Strategic Hospitality Management

This document provides an in-depth analysis of strategic hospitality management. It covers stakeholder analysis, PESTLE analysis, SWOT analysis, and the use of Porter's Five Forces Model. It also discusses strategies to improve competitive edge and market position. The document is relevant for students studying hospitality management or related courses.

Strategic Hospitality
Management

Contents
INTRODUCTION.....................................................................................................................................3
MAIN BODY.............................................................................................................................................3
TASK 1.......................................................................................................................................................3
Stakeholder’s analysis of the organization...............................................................................................3
PESTLE analysis:....................................................................................................................................4
Critical analysis of the hospitality macro environment............................................................................4
SWOT analysis and VRIO framework of internal environment..............................................................5
Critical evaluation of the internal environment........................................................................................6
Use of Porter’s Five Force Model............................................................................................................6
Appropriate strategies to improve competitive edge and market position...............................................7
TASK 2.......................................................................................................................................................7
Evaluate different types of strategic directions with the use of porter's generic strategies.......................7
Recommendation through the application of Ansoff’s Product Matrix....................................................8
Segmentation, Targeting and Positioning..............................................................................................10
Produce a strategic management plan....................................................................................................11
Critique and interpret information and data...........................................................................................11
CONCLUSION........................................................................................................................................11
REFERENCES........................................................................................................................................13
Books and Journals:...............................................................................................................................13

INTRODUCTION
Business strategy helps an organisation by providing a clear set of plans, actions and
objectives that helps an organisation to reach its market goals with their products and services.
The strategy defines the business organisation a path and act as a guide in the process of decision
making for recruiting and resource allocation (Assaf, A. G. and Et.al., 2019). It helps to plan
long term business activities in order to accomplish the key objectives of organisation. The
report is going to prepare on the Premier Inn which is a British hotel chain in UK. It is a
multinational company which have more than 72000 rooms and 800 hotels. In 1987, the
company was introduced by Whitbread the company is a merger of Premier Lodge and Travel
Inn which was newly recognized as Premiere Inn. The business strategy is also very important in
the hospitality industry. The report includes with the aim of discussing stakeholder’s analysis,
pestle analysis, SWOT analysis and many more.
MAIN BODY
TASK 1
Stakeholder’s analysis of the organization.
A stakeholder is a person who can be anyone who make an impact of the organization’s
decision. Stakeholder can be an individual or small groups who have certain powers, negotiate
with, respond to and change the strategic future of the company. There are two types of
stakeholders:
 Internal Stakeholders; such as managers, governance, board of directors and employees.
 External Stakeholders; such as customers and government.
In context to Premier Inn, the organisation has majorly six stakeholder who are very
important for the organisation and they could effect and influence the company's decision
anytime with some interest.
 Employees: Employees are considered as a key part of the “customer heartbeat” strategy
in the organisation. They are the most vital stakeholder for the organisation because of
their high quality service they create a positive performance of the organisation and in
return they get prices, rewards and salaries.
 Board of Directors: They are also a key element in the organisation of Premier Inn
where they provide and check the report of the companies in different sectors, they are
likely to bring extra ordinary skills and talented people. It has been studied that they
appointed the two non-executive directors both are having international experience and
highly talented for the organisation.
 Managers: Managers are the persons who manage the staff members in the organisation
while ensuring they meets with all the task and activities (Chiang, C. F., Chen, W. Y. and
Hsu, C. Y., 2019). They do planning, budgeting, organising, managing, finances and
many more. In the respective organisation, the managers are liable to promote and
advertise the business and they are also liable to deal with customer complaints.

 Customers: They are the ones from whom the organisation generate revenue. As Premier
Inn is a multinational brand they have customers throughout the world so they are
required to make them satisfied and happy.
 Governance: Governance are the persons who manage and control the company’s
circumstances, they are considered as the ruler of the organisation (Chon, K., 2019). In
Premiere Inn, the main governance are directors, managers as well as chairman.
 Government: Government is the most important stakeholder for any organisation.
Premier Inn has to follow the government rules and guidelines and support in the benefit
for government such as Taxes, VAT and many more.
PESTLE analysis:
Pestle framework represents as an analysis tool that is used to identify the external factors
of the environment. In context to Premiere Inn, the factors which influence the decisions in the
organisation are mentioned below:-
 Political: Premier Inn is a multinational organisation which doing its business globally
they have to follow various nation government policy and also about terrorism. The
organizations product request possibly will get influenced by increasing or decreasing the
provincial, indigenous or national government taxes like general sales tax, alcohol and
beverages Tax, VAT and many more.
 Economic: Many times the brand falls down due to financial crisis in the 2008 but it had
overcome the consequences and after that it delivers several benefits to the customers.
 Social: As the company provides hotel services to the customers it also provides food and
beverages. It has to maintain social behavior and multi-culture because they doing its
business in varieties of countries which may also expect to increase the expenses.
 Technological: Use of technology help a lot in their business activities such as to see
time they can improve their services with self-check in system (Gutiérrez-Martínez, I.
and Duhamel, F., 2019). The company’s technological factors such as online booking
systems, offers which are available to the travel agents and websites.
 Legal: A company is liable to pay a minimum amount as per the law to their employees.
 Environmental: In context to Premiere Inn, the company is committed with energy
saving policy and implemental policy. Changes in weather and climate impacts a lot in
the hospitality industry but the respective company is aware about these factors and try to
avoid pollution.
Critical analysis of the hospitality macro environment.
It has been critically analyzed that the company performs different functions and
corporate strategies which will help them to reduce the negative impacts of macro environmental
factors. When company wants to minimize the negative impacts of macro environment factors
they are considering the positive impact and perform varieties of function in order to achieve
more and more competitive advantages in the market. In context to premier Inn the company
operates its business in a very competitive environment. It has been observed from the above
pestle analysis, the company's strength and weaknesses has been analyzed. When considering the
political, economic, social and legal condition of the organisation it helps to create several

opportunities as well as external strength at the same time. Moreover, it will achieve their
objective and benefits from the external value (Helmold, M., 2020). The company gets its
specialization in fresh foods, delicatessen and wines in sales which helps to make it unique from
other competitors in the market. Overall the company focuses on its target customer that help to
get targeted more customers.
SWOT analysis and VRIO framework of internal environment.
SWOT Analysis:
Strengths Weaknesses Opportunities Threats
 Completes
very tough in
the market.
 Extended
network of
supply and
distribution.
 Get entry into
food catering
services and
event
management.
 Provide
customer a
comfort zone
and quality
services.
 Great
visibility due
to its
marketing
strategies.
 Affordable
prices to its
customer.
 Highly
dependent on
the seasons.
 It gives
temporary
competition.
 Customer’s
perception is
that low
prices are
generally
offering low
quality
services.
 Technological
advancement
needs lot of
expenditures.
 Successful
entry in the
international
market such
as Ireland,
Germany.
 They
understand
the concept of
satisfaction of
customers, by
giving
different
surprises to
their guest
and visitors.
 Increasing
risk of legal
actions
against the
organisation,
they must
have
adaptability of
legislations
which is
related to
health and
safety
measures.
 As the market
is great in the
hospitality
industry there
are several
companies
which gives
strong
competition to
the Premiere
Inn such as
Easy hotel,
Holiday Inn,
Ibis and
Marriott is
one of them
who gives a
strong
competition.
VRIO Framework of Premier INN

Valuable: Valuable considers those resources which are significant for the company and which
provides satisfaction level to their customers (Idahosa, L. O. and Ebhuoma, E. E., 2020). In
context to Premiere Inn, there are four valuable resources such as employees, financial resources,
automation and strong dealer community.
Rareness: It includes the uniqueness of those resources in the organisation which have some
specification and which helps to make organisation significant. Premier Inn considers with three
resources which are unique such as their employees, dealer community and financial resources.
Imitable: These are such resources which cannot be copied by the competitors in the market. In
context to Premier Inn, the imitable resources are employees and financial resources of the
organisation because it have distinct brand image in the market.
Organized: With the reference of Premier Inn, employees considered as the organized resources
for the organisation which provide competitive benefits. This is because employees are the key
for success and without this resources the hotel brand cannot get success.
Critical evaluation of the internal environment.
It has been evaluated that SWOT analysis and VRIO framework helps to drive number of
strategies which can be framed with the help of above analysis. Internal analysis focuses on the
strengths and weaknesses of the organisation which is an internal factor that provide certain
benefits and drawbacks in order to meet the requirements in the target market. It has been
evaluated from the above analysis is that the strength of the company which is customer-focused
which provide a certain way to meet the requirements of customer. It is also necessary that any
organisation must consider the strength as well as weakness to meet the requirements of
customer which is considering as true core competency of the organisation. In context to Premier
Inn, when it creates external opportunities with its internal strength it develops core
competencies in order to meet the requirements of the customers and they are focused on to
convert the weaknesses into strength which also helps to meet the demand standards of global
competition which creates value for the customers.
Use of Porter’s Five Force Model
Porter's five forces model is a framework which is used to identify the competitive edge
of the company in the market place. This model also helps an organisation to identify the several
types of factors which creates different opportunities.
Power of buyers: In the hospitality industry, the power of buyers gives a boost to the
organizations which helps to identify and attract the huge number of customers at global level
towards the organisation. Using different types of creative and innovative techniques, it will help
to satisfy the number of customers and their needs. In context to Premier Inn, they give a very
lesser chance to customers to bargain their services.
Power of suppliers: This factor is also moderate in the organisation because it performs
its services at international level where for the organisation having a large number of suppliers to
the product and services.

Threat of new entrants: It has been analyzed that hotel industry needs a very huge
capital investment for the start a business so that the threat of new entrants for the Premier Inn is
very minimum which offers stable market and able to form the new corporate strategies.
Threats of substitute products: In hospitality industry every organisation is intended to
serve same products and services to their customers which can be a great competitions for the
Premier Inn.
Competitive rivalry: This is considered as a high competitive threat for the Premier Inn
organisation where competition is huge in number in the hospitality industry. The major
competition for the organization is Marriott, Holiday Inn and many more.
It has been evaluated from the above analysis is that for the Premier Inn organisation
there are number of factors which must be consider while forming different corporate strategies.
This will help to achieve maximum competitive benefits in the marketplace.
Appropriate strategies to improve competitive edge and market position
In context to Premier Inn, there are number of strategies which help to improve
competitive edge and market position, some of them mentioned below:-
Become an online influencer: Nowadays it is used to be very general to achieve the
competitive edge for the organisation (Wong, J. W. C. and Lai, I. K. W., 2019). It considers as
when people are know more about the organisation they will attract more, and when these
peoples have some issues an organisation is able to solve immediately.
Create a killer culture: In this industry, it is very important to have a dedicated
employees and staff members. Customers likely to purchase services from those organisation
where they can treat better with others. Premier Inn having the best talent to provide services.
TASK 2
Evaluate different types of strategic directions with the use of porter's generic strategies.
Porter's generic strategies can be applied by the Premier Inn organisation to its product
and services:-

 The cost leadership strategy in means being a leader in terms of costing of services in the
hospitality industry which means simply being the lowest cost producer. In context to
Premier Inn, the company having a access to the capital which may invest in
technologies, having efficient logistics, and a low cost base that is materials, labor,
facilities.
 Differentiation strategy in emphasis a unique product or services different from its
competitors. In context to Premier Inn, the organisation is focus on good research
innovation and development they creates effective sales and marketing also they have an
ability to deliver high quality services.
 Cost focus refers to the companies who seek to create low cost benefit but within the
small market segment (Šerić, M. and Vernuccio, M., 2020). In context to Premier Inn, in
order to make a profit this strategy will be acceptable to a minimum number of
customers.
 Differentiation focus strategy emphasis strategy in which organisation will look upon to
differentiate its product and services in order to identify the smaller segment of customer.
In context to Premier Inn, they are identify those customer group which have different
needs to satisfy.
Recommendation through the application of Ansoff’s Product Matrix.

 Market Penetration: It is the simplest strategy which focuses on to improve the existing
product and services within the hospitality industry.
 Market development: It is a strategy in which a company introduce its existing product
and services in a new market (Sebby, A. G. and Brown, C., 2020). With reference to
Premier Inn it is adaptable because the company is global focused in order to expand its
business.
 Product Development: It is a strategy in which organisation introduce its new products
and services within existing target market. In context to Premier Inn, there are various
options which can be helpful to expand its business by launching its new services to the
customers.
 Diversification: It is a strategy which takes more risk to adopt because it emphasis on
launching the new product in the new market (Séraphin, H. and Mhanna, R., 2020). In
context to Premier Inn, the never like to use this type of strategy as it demands huge
investment of capital and more chances of lost in its operation.
It has been recommended from the above matrix to the Premier Inn is that they can adopt
different strategies for their operations but the most suitable strategies are market development

and product development where they can easily increase their market share and remote promote
the new ones.
Segmentation, Targeting and Positioning.
STP marketing model is considered as a very familiar strategic approach in the modern
marketing (Loi, K. I., Lei, W. S. and Lourenço, F., 2021). In context to Premier Inn, the
company applied marketing models in their exercise.
Market Segmentation As it is a budget accommodation, this
segmented its business into families,
youngsters, corporate businesses and many
more.

Targeting The major target market is backpackers and
travelers.
Positioning In the UK, it is considered as the best budget
hotel and to serve best services to their
clients.
Produce a strategic management plan.
It is a plan which helps in smooth functioning and where each and every function can be
classified according to the objectives of the organisation (Lee, Y. and Kim, J., 2021). In context
to Premier Inn, the strategic management plan is based on the vision mission strategy which is
mentioned below:-
Vision: Premier Inn’s vision is to increase its market share throughout the world.
Mission: It is to provide quality services and to satisfy the requirements of customers with
increase in profits.
Strategies: The Company is focused on market development strategies in order to increase its
market share and profit for a longer period of time.
Implementation: The Company is focused to implement the plan from top to bottom level
where there can be able to assign duties to its employees and execute all the functions with no
delay.
Evaluation: It has been evaluated that the company is continuously grow in its global market as
well as focus on its future so they can functions smoothly.
Critique and interpret information and data
It has been critically evaluate that porter's generic strategies are very useful for the
organisation in which they can identify their competitive edge in the hospitality industry. The
company is able to use different strategies cost leadership, differentiation, cost focus and
differentiation focus (Kolar, T., Erčulj, V. and Weis, L., 2019). The differentiation strategy is the
most suitable strategy for the organisation in order to specify their product and services to the
customers which helps to gain a competitive benefit in the market. From Ansoff Matrix, it has
been analyzed that product or market development strategies are the most suitable strategies
which helps to expand its market share. While market segmentation, targeting, positioning helps
organisation to get the right customer segments and positioning their services which meets their
customer’s wants, requirements and expectations. Strategic management plan help to set the
goals for the organisation and perform a competitive analysis which reflects internal structure as
well as evaluation of current strategies. This will help to build sustainable and possessive
business model.
CONCLUSION
It has been concluded from the above report is that an organisation get affected by the
external factors like political economic, social. They focused on strengths and resources as well
as on their weaknesses and work on them to create opportunities by the elimination of threats.

Company is also using the porter's five forces model and ansoff matrix which helps to identify
competitive benefits for their hotel. Overall it has been concluded that the organisation is clear
with its strategies which helps to get better results.

REFERENCES
Books and Journals:
Assaf, A. G. and Et.al., 2019. Modeling and forecasting regional tourism demand using the
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pp.383-397.
Chiang, C. F., Chen, W. Y. and Hsu, C. Y., 2019. Classifying technological innovation attributes
for hotels: an application of the Kano model. Journal of Travel & Tourism Marketing, 36(7),
pp.796-807.
Chon, K., 2019. Hospitality in Asia: A new paradigm. Routledge.
Gutiérrez-Martínez, I. and Duhamel, F., 2019. Translating sustainability into competitive
advantage: the case of Mexico’s hospitality industry. Corporate Governance: The International
Journal of Business in Society.
Helmold, M., 2020. Total Revenue Management (TRM). In Total Revenue Management
(TRM) (pp. 1-12). Springer, Cham.
Idahosa, L. O. and Ebhuoma, E. E., 2020. Limitations to Sustainable Resource Management in
the Global South: Evidence from the Accommodation Industry. Tourism and hospitality
management, 26(2), pp.337-358.
Kolar, T., Erčulj, V. and Weis, L., 2019. Multigroup validation of the service quality, customer
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Loi, K. I., Lei, W. S. and Lourenço, F., 2021. Understanding the reactions of government and
gaming concessionaires on COVID-19 through the neo-institutional theory–The case of
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Sebby, A. G. and Brown, C., 2020. Experiential Learning in Hospitality Management
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Children. Children in Hospitality and Tourism, p.107.
Šerić, M. and Vernuccio, M., 2020. The impact of IMC consistency and interactivity on city
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Tourism, 23(17), pp.2127-2145.
Wong, J. W. C. and Lai, I. K. W., 2019. The effects of value co-creation activities on the
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Tourism Management, 39, pp.97-109.