Premier Inn: Competitive Analysis and Value Chain

Premier Inn Report

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................4
Analysis of competitive environment by making use of Porters five forces...............................4
Analysis of inbound, operations and outbound logistics.............................................................6
Analysis of two supportive activities in Porters value chain of Premier Inn...............................7
Key value adding activities with Justification.............................................................................8
Conclusion and reflection................................................................................................................8
REFERENCES..............................................................................................................................11

INTRODUCTION
Premier Inn is basically the British hotel chain as well as largest brand of hotel in UK
being established in 1987 by Whitbread. IT has its headquarter in Dunstable, United Kingdom.
This hotel currently operates in more than 23 countries and have its branches spread across the
various geographical locations. This hotel has more than 73000 rooms as well as have around
800 hotels of its own. It generally operates the hotels within variety of the locations and mainly
includes city centers, airports as well as suburbs. Thus, this hotel is present in large number of
locations which provides it a great competitive advantage and has made it among the largest
brands of hotels. The chain of Premier Inn is usually found in north of the Scotland to the
Helston, Cornwall in South-west England. The other various locations in which it has its
business are United Arab Emirates, Qatar, and Germany. Thus, Premier Inn has become of the
most renowned and well-known hotel in UK which have a great brand awareness.
The major and key competitors of Primier Inn are Holiday Inn, Easyhotel as well as Ibis.
Besides this, it remain in a strong competition with hotel Marriott and some other independent as
well as small hotels. This company was mainly established with the main to compete with
Travellodge(Moreno-Izquierdo, Ramón-Rodríguez and Perles-Ribes, 2016). Whitbread mainly
this hotel in the year 2004 and thus merged it with the Travel Inn and got a new name which
was Premier Travel Inn. It was then shortened to another name Premier Inn. This hotel basically
accounts for around 70% of the earnings of Whitbread. The current market share of Premier Inn
is around 13.2% with a rise in the average profit to around £225 million from 2018 to 2019. The
current sale of Premier Inn is around £16.8 million and thus have gained a great market share
from past few years.
Premier Inn offers a wide range of services as well as products to their customers and is
mainly known for providing high quality services. Premier Inn has around 72000 rooms across
the world and each of their room are divided as per the suitability of customers like deluxe room,
ultra deluxe rooms, normal rooms etc. Each and every room of this hotel mainly features en-suite
bathroom, Kingsize bed, super-comfy double bet, remote control TV as well as coffee making
facilities (Moreno-Izquierdo, Ramón-Rodríguez and Perles-Ribes, 2016). Along with this,
Premier Inn have their own restaurants accompanied by the hotel which provides an array of
facilities to their customers like breakfast, dinner etc. In short, Premier Inn provides a wide range
of services to its customers which mainly encompasses lodging services, room services,

cafeteria, luxury resorts etc. Here, the needs and demands of the customers are given utmost
importance. The additional services and products which are being offered to the customers along
with the main services are irons, free cot hire, hairdryers, free wi-fi etc. Along with this, Premier
Inn has around 10 resorts which are spread across the various locations in addition to hotels and
restaurants.
TASK
Analysis of competitive environment by making use of Porters five forces
Porters five forces model is basically used by company in order to analyse competition for
business. This framework assists in analysing and evaluating competitive strength and weakness
that an organization possess. Model is based on five forces that includes the following:
Bargaining power of suppliers: The threat of this factor is low as Premier Inn is engaged in
taking their products from more than 4000 suppliers globally. It is also considered to be low
because of as the product that is being supplied by suppliers limits uniqueness and
innovativeness. All of the suppliers are engaged in providing Premier Inn the same type of raw
material, good and services. Moreover, it has also been analysed that the importance of order
volume for Premier Inn is paramount and there is no cost involved in switching for hospitality
organization. Hotel is also being engaged in creating a new supplier diversity program that has
made sure that they need to but raw materials from various socially diverse suppliers. Thus, this
program organized by Premier Inn provides an increased competitive ground for all socially
diverse suppliers to various different group of suppliers. It has also been analysed that the
suppliers in hospitality industry has the significant power which assists them to provide higher
prices from the firms in Lodging field. So Premier Inn in order to overcome from this problem
needs to be engaged in building up efficient chain of supply with various suppliers.
Threat of substitutes products or services: The threat of this factor is high, in this a when
competitor provide a new product that meet out the needs of similar consumers in different ways,
then this can be a threat for Premier Inn. It is because value proposition of various organizations
is different from present offerings of the industry (Moreno-Izquierdo, Ramón-Rodríguez and
Perles-Ribes, 2016). In order to overcome this hotel can make use of service oriented concept
rather than focusing on product oriented. They can also get engaged in increasing the quality of
goods and services that is being provided by them. This can assist Premier Inn in gaining
competitive advantage. It will assist Hospitality organization in gaining. They can also lower