants to an economy's performance that directly impacts a company. In case of Premier Inn, A big amount of investment is required for global investors to grow in this field. Socialfactors–Socialfactorsincludesculturalnormsandexpectation,age distribution,population growth rate ,health, media, religion, brand preferences and safety. These factors are helpful for companies to make better plan their marketing strategies. Technological Factors –Technological factorsincludes Innovations and developments intechnologies.Thesefactorsdirectlycreateanimpactonorganization'sdaily operations. if a company fails to match up the trend it may lose its place in the market. It may have a direct or indirect impact on an industry. It includes technology aspect like R and D activity,automation and many more. Premier Inn is updated 24/7 anything happens will be uploaded within few minutes and can be seen by thousands of people online. It is so quick that hotel owners can not do anything about it. Legal Factors-Legalfactors have external and internal sides both on the performance of the company. Certain laws have an impact on the business environment in a country. It includes employment laws , discrimination law,consumer protection,industry specific regulation,regulatory bodies,antitrust law,health and safety law. As per the case of Premier Inn must follow the rules and regulations that creates a safe stay for everyone to 6
survive otherwise customers will not choose this hotel. They also provide food with proper hygienic and must be truthful about food items as per the needs of guests. Environmental Factors-Environmental Factorsare mainly concerned with the effect of the surrounding environment and the influence of ecological aspects. These include water disposallaws,environmentalprotectionlaws,energyconsumptionregulation.Hotel industry is mainly under pressure of both government and environmental groups to make sure less 3 Strategic Analysis SWOT Analysis of Premier inn Premier Inn is one of the leading brand of the British hotel chain in the tourist and hospitality sector restaurant company. SWOT Analysis is a tool to determine the firm's strategic planning techniques used to help an organisation to see its strengths, weaknesses, opportunities and threats related to business survival. It is a technique that gives assessment of company's competitive position and to develop strategic planning. In the case of Premier InnSWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are external factors. This analysis is a framework which helps a company to set its benchmark with its competitors. Mainly, it is an proven management framework for a hotel like Premier Inn which is an leading brand in the tourism and hospitality sector. From the above detailed SWOT Analysis it explained that strengths and weaknesses of the Premier Inn. It is a Whitbread owned big brand. It assists in examining the strengths and weaknesses of Premier Inn is explained below- Strengths Premierinnisexploringtonew markets of different countries. It has a strong brand image over the years and a premium brand of hotels. It is considered as cheap and affordable for the customers. It is situated near airports and main touristattractions.Thiswillhelpin attracting the different segments of the Weaknesses It has refund issues that will make it difficult to fulfil customer's demand. There is less global presence as it has hotels in few countries only. High competition is the main weakness ofthecompanysometimestheyget huge bookings and not able to serve all the customers. 7
society. It has won many awards like the most prestigious organisation in the UK and Best Budget Hotel brand. It has offers for its customers while onlinebookingandItishighly advertise chain of hotels. In some cases the company is not able to fulfil the demands of the customers that will lead to the bad reputation of the company. Opportunities As the technology is getting increased day by daythat will decrease the cost of advertisement at social media. As company is doing partnership with otherindustriestodiversifyinto different industries. Astravellersarelookingfornew destinations that can be an opportunity for the Premier Inn. Itprovidespremiumservicestoits customers that will help them to attract more customers in future. Threats Holiday inn, Marriott and Ibis are the competitors of the Premier Inn and It has little control over this. External factors can create a threat for Premier Inn because increased tax will affect the profit margins. COVID-19hasaffectedbusinessall overtheworld.PremierInnwas affected badly as well. Problems like COVID-19 may arise out in future and Premier Inn has to face the shortage of customers like before. Reduction in number of tourists due to disaster, covid and terror activities. SWOT Analysis helps the company to identifies its strengths, weaknesses, opportunities and threats which will help to reduce the risks and assess the four aspects of business. It is a simple tool that will help to analyse what is best for company and devise a successful strategy for coming future. It is mainly used by business entities to accomplish the internal and external factors to take the beneficial decisions. It mainly helps the entity to gain the knowledge of current and future position in the marketplace. It elaborates the visual image of the various factors that will surely impact the business over the different objectives. Moreover, it is the foundation of the evaluation of the internal as well as external factors that affect the success. It 8
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is the most renowned tool for the entire analysis of the strategic position that will align the organisational operations . 9
Critical Evaluation of the SWOT analysis The critical analysis of eh SWOT analysis have been discussed below. The strength of Premier inn is that the organisation has a wider reach which has been helping the organisation to have a wider market reach while an increased contribution towards the market growth. Another strength of the hospitality organisation is its locations which are easily accessible and have a huge footfall of the customers. This has been helpful for the organisation in attracting customers from several segments. The hospitality brand has a better brand image which has been established with the help of several recognitions through winning of prestigious rewards. Premier Inn faces a drawback in terms of refund issues which need to be sorter out by the organisation in order to enhance its brand image in the market. If the organisation does not cope with the weakness then it will have to face severe drawbacks in the future. The Hospitality organisation is dependent upon only a limited geographical locations, in order to expand its market share and global presence, the organisation will require to expand into several markets. Another drawback or limitation of Premier Inn is that the hospitality organisation faces a huge competition from the existing competitors. The organisation can focus upon its services and products in order to gain competitive advantage within the hospitality organisation. The weakness that has been observed in case of Premier Inn is that the organisation fails to fulfil the demand of its customers and hence the organisation is required to invest upon research and development in order to conduct a market research that will help in analysing the market demands that can be further tackled by the organisation. Premier Inn has immense opportunity in context of the technological advances which have been increasing on the day to day basis through regular up gradation. Hence Premier Inn is advices to invest inthe technological advances which will help in gaining competitive advantage and also help the organisation to save its cost and efforts during the operational process. 1
Also Premiere inn has immense opportunity in order to expand and diversify its business within several markets and industries that will help the organisation to gain funds from the several other substitute sources as well. The organisation can further analyse various destinations that are still not reached by the competitors and there the organisation can gain the first mover advantage while providing premium services at the economic rates in the hospitality market. The various competitors have been into the market which tend to decrease the market share of the organisation and hence act as a threat. In order to deal with this, the organisation can focus upon the merger and acquisition options in order to expand its market share in the organisation. CONCLUSION The above report summarizes that strategy plays a very important role for businesses to achieve success and to be more and more productive. The key role played by strategy in business is to keep their business running in the long run and for which it provide critical insight and for developing appropriate strategies by studying internal and external environment of the firm. The report also consist the same, a critical review of the internal and external environment of the company's environment which will help and enable the hospitality organization in making the best use of available options in the market and grow rapidly. The hospitality environment is competitive and highly aggressive, hence the analysis of the surrounding in the industry will allow the company to be insightful and grab the most appropriate options available. 2
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(Eskerod and Larsen, 2018) (Harrison, and Wicks, 2021) (Kujala, J. and Sachs, S., 2019) (.Pelyukh, O., Lavnyy, V., Paletto, A. and Troxler, D., 2021) (. Saadi, A., Sahibi, H., Thys, S., Marcotty, T., Filali, H., Amarir, F., Rhalem, A., Kirschvink, N. and Antoine-Moussiaux, N., 2021) (Zahari, A.R. and Romli, F.I., 2019)(.Zhou, J., He, P., Qin, Y. and Ren, D., 2019.) 4