Organizational Structure and Business Environment Analysis of Premier Inn

This report analyzes the organizational structure and business environment of Premier Inn, a private limited company in the hospitality industry. It includes a SWOT and PESTEL analysis of the company, as well as a discussion of the advantages and disadvantages of its hierarchical organizational structure.

CASE STUDY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Organization structure of Premier Inn.........................................................................................3
Analysis of business environment...............................................................................................4
SWOT Analysis...........................................................................................................................4
PESTEL Analysis........................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Business organization is an entity create for the purpose to support commercial enterprise,
there are many types of business organization such as sole proprietorship, partnership, join
venture, limited company, corporation etc. (Snihur and Tarzijan., 2018) Premier Inn is type of
private limited company deal in hospitality industry, located in England United Kingdom. This
company is world’s strong hotel chain. Premier Inn provides services at affordable price which
help company to retain their customer. Their unique selling proposition is comfort and quality
services; their marketing strategies are very effective to grab the market. This report highlights
the concepts of organizational structure, and discuss about a particular organization structure
with the advantages and disadvantages and also define business environment. This report also
illustrates about the internal and external factors that is SWOT analysis of company like what are
the strength, weaknesses, opportunities and threats in Covid-19. Moreover, it includes PESTLE
analysis of a company which involve factors like political factors, economic factors, social
factors, technological factors, legal factors, and environment factors with both favourable and
unfavourable conditions.
MAIN BODY
Organization structure of Premier Inn
Organization structure is a method by which task or work flows throughout the organization,
this create elements like departmentation, span of control (Remenova, and et.al., 2018), job
design, chain of command and delegation. Organisation structure affects organization activities
such as coordination, task allocation and supervision to achieve company goal or objective.
There are many types of organization structure such as functional, divisional, network, team
based, horizontal etc. and company choose structure accordingly which is suitable for their
business. Premier Inn follow Hierarchical organizational structure (King., 2020); this structure
carries a direct chain for command from top level to bottom level of organization. Top
management build critical decision which are passed down to subsidiary level. If an employee
wants to make decision so that person make request through chain of command for acceptance.
It’s like a pyramid at the top level there are some managers or boards of directors and in the mid
of pyramid there are more manager but at the bottom of the pyramid there are many workers so
each worker has a supervisor. Premier inn uses this structure because it in this industry their

main focus on customer satisfaction so they can retain them and have good marketing and image.
This structure helps employees to know their responsibility and roles. A top manager oversees
the departments in the Premier Inn, which helps in making correct decision on time. This
organisation structure helps Premier Inn in encourage employees to work, and they mainly focus
on their role, help departments and team feel confidence and self-determined. Every employee
knows whom they report so it provides clear reporting which help in making decision. This
organization structure has some disadvantage like restricted information and slow decision
making because if bottom level want to take decision but for approver they wait which may take
time (Ma, and et.al 2018). Sometimes bottom level of employees feel motivated and cannot share
their ideas which trend to slow down innovation. But this structure helps Premier Inn in
specialty, and employees are more communicative in same department and have some chance of
promotion which helps in success of business.
Analysis of business environment
Business environment is defined as the internal and external factors related to business
which can affect the operations and activities of a firm (Alonso and et.al., 2022). Analysis of
these factors is essential as it helps in controlling the actions and decisions making process
within business so that competitive advantage can be gained.
SWOT Analysis
In order to effectively implement and plan strategies and for encouraging the optimum use
of organisational resources it is required that Premier Inn must be aware about its capabilities
and internal business factors. For this purpose, SWOT analysis can be used.
Strength: The affordable pricing range and good quality services make Premier Inn a very strong
brand. Good brand value is key strength of Premier Inn which helps hotel to survive in growing
competitive rivalry (Calhoun and Douglas, 2019). The customer retention strategies, pricing and
intense marketing is also one of the strengthening aspect of the organisation which makes its
brand competitive and successful.
Weakness: As compare to other successful international chains Premier Inn has limited presence
internationally. This can act as weak aspect for the organisation because it can influence
customer decision making and retention process.
Opportunity: With improving technology and communication mediums Premier Inn has vast
opportunities to invest in digital marketing for improving customer experience and brand value.

Organisation can also explore options to undergo into strategic tie ups with other successful
brands so that Premier Inn can enhance its market value and profitability.
Threats: Competition is one of the most impactful threat which is affecting the operational
aspect of Premier Inn. In addition to this hospitality services are incorporating several new
transformations such as backpacker hostels, private rooms, capsules and many more (Hamilton
and Webster, 2018). Thus competing with such low cost and high quality choices for customers
it can be a real challenge for Premier Inn to maintain its position and high value within
hospitality industry.
PESTEL Analysis
There are several external factors which cannot be controlled by Premier Inn but their
impact is considerable in terms of Premier Inn success. For evaluation of those factors pestle
analysis is used. PESETEL analysis for Premier Inn is as follows:
Political: Political stability is one of the reasons which affect the tourism activities and
hospitality services. The regions lacking political stability used to have low opportunities for
growth and thus in such regions Premier Inn does not intend to operate or invest. Political
relations between countries can also influence the trade policies, import and export duties for
suppliers and customer retention (Atasoy, Türkay and Şengül, 2022). Thus political factors can
also play crucial role in business decisions related to expansion and growth as well as trade
agreements. The relaxation in tax duties or operational duties can affect the organisational
performance and profit margins.
Economic: The economic development policies as well as factors like per capital income and
GDP affect the pricing strategies of the organisation. If customers do not have buying
capabilities, then it will have direct impact upon performance of organisation. If organisation
does not consider these factors, then its supply chain as well as expected return can be affected.
After Covid 19, buying capability of many customers got reduced thus Premier Inn will also
have to make adjustments in pricing and services so that its profitability can be maintained
(Atasoy, Türkay and Şengül, 2022).
Social: The social changes such as increased need and patterns of travelling, social media
dependency for brand selection and booking purpose as well as communication has made it
mandatory for Premier Inn to respond accordingly. In response to the changes in perception and

choices of society organisation has to improve or update its service delivery model. The failure
to do so can make survival of Premier Inn very challenging.
Technological: The change in technology applications affect different operations of Premier Inn
such as booking system, data management, customer interaction and experience as well as
expansion strategies. If both advantages and challenges of technology are not taken into
consideration, then organisation may face various threats such as cyber security issues and poor
customer interaction. Even in pandemic situation technology made it possible to provide safe and
hygiene services by minimising the human interaction.
Environmental: The environmental changes can affect or restrict the supply chain (Bharwani
and Mathews, 2021). For quality services it is important that Premier Inn must have strong and
continuous supply network however natural calamities can affect it and this in turn can disturb
the operations. The environmental legislations related to waste disposal and environmental
consideration must also be followed by hotel otherwise it may result in legal penalties or other
consequences related to brand perception.
Legal: Legislative considerations such as employment law, workplace safety, food safety and
hygiene, Covid 19 protocols and restrictions regulate the ways in which operations are carried
out within Premier Inn. Organisation ensure that its practices are legal so that it can deliver its
responsible and socially accepted project outcomes (Kuźmicki and Kuś, 2019). If legal aspects
are not followed by organisation, then it may fail to maintain its brand perception of responsible
and quality service providing brand.
If these factors are considered in the decision making, then Premier Inn may not deliver the
expected quality service and competitive outcomes.
CONCLUSION
It can be concluded that organisation structure plays an important role in communication and
decision making ability. Thus for sustainable growth Premier Inn must focus upon improving its
structural gaps and limitations. It can also be concluded that organisation must bring creativity
and effective leadership and management strategies to optimise and use the business
opportunities. The evaluation of weaknesses and strengths will also assist organisation to
enhance its operational efficiency. The external business environment factors affect the way in

which business strategies are formulated and operations are executed. Thus for achieving success
goals organisation must identity the extent and impact which PESTEL elements have on
business. Thus it can be also concluded that for competitive survival strategies must consider
business environment factor and their impact.

REFERENCES
Books and Journals
Alonso, A.D., and et.al., 2022. Overcoming the unprecedented: Micro, small and medium
hospitality enterprises under COVID-19. International Journal of Hospitality
Management. 103. p.103201.
Atasoy, B., Türkay, O. and Şengül, S., 2022. Strategic responses of chain hotels to COVID-19
from a situational crisis communication theory perspective. Journal of Hospitality and
Tourism Insights.
Bharwani, S. and Mathews, D., 2021. Techno-business strategies for enhancing guest experience
in luxury hotels: a managerial perspective. Worldwide Hospitality and Tourism Themes.
Calhoun, J. and Douglas, A., 2019. An analysis of hospitality and tourism research: Learning
organization's (LO) influence on sustainability practices. In Sustainable Tourism:
Breakthroughs in Research and Practice (pp. 23-47). IGI Global.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
King, A.W., 2020. Considerations of scale and hierarchy. In Ecological integrity and the
management of ecosystems (pp. 19-45). CRC Press.
Kuźmicki, M. and Kuś, A., 2019. Technological environment as a factor of development for
enterprises providing accommodation services. Economic and Regional Studies (Studia
Ekonomiczne i Regionalne). 12(673-2020-005). pp.275-286.
Ma, and et.al 2018. Using deep learning to model the hierarchical structure and function of a
cell. Nature methods. 15(4). pp.290-298.
Remenova, and et.al., 2018. Span of control in teamwork and organization
structure. Montenegrin Journal of Economics. 14(2). pp.155-165.
Snihur, Y. and Tarzijan, J., 2018. Managing complexity in a multi-business-model
organization. Long Range Planning. 51(1). pp.50-63.