Organisational Structure and Business Environment Analysis of Premier Inn Hotel Chain

This report analyses the organisational structure and business environment of Premier Inn hotel chain using SWOT and PESTLE analysis. It also takes into consideration the impact of COVID-19 pandemic on the hotel industry.

Case study Premier Inn hotel
chain
TABLE OF CONTENT
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Organisational structure of Premier Inn......................................................................................2
Business environment analysis of Premier Inn hotel:..................................................................3
SWOT analysis:...........................................................................................................................3
PESTLE analysis:........................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................8
1

INTRODUCTION
Organisational structure is defined as the approach or the structure in which communication
or specific organisational activities takes place in organisation so that goals can be accomplished
in systematic manner (Chión, Charles and Morales, 2019). Organisational structure plays an
important role in the growth and success of organisation as it affect the decision making as well
as the operational aspect of the firms. Thus success of organisations greatly depends upon its
structure. In addition to the structure of organisation there are several internal and external
factors which control the decisions and actions of business.
For gaining competitive advantage it is vital that contemporary organisations must
monitor and consider these elements. This report will discuss the ways in which internal and
external factors affect business. It will also take recent Covid 19 pandemic into consideration as
pandemic has brought about huge variation in the business environment factors. The report will
evaluate the case study of Premier Inn and its organisational structure which has helped
organisation to successfully manage its functions. Premier Inn is leading hospitality service
provider which provides its services all across Britain. This report will employ models like
SWOT and PESTEL analysis to analyse the impact of Covid 19 on organisation.
2

MAIN BODY
Organisational structure of Premier Inn
The success of Premier Inn in challenging UK hospitality market is largely contributed
due to its unique business model and effective organisational structure. The hotel follows vertical
organisational structure so that it can achieve competitive benefits by effective implementation
of corporate and business strategies. In vertical organisational model a hierarchical structure is
followed. It involves a strong emphasis upon subordination, reporting relationships as well as
close management span of controlling. With vertical structure of management Premier Inn has a
centralised team which holds power and decision making authority. This type of structure leads
to several benefits for Premier Inn. The foremost efficiency which is delivered by vertical
structure is observed in communication aspect (Su, Chen and Wang, 2019). As organisation
groups its employees on the basis of their skill it enhances their efficiency and encourages
collaboration and professional expertise among team members.
However at functional level it can impose a problem because with vertical structure
employees may have effective team communication but when they interact or work outside their
team they face difficulties because they are used to interact and work in comfortable zone within
a well known team only. Thus with vertical structures it is very important that Premier Inn
emphasis on encouraging good training and development plans for interpersonal skills. Vertical
structure is also transparent and permits employees a clear path for growth (Our business model
and strategy, 2022). However for sustainable performance in this organisational structure
managers and leaders must assure that necessary efforts are put forth in balancing power. As the
levels or hierarchy increases decision making process is affected greatly and it can even affect
the quality and impact of decisions taken for competitive advantage. In long term it can also
impost a barrier in disseminating sensitive information between multiple areas of organisation.
Business environment analysis of Premier Inn hotel:
Business environment means collection of both, internal and external factors that impact
company and their smooth business process (Akhmetshin and et.al., 2017). Structure of business
directly and indirectly get influence with these environment, in many situation, success of
business directly depend on condition of environment which they deal in, both, opportunity and
threat can be identified with business environment.
3

SWOT analysis:
SWOT analysis is business tool that allow company to analyse their strength and weakness
and help them to catch opportunity which revolve around business. SWOT analyse face four
factor, these are:
Strength: Premier Inn hotel is the largest hotel chain in UK with branches all over the world,
this business provide high quality of service with finest experience to guest. Strength of Premier
Inn lies in achievement they have till now, this hotel have won several award like British Travel
Awards (GURL, 2017). This hotel have strongest customer base which allow them to survive
tough condition like COVID-19, even in intense competition and poor market condition, Premier
Inn still have title of hospitality king.
Weakness: even Premier Inn hotel is the largest hotel chain in UK but still they do not have
great capture in other foreign countries, this hotel is weak in using their brand name and
reputation. Another weakness lies in location of some hotels of Premier hotel chain, there are
many hotels which are located in unpleasant area, disturbing peaceful experience of guest. Some
online review of guest show, after COVID-19, hygiene is major issue in hotels of Premier Inn.
Opportunity: with great brand image and reputation, Premier Inn hotel have opportunity to
expand in other nation, this hotel have surplus profit which can be used in expansion process.
Doors of new market are opened for Premier Inn as they provide high quality service they can
expand to nearby countries (Teoli, Sanvictores and An, 2019). Apart from this, Premier Inn hotel
have opportunity to become industry ruler if they provide hygienic rooms to guest, after COVID-
19 people are demanding hygienic rooms. Adopting new design and decor will allow them to
win customer in the market.
Threat: competitors and its movement become biggest threat for Premier Inn hotel, competitors
like Holiday Inn, Easy Hotel and others have strong roots in hospitality industry. Hotels of
Holiday Inn are located in beautiful area allowing them to attract guest from all around the world
and even pull guest of Premier Inn. After COVID-19, this hotel find hard to survive the market
which can become biggest threat in near future.
PESTLE analysis:
PESTLE analysis allow business to examine external factors of environment which impact
smooth process of company, PESTLE analysis have six factors, these are:
4

Political factor: UK government have both, positive and pragmatic action towards hospitality
industry, as this sector is fifth largest in economy, policy of government impact Premier Inn.
After COVID-19 impact UK government have introduce new guideline to these hotel chains
including restriction on foreign guest affect Premier Inn to lose for client. Before COVID-19,
impact of Brexit was very challenging for the hotel, some policy of government like new tax
reform brought easiness in tax process of Premier Inn (Clarke and et.al., 2017).
Economical factors: the condition of UK’s economy was not stable after Brexit and impact of
COVID-19 become the biggest problem, with poor labour market condition, government
restricted entry of European labour impacting hiring process of Premier Inn hotel. UK
government knew that hospitality industry was one of the most contributing so they introduce
regional growth funds to fulfil the demand of small hotel. Premier Inn took benefit of this
scheme and actively participated in contribution of economic development.
Social factor: changing lifestyle of people after COVID-19 has become the biggest issue for
Premier Inn because due to safety and hygienic mentality, people now less likely to travel.
Living and spending capacity of people is rapidly increasing in UK which means social factor
can be beneficial for Premier Inn in near future. After poor market condition, value for money is
very high which means people now becoming less active in travelling around UK.
Technological factor: technological factor directly impact operation of Premier Inn, this hotel
have latest and fastest technology in their business operation allowing them to meet the
requirement of business operation. Guest now have habit of using latest technology, most of
hotel guest book room online which means Premier Inn need to stay active and need to strong
their presence in online world. IT service is greatly impacting hospitality industry, Premier Inn
need to keep their system updated to meet the demand of customer in the market.
Legal factors: after Brexit, minimum wage rate was rapidly increased up to 15.5% in the
country resulting growth of operation cost of Premier Inn. Day by day changes in legal factor
becoming threat for business process, this hotel find difficult to meet the policy of import and
export. After COVID-19 impact, UK government have pulled restriction on import and export
this become very favourable for Premier Inn (Perera, 2017). This hotel also needs to develop
new organizational policy to meet the demand of legal factors.
Environmental factors: sustainability is one of the most common topic which can be seen in
hospitality industry, every business of this industry need to adopt sustainability at every level of
5

their business operation. Premier Inn need to adopt sustainability in their daily business activity,
it is very clear that after COVID-19 impact, UK government is now pushing Premier Inn to
reduce food waste and try to control it. Premier Inn actively participate in Zero Carbon Emission
Economy 2040 policy of UK government.
CONCLUSION
This report has discussed impact of COVID-19 on Premier Inn and its importance in near
future. Later this report has discussed organizational structure of Premier Inn hotel and
understand how it impact business operation of this hotel. Later this report has discussed
business environment and its impact on business process of Premier Inn hotel. SWOT analysis is
being discussed in this report to analyse strength and weakness of this hotel, strength of Premier
Inn lies in brand image and reputation they have in the market. Weakness of this hotel lies in
poor hygienic quality of room and in poor location of hotel. Later this report has discussed
PESTLE analysis to examine external factors that impact business organization, this report
provide clear understanding of political factor that its impact on business.
6

7

REFERENCES
Books and journals
Akhmetshin and et.al., 2017. Analysis of innovation activity of enterprises in modern business
environment. J. Advanced Res. L. & Econ., 8, p.2311.
Chión, S.J., Charles, V. and Morales, J., 2019. The impact of organisational culture,
organisational structure and technological infrastructure on process improvement
through knowledge sharing. Business Process Management Journal.
Clarke and et.al., 2017. Brexit. Cambridge University Press.
GURL, E., 2017. SWOT analysis: A theoretical review.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Su, Z., Chen, J. and Wang, D., 2019. Organisational structure and managerial innovation: the
mediating effect of cross-functional integration. Technology Analysis & Strategic
Management, 31(3), pp.253-265.
Teoli, D., Sanvictores, T. and An, J., 2019. SWOT analysis.
Online
Our business model and strategy, 2022. [Online]. Accessed through <
https://www.whitbread.co.uk/about-us/our-business-model/ >
8