Understanding Business Organisation - Case Study

Read this case study on the organisational structure and business environment analysis of Premier Inn Hotel. Get insights on SWOT and PESTLE analysis of the hotel industry affected by Covid-19.

Level 0 Guide – Case Study
2021/2022.
Understanding Business
Organisation
1

Table of Contents
1 Introduction.............................................................................................................................3
2 Organisational Structure of Premier Inn Hotel.......................................................................3
3 Business Environment Analysis of Premier Inn Hotel.............................................................4
3.1 SWOT Analysis – ..............................................................................................................4
3.1.1 Strength.....................................................................................................................4
3.1.2 Weaknesses...............................................................................................................4
3.1.3 Opportunities............................................................................................................5
3.1.4 Threats.......................................................................................................................5
3.2 PESTLE Analysis................................................................................................................5
3.2.1 Political Factors.........................................................................................................5
3.2.2 Economical Factors....................................................................................................5
3.2.3 Social Factors.............................................................................................................6
3.2.4 Technological Factors................................................................................................6
3.2.5 Legal Factors..............................................................................................................6
3.2.6 Environmental Factors..............................................................................................6
4 Conclusion...............................................................................................................................7
5 References ..............................................................................................................................8
2

1 Introduction
The term business organisation refers the business structure and how the goals are met
in the organisation. In simple words, the business is designed for profit generation or to
improve the society. When the organisation is looking for the social improvement through
arts, education etc. is considered as the business. The business organisation comes under the
law that how it is operated and provides the flexibility to the management. The report has
been discussed on the Premier Inn Hotel which is a British hotel chain and the largest brand
in the UK having 72,000 rooms and 800 hotels. In the variation of the locations the hotel is
operated involving city centres, airports and suburbs. In 1987 the hotel was introduced by the
Whitbread as Travel Inn to compete with Travelodge. The headquarter is situated in
Dunstable, England, UK (Abednego, A. and Syah, T.Y.R., 2019). The Premier Inn has been
affected due to Covid-19 as the customer purchasing power declined due to loss in their job
and with the lock down the sales of the hotel is been affected. In the report the discussion is
on the organisational structure of premier inn and business environment is discussed by
including the SWOT analysis and PESTEL analysis which has been affected due to Covid-
19.
2 Organisational Structure of Premier Inn Hotel
The organisation structure describes how the organisation activities are divided,
grouped and coordinated among the employees and managers. On the design of the
organisation the structure involves the roles, rules and responsibilities. The premier inn uses
the organisation structure of hierarchical which is shaped in the pyramid form. From top to
the bottom the chain of command is followed and each employees have the supervisor. In
such structure the roles and responsibilities of department remains the same and well-
functioning is maintained. At the executive level it comprises of owner and general manager
which set the standards and policies for the hotel and for the implementation of standards and
policies is delegated to the general manager (Babu, M.V.M.S., 2020). The general manager
has the responsibility of managing the day-to-day activities and oversee the functioning of
several departments. In such the assistant manager is right hand of general manager which
provide support in number of tasks. The mid-managers of hotel include the position of front
desk, food and beverages, sales, housekeeping, marketing manager etc. In the hierarchical
3

structure different layer of management is represented which has many leaders. The span of
control is narrow with less number of subordinates. The pathway of communication is long
which moves in chain of command. The organisation will be benefited with this structure as
manager have tight control on employees, area of business will manage closely and excellent
progression of opportunity is produced. It has a benefit of defining better level of authority
and responsibility. The employees are leads to chance of promotion by providing motivation
with clear paths. The drawback is with the increase in bureaucracy the innovation or
important changes are slow down. The lower level employees feel they have less ownership
and cannot express their ideas for company which takes long time for decisions (Garriga
Ferrer, M., 2020).
3 Business Environment Analysis of Premier Inn Hotel
The business environment are the marketing terms which refers the forces and factors
that has affect on the firm's ability. It comprises of internal and external environment which
4

have the affect on the organisation functioning. The business environment helps in
identifying the opportunities, tap useful resources and business overall performance, growth
is improved.
3.1 SWOT Analysis –
The company's competitive position is evaluated by using the strategic planning
technique which helps in assessing the internal and external factors as well as current and
future potential. The SWOT Analysis of premier inn hotel are-
3.1.1 Strength
It is the most profitable hotel in the UK which risen its operating profit by 7.4% (mba
SKOOL, 2011-2021). It establishes a reputed brand image with the strong presence. It has the
strength of providing various offers and deals for online booking to the customer and free
WI-FI facility. Due to pandemic the hotel was able to gain the customers back with the help
of its high reputation and started earning profit in the same way as was earlier before Covid-
19 by providing the all the safety measures to the guests (Holt, M., 2018).
3.1.2 Weaknesses
It has the limited global presence which is the weakness for premier inn in
comparison to other markets as operated in limited number of countries (Howandwhat, 2021).
It has the intense competition having small margin for the brand. The premier in has the big
the issue with the hygiene which is the weakness as housekeeping staff uses the same towel
for cleaning the bathroom. The hotel faced the drawback in low sales and growth due to
pandemic as there was less visit of the customers.
3.1.3 Opportunities
After the successful entry in Germany the premier inn has the opportunity of new
market of exploring more countries and got republic of Ireland. In the budgeted hotel
segment the guest are surprised with the opportunity of new décor. The premier in hotel has
the opportunity of attracting the large number of customers as various countries people are
steeping out for vacations to have relaxation from the pandemic condition and lock down as
the customers are looking for the sanitised rooms for stay (Mayer, C.H. and Boness, C.M.,
2020.).
5

3.1.4 Threats
The premier in has the threat of facing competition from various competitors such as
Travelodge hotels Ltd, Holiday inn within the same category of budgeted hotel segment
(Howandwhat, 2021). The premier inn can face the threat if proper measures of safety is not
taken in food preparing which ultimately will affect the brand image keeping in the mind the
Covid-19. The lock down also affected the premier inn.
3.2 PESTLE Analysis
It defines to the framework of macro-environmental factors used for the environment
scanning. A market research is conducted to get an overview of different external factors and
provides the understanding of market growth. It is an effective framework used in strategic
planning and helps in identifying pros and cons of business strategy.
3.2.1 Political Factors
This factors are related to the government intervenes in economy which involve the
factor of trade restrictions, political stability, tax policy and tariffs. The corporation tax has
decreased with the government influence which puts an unfavourable impact on the premier
inn (Marketing Audit, 2020). The hotel is affected favourably with the objective to increase
the opportunity of tourism with the positive collaboration with UK government. The political
party of UK sets the travel ban which will affect the hotel and tourism industry of premier inn
due to Covid-19.
3.2.2 Economic Factors
It has the impact on the economy and performance which affects the profitability and
company. It involves the factors of employment, interest rates, foreign exchange rates,
inflation rates. The impact of the currency on the hotel can be favourable or unfavourable a
weaker pound or dollar will increase visitor in USA and UK cheaper. The hotel is also
affected with the change in the economic cycles. The government helps the hotel by
decreasing the taxation for sometime due to affect from pandemic (Rajamanthri, S., 2021).
3.2.3 Social Factors
To understand the customer needs and wants the marketer helps in identify emerging
trends and focus on social environment. It involves the factors of demographics, cultural
6

trends, change in lifestyles etc. The hotel is affected unfavourably with the change in cultural
trend and customer preferences. The Airbnb affected the premier inn due to change in
consumer preference such as pricing, taste and in accommodation (Swapna, B., 2018). The
demand for the services increases on the seasonal holidays such as Easter bank, Christmas as
people are more likely to spend money on this periods.
3.2.4 Technological Factors
The hotel is affected with the rate of technological innovation and development which
includes the factors of automation, research and development. In the premier inn the
development of new technology affects the hotel favourably and 24/7 services are provided
with the help of internet such as WI-FI, Online booking. The hotel becomes competitive due
to travel sites as people can shop prices and reviews can be read which affects favourably and
unfavourably in the growth of hotel.
3.2.5 Legal Factors
The demand for the product and company operations is affected with the legal laws
and legislation. It includes the factor of consumer law, discrimination law, health and safety
law. The premier inn is required to comply with the health and safety legislation and offer
equal opportunities within employment. Due to Covid-19 the people have the fear of eating
foods from outside or in restaurants as they think the proper sanitisation and safety measures
has been taken or not (PESTLE Analysis, 2021).
3.2.6 Environmental Factors
This factors influence the surrounding environment and ecological aspect is impacted.
It includes the factors such as climate, recycling procedures, sustainability. The premier inn is
affected unfavourably with the global climate change due to disruption in transport especially
rail network as a result of flood and the cancellation of the flights, close of rail network the
hotel lost customers. The owner understands the seasonal differences and pricing of the room
is adjusted for the guests which affects favourably and helps in increasing sales and growth
(Thamaraiselvan, N and et.al., 2018.).
7

4 Conclusion
The conclusion has been made that the organisation structure has the impact on
business of premier inn hotel and tasks are completed efficiently by using the hierarchical
structure. The organisation structure helps in increasing the sales and due to pandemic the
company is taking safety measures to gain the opportunity of attracting more customers by
giving them proper sanitisation facility. From the SWOT analysis the premier inn will
remain leader in the UK segment as it has the opportunity of high brand image whereas face
the threat of competition. The PESTEL analysis shows premier inn experience competition
with other hotels and various external factors affect the functioning & operations of the hotel.
The analysis of the external factors helps in knowing the impact on market and consumer
demands. The hotel premier in has suffered lot in the situation of pandemic and due to lock
down the hotel doors were closed. With the help of strength it used the opportunities and
attracted more customers back.
8

5 References
Books and journals
Abednego, A. and Syah, T.Y.R., 2019. Implementation of SWOT analysis in hospital
management using the JKN-KIS service concept. Russian Journal of Agricultural
and Socio-Economic Sciences, 2(86), pp.171-176.
Babu, M.V.M.S., 2020. Assessment of Development Opportunities for a Water Purification
Start-up in India.
Garriga Ferrer, M., 2020. Business plan of Nanotarg: a technological platform aiming to treat
pancreatic cancer.
Holt, M., 2018. The Common curriculum: its structure and style in the comprehensive school.
Routledge.
Mayer, C.H. and Boness, C.M., 2020. Experiences of Chinese and Tanzanian cooperation in a
Chinese organisation in Tanzania. In Chinese Organizations in Sub-Saharan
Africa (pp. 204-233). Routledge.
Rajamanthri, S., 2021. Current trends of HRM towards effectiveness of the
organisation. Archives of Business Research, 9(5).
Swapna, B., 2018. Cultivation and Marketing of Tuberose (Lily) Flowers by the Rural Poor:
An Approach of Swot Analysis. International Journal of Agriculture, Environment
and Biotechnology, 11(1), pp.137-140.
Thamaraiselvan, N and et.al., 2018. Evaluation of employee brand using typological analysis
in Indian airline organisation. International Journal of Business Excellence, 16(4),
pp.478-496.
Online
mba SKOOL, 2011-2021 [Online] Available Through
<https://www.mbaskool.com/brandguide/tourism-and-hospitality/14052-premier-
inn.html>
Howandwhat, 2021 [online] Available Through <https://howandwhat.net/swot-analysis-
premier-inn-premier-inn-swot-analysis/>
Howandwhat, 2021 [online] Available Through <https://howandwhat.net/swot-analysis-
premier-inn-premier-inn-swot-analysis/>
Marketing Audit, 2020 [online] Available Through
<https://premierinnmarketing.wordpress.com/2014/02/06/pestel-analysis/>
PESTLE Analysis, 2021 [online] Available Through< https://pestleanalysis.com/pestle-
analysis-for-hotel-industry/>
9

10

11