Internal and External Factors Impacting Travelodge's Business: A Business Environment Analysis

This report analyzes the organizational structure and business environment of Travelodge Hotels Ltd. It examines the impact of internal and external factors on the company's business, using SWOT and PESTLE analysis. The report concludes that organizational structure and business environment analysis are crucial for the smooth operation of the company in a competitive environment.

Business Organisations
and Environment

Table of Contents
Introduction......................................................................................................3
Main Body.........................................................................................................3
Organizational structure.............................................................................3
Business Environment Analysis...............................................................4
SWOT Analysis.............................................................................................4
PESTLE Analysis..........................................................................................6
Conclusion.......................................................................................................7
References........................................................................................................8

Introduction
Organisational structure is a framework of hierarchy in an organisation in order to
manage work flows. An organizational structure of the company is basically a
systematic arrangement that specifies that how various activities are carried out in
accordance to achieve the objectives defined by the organization(Steyn, 2020). It
includes rules, regulations, roles and authorities within the organization. The structure is
developed to establish the organisation’s operations to achieve the organizational
objectives for future growth. The structure of the company is also responsible that how
internal and external factors affect the company’s business(RECTOR, 2021). In context
to Travelodge Hotels Ltd., it is the largest independent hotel brand in United Kingdom. It
operates in hotels and hospitality sector with over 570 hotels across UK. In the year of
1970, Charles Forte bought this brand to establish it in UK. Its headquarters is in
Thame, UK. The report will examine the organisation structure and the business
environment of the company. It will further explain the impact of internal and external
factors on the business of the company such as political instability, strengths etc. with
the help of SWOT and PESTLE analysis. At the end the conclusion of the overall
analysis is discussed is defined along with references.
Main Body
Organizational structure
An organisational structure is a method that defines the rules, roles and duties of an
individual within the company. It describes the flow of information at different level of the
organisation. The organisational structure plays a major role during the process of
decision making(Mansouri, Singh and Khan, 2018). A successful organisational
structure defines the roles and responsibilities of an individual in the company in order
to achieve the organizational objectives. It helps employees to know whom to report.
The organisational structure basically provides a visual representation of the company
that how it is shaped and define a hierarchy within the company. There is various
organisational structure used by the hospitality industry in which some of them
mentioned below:

 Divisional organisational structure: In this organisational structure various
divisions or departments are formed on the basis of products, market and
regions. In this the company divides its employees among various departments
such as marketing, sales, human resource, packaging, logistics etc. according to
their skill set. The positive aspect of this structure is that failure of one of the
departments does not affect the other department directly. The disadvantage of
this organisational structure includes ineffective operational efficiency. It is due to
the improper communications among the employees of different departments. It
is mostly used in large organisations that operates widely.
 Hierarchical organisational structure: This type of organisational structure
involves a direct chain of command from top to bottom within the organisation. It
is basically from senior management to subordinates and then to
employees(Schneeweiβ, 1995). It is represented in pyramid shape. Most of the
hotel industry uses this organisational structure.
In case of Travelodge, the company uses the hierarchical type of organisational
structure which is followed by general manager. The advantage of this organisational
structure is well defined career path and the authority. Due to the pyramid structure, it
helps employees to understand levels of leaderships. The disadvantages involve slow
decision making process and poor communication among employees of various
departments.
Business Environment Analysis
Business environment analysis describes as analysing and examining the various
factors and conditions outside the organisation(Cravo and Piza, 2019). The main
objective of business environment analysis is identifying the various potential impacts of
specific aspects such as political shift, technological change, international
environments, trade agreements, tax policies and demographics on business operation.
SWOT Analysis
SWOT analysis is a method used for identifying the organisation’s internal factors such
as Strengths, Weaknesses, Opportunities and Threats(Poddubnaya and Shipilov,

2019). It is used to evaluate the Travelodge’s competitive strategy in order to develop
effective planning. SWOT analysis is a strategic planning method that provides
assessment of performance, risk, potential and competition. It is designed to evaluate
facts, data and realistic approach to find the strengths and weaknesses of the company.
It is further explained in detail as below:
 Strengths: In this analysis, the strength basically defines the company’s assets
like what makes the company different from another competitor. It includes
strong brand image, brand loyalty, product quality, unique technology and many
more. Travelodge company offers rooms at affordable prices. It provides special
deals on early bookings and on occasions. For budget hotel, it is essential to
provide deals and promotions to attract more customers. The company is also
known for its quality service.
 Weaknesses: weaknesses describe the various points where company is
lagging or not performing at its potential level(Pelet, Lick and Taieb, 2019).
Travelodge is not adopted the advancement technology and it does not provide
whole range of services like luxury hotel to the customers. There is also lack of
space in hotel which limits large parties and functions.
 Opportunities: Opportunity defines the favourable factors in which company can
outperform in order to take competitive edge. Travelodge can be partner in
various events such as sports and music concerts to enhance the brand image.
The company can adopt green and ecotourism trend to gain public attention.
Travelodge needs to explore market to gain more profitability.
 Threats: Threat refers to the factors that can negatively impact on the
organisation’s operations. One of the major threats is intense competition in the
hospitality sector where many brands offering wide range of services at low
prices. Travelodge has low international presence therefore international tourists
do not know about the company. Oher threat is political instability in the region.
PESTLE Analysis
The PESTLE analysis describes the analysis of various external factors that affect the
industry or an organisation. It includes Political, Economical, Social, Technological,

Legal and Environmental factors(Alanzi, 2018). It helps an organisation to make
strategic decision. In context to Travelodge, this framework defines that how firm is
operating in the business environment. It is further explained in detail using various
factors as given below:
 Political factor: These factors are commonly driven by the government in the
country. It includes government policies, trade agreements, political stability,
corporate taxations etc. It is basically when government interfere in the economy
or industry(Stăncioiu and Gabor, 2022). The Travelodge created a policy
statement for the commitment towards the privacy of the customers. The
business of the company is highly depended on the government. When the
political shift takes place then the company needs to comply with respective
government policies.
 Economical factor: The economical factor is directly linked with the economy of
the country. It includes inflation rate, gross domestics product(GDP), growth rate,
exchange rate, employment rate and recession. These factors basically define
the customers spending power in the region in order to set up pricing strategy.
Due to this effect Travelodge provides budget services to its customers.
 Social factor: The social and cultural factors include lifestyle of the people,
customers preferences, age and gender ratio etc. It is that social trend of the
people changed such as lifestyle, interests that affects the business of hotel
industry. Travelodge is providing customized rooms as per the requirements of
the customers in order to remain competitive in the market.
 Technological factor: It is one of the most important factors due to change in
technology day by day. According to research in UK, it is found that most of the
people uses online booking method. Travelodge is providing online booking
features to its customers through websites and third party(BURKE, ROBINSON
and Choi, 2020). The company also added some features like multiple Add ons
which includes Wi-Fi, breakfast, dinner, laundry etc.
 Legal factor: Legal factors includes consumer law, data protection law, health
and safety law, copyright law etc. Any violation to this law can negatively impact
on the business of the company. Travelodge is strictly following such laws for

smooth run of the business. The company also ensure the health and safety of
their staff as well customers.
 Environmental factors: As we know that environmental concern becomes the
major issue in every industry. It includes climate change, renewable energy
sources etc. Travelodge is adopting ecotourism policy to gain the competitive
edge and to support environment. The company also moving to adopt renewable
energy sources in the hotels.
Conclusion
From the above mentioned report, it is concluded that organizational provides a visual
representation of an organisation that how it is shaped. It explains the types of
organisational structure such as functional and hierarchical along with the organisation
structure of Travelodge company. The company uses hierarchical type of organisational
structure which includes direct chain of command from top to bottom. The analysis
describes that how business environment analysis is crucial for the company in order to
carry out the smooth operation in the competitive environment. It defines the various
potential impacts such as political shift, technological change, international
environments, trade agreements, tax policies and demographics on business operation.
It also explains the internal factors of the business using SWOT analysis which defines
the provides assessment of performance, risk, potential and competition. It further
includes the various external factors such as political, economical, social, technological,
legal and environmental. These factors identify the effect of interest rate, inflation,
political instability, changing lifestyle of people, technological advancement and
environmental concerns on the operation of the company.
References
Alanzi, S., 2018. PESTLE Analysis. Project Management.
BURKE, K., ROBINSON, P. and Choi, M., 2020. Developing meta-strategies for
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Cravo, T.A. and Piza, C., 2019. The impact of business-support services on firm
performance: a meta-analysis. Small Business Economics, 53(3), pp.753-770.

Mansouri, A.A.A., Singh, S.K. and Khan, M., 2018. Role of organisational culture,
leadership and organisational citizenship behaviour on knowledge
management. International Journal of Knowledge Management Studies, 9(2),
pp.129-143.
Pelet, J.E., Lick, E. and Taieb, B., 2019. Internet of Things and artificial intelligence in
the hotel industry: which opportunities and threats for sensory marketing?.
In International Conference on Advances in National Brand and Private Label
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Poddubnaya, E.S. and Shipilov, N.Y., 2019. Strategic diagnosis methods of the hotel
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RECTOR, D., 2021. Organisational Structure.
Schneeweiβ, C., 1995. Hierarchical structures in organisations: A conceptual
framework. European Journal of Operational Research, 86(1), pp.4-31.
Stăncioiu, A.F. and Gabor, M.R., 2022. Marketing Plan. In Encyclopedia of Tourism
Management and Marketing (pp. 142-145). Edward Elgar Publishing.
Steyn, R., 2020. Leadership Styles and Organisational Structure. International Journal
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