Organizational Structure and Business Environment Analysis of Premier Inn Hotel

This case study analyzes the organizational structure of Premier Inn Hotel and conducts a business environment analysis using SWOT and PESTLE analysis. It discusses the strengths, weaknesses, opportunities, and threats of the business.

Case Study

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Organizational structure of Premier Inn Hotel................................................................................3
Business environment analysis of Premier Inn Hotel......................................................................4
3.1 SWOT ANALYSIS...............................................................................................................4
3.1.1 Strengths...................................................................................................................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...................................................................................................6
3.2.3 Social factors............................................................................................................6
3.2.4 Technological factors................................................................................................6
3.2.5 Legal factors.............................................................................................................6
3.2.6 Environmental factors...............................................................................................7
Conclusion.......................................................................................................................................7
REFERENCES................................................................................................................................8

Introduction
Premier Inn is one of the most popular hotel chain businesses in the United Kingdom which
has a wide network in the industry. The brand has a significant market share in the hotel industry
and is considered as the preferential for the customers. The hospitality industry giant provides
comfortable rooms and delicious food services to the customers in order to improve their
engagement towards the business. The brand is operating around 800 hotel chains in the UK
market and has an effective image among the customers which is useful in order to increase their
engagement towards gaining the services of the business.
The business offers its services in different locations which are near to popular places such
as airports, city centres, etc. in order to increase the popularity of the hotel chain in the market
(Benzaghta and et.al., 2021). A positive business environment may be provided by the
organization to their employees in order to improve their productivity and achieve better quality
of output in the industry. The current case study will include the organizational structure of the
Premier Inn Hotel, Business environment analysis consisting of SWOT and PESTLE analysis
which will describe the internal and external factors having an impact on the organization.
Organizational structure of Premier Inn Hotel
The Premier Inn Hotel has a tall structure where the work is appropriately delegated among
different departments and areas in order to properly organize the different areas of the business
management. It is a structure where the power of decision making is distributed among various
departments in order to focus upon individual functional areas and improve the productivity of
the business in the industry. With the help of this organizational structure, Premier Inn Hotel is
able to manage their organization appropriately and increase their growth opportunities in the
business environment (Abdel-Basset, Mohamed and Smarandache, 2018). There are different
factors that are significant for the organization in this type of leadership style and increases the
efficiency of the business to produce better results.
It provides clarity to the workforce for properly managing their work and improve the
overall profitability of the business in the competitive environment. It may provide a structures
hierarchy system for the management in order to maximise the quality of output in increase the
engagement of the customers towards the brand. There are certain drawbacks of this concept
such as ineffective communication due the availability of many employees which may have a

negative impact in properly managing the employees properly. This aspect may create issues for
the business in order to stay sustainable in the business as the decision making process may take
longer time due to the inputs of a more people. It may make the management process
complicated and expensive due to the various costs that are required in operating a tall
organizational structure.
Business environment analysis of Premier Inn Hotel
The business environment comprises of the external and internal factors of a business which
may have a significant impact on the business and may create several issues in order to increase
the productivity of the company (Möller, Nenonen and Storbacka, 2020). It is helpful for an
organization to analyse its business environment for preparing effective strategies and reducing
the negative impact of these factors on the business.
3.1 SWOT ANALYSIS
SWOT analysis is considered as an effective framework which helps explains the different
internal factors that have a significant impact on the overall performance of the organization in
the industry (Cepel and et.al., 2019). By analysing these factors the organization may be able to
manage their resources effectively and increase the growth opportunities of the business in the
market.
3.1.1 Strengths
The organization has a strong presence in the market of UK having a significant
competitive advantage in the industry which is a major strength of the business in order to
maintain their financial stability even the Covid-19 pandemic (Stverkova and Pohludka, 2018).
The hotel chain has good occupancy rate which is beneficial for the organization for reducing the
negative impact of various factors such as inflation and political instability in the UK.
3.1.2 Weaknesses
The limited presence of Premier Inn Hotel in the global market may be a major weakness
for the organization which may have a negative impact on the international market share of the
business in the hospitality industry. There are some issues related with the redfund policy of the

organization which may reduce the customer satisfaction and may be the reason of the
vulnerability of the business.
3.1.3 Opportunities
The expansion of the hotel in the new and attractive market may be a crucial opportunity
for the business to convert. Various developing nations may provide land at subsidised rates for
foreign businesses which may increase the opportunities for the business in order to increase its
international market share (Kuznetsov and et.al., 2019). The new and innovative ideas for
renovating their hotels may attract the customers towards their business and increase their
engagement towards enjoying the services provided by the business.
3.1.4 Threats
The main competitors of the Premier Inn Hotel such as Easyhotel, Holiday inn etc. may
have a significant market share in the industry and these businesses may reduce the competitive
advantage of the business in the industry. The pandemic may create threats for the businesses as
the hospitality industry is the worst affected by the phenomenon.
3.2 PESTLE ANALYSIS
It has been considered as that tool that is mainly used in order to analyse the external
environment of the organization (Wang, Chen and Chen, 2018). External factors have been
analysed that are not in the reach of the organization and this needs to be understand so, the
negative impacts of the factors can be minimized. Here is the PESTLE analysis of the Premier
Inn.
3.2.1 Political factors
This refers to that factors that has been arrived due to the change in the policies of
government. With regards to the government influences increase in the tax rate leads to decrease
the profitability of Premier Inn. The organization have to pay the high tax rates that directly
impacts the profitability of the hotel. Thus, in this manner the political factor has influenced the
hotel.

3.2.2 Economical factors
It has been found from various studies that, economic fluctuation leads to impact the
operations of the Premier Inn. During the recession period the excessive pressure has been
created over hotel in order to increase the extent of services (Fernández, Cala and Domecq,
2019). As a result, the prices of the services becomes high that impacts the customer interest.
light change in economy creates the economical factor that further impacts the Premier Inn.
3.2.3 Social factors
This refers to change in taste and demands of the customers. This factor plays crucial role
as change in the taste of the customer can shift them towards competitors. During the holidays
the organization gets the opportunity in terms of increasing their profit. However, if the wants
and desires of the customers has not been pre-analysed then, it often reduces the extent of
services and impacts the profitability.
3.2.4 Technological factors
This factors are linked with the changes takes place in technology. Premier Inn is a
hospitality organization that needs to assure a keen focus over adopting technology so, the
effectiveness in the services can be added. This factor has provided major benefit to the Premier
Inn. As with the increase in technology online bookings by the customers has been increased that
leads to increase the services of the hotel. Thus, this can be said that technological factors have
been proven effective enough in regards to increasing the profitability of the hotel.
3.2.5 Legal factors
This factors are aligned with the change in legislation that directly impacts the services of
the organization. Legislation related to minimum wage rate needs to be apply by the Premier Inn.
Otherwise, it leads to create penalties for the organization. Along with this, health and safety
legislation that ensures the safety of employees and customers at the hotel has been adopted by
the company.

3.2.6 Environmental factors
The changes that takes place in environment can lead to create the major issues for the hotel.
For example: Global climate change leads to impact the hotel (Sainaghi, 2020). Pandemic has
impacted the services of the hotel and created the huge loss for the hotel. Thus, in this manner
environment factor has impacted the Premier Inn and impacted the operational activities.
Conclusion
According to the above case study it has been concluded that the business has been able to
gain better advantage in the industry having a significant market share and an effective image in
the market of UK. The tall structure that has been adopted by the business for managing their
daily operations has been useful in order to make the optimum use of the employees and the
resources that are available with them (Al-kfairy, Khaddaj and Mellor, 2019). By evaluating their
business environment with the help of strategic analysis tools such as the SWOT and the
PESTLE analysis, the business has been able to prepare effective strategies in order to reduce the
negative impact of these external and internal factors on the business.
The organization have been able to develop various opportunities and gain competitive
advantage in the industry with the help of these strategies. The Premier Inn Hotel has been able
to improve their overall approach of their business towards working with the help of these
strategic analysis tools. The company have found opportunities of expansion in the international
markets by making effective changes in their traditional approach of working.

REFERENCES
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