This case study is based on Travelodge, a chain of hotels that provide hospitality services worldwide. It includes an evaluation of the organisational structure being followed by the hotel, SWOT and PESTLE analysis to understand the impact of internal and external factors on the business environment.
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Case Study-Travelodge 1
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Table of Contents INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Organisational structure..........................................................................................................3 Business environment.............................................................................................................4 SWOT Analysis......................................................................................................................5 PESTLE Analysis...................................................................................................................6 CONCLUSION................................................................................................................................8 REFERENCES:...............................................................................................................................9 Books and Journals.................................................................................................................9 2
INTRODUCTION The nature of business environment is dynamic and it keeps on changing. It becomes necessary for the business organisation to analyse the changes in market so that they are able to carry on their operations smoothly(Konovalova and et.al., 2018). In current time, the pandemic situation has impact on the all the sectors of business. Hospitality industry is one of the largest growing industry in UK. There is need of analysing the changes that take place and their impact on the businesses operating in the industry. This report is based on Travelodge. It is a chain of hotels that provide hospitality services worldwide. The hotel come into existence around 83 years ago in 1939. The company assures that all the employees are given proper training so that they are able to work as per trend in the market. This case study has evaluation of the organisational structure being followed by the hotel in order to work smoothly. There is key role of internal factors on success of the business of SWOT Analysis is being carried. Afterwards, the sue of PESTLE Analysis is being done so that the impact of external factors is understood. All these factors helps to analyse the business environment and its impact on business. MAIN BODY Organisational structure Organisational structure can be defined as the system of activities that are directed towards the accomplishment of goals and objectives. It includes the roles and responsibilities that helps to attain the working in successful manner. The company must follow the structure being designed by them as it helps them to attain the goals in proper manner (Gursoy and Chi, 2020). There are different types of organisational structure and the business decides the one as per their business model. Travelodge followshierarchical organizational structurethat helps them to attain the pre-determined goals effectively. The roles and responsibilities are clearly mentioned and the hierarchy of communication is followed. 3
Advantages of hierarchical organisational structure There is clear line of authority and this helps to report in effective manner. The employees are able to communicate effectively and know the right person whom they have the interact with in case of problem. The employees know their clear position, roles and responsibilities that helps them to work in most productive manner. Disadvantages of hierarchical organisational structure Decision making is complex problem in case of hierarchical structure. It takes a lot of time and influence of people in order to take a decision. There is lack of flexibility observed in case of this structure. In order to take permission all, the levels of hierarchy need to be followed. The resolving conflicts also takes more time. Business environment Business environment can be understood as sum total of all the internal and external of the business and has impact on its operations. It is necessary to check all these factors on regular basis so that the firm is able to work in smooth manner (Rhou and Singal, 2020). The study of business environment helps the firm to formulate effective strategies and attain goals and objectives. 4
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SWOT Analysis It is a strategic tool that is being used by the firm to take make decisions. It becomes important to consider all the internal factors that have positive impact on the business and the one that need to be improved (Oliinyk, Kolykhaiev and Berezkin, 2021). SWOT Analysis of Travelodge is as follows: Strengths Affordable prices: The chain of hotels provide the customers rooms according to budget. It helps the customers to avail the services post pandemic as the buying power has reduced. Brand image:Travelodge has attained a good position in the industry and this helps them to get loyal customers and operate smoothly (Osei, Ragavan and Mensah, 2020). Weaknesses High cost structure: There is high cost structure in establishing and running a hotel. Changes in rend also impacts the business and enhances their work of operations. Lowemployeeretention:Thereis problemoflowemployeeretention beingfacedbyTravelodgedueto Covid-19 pandemic. The employees are more concerned regarding their health and well being. Opportunities Sustainable approach:The business can attain opportunity by changing the businessmodeltosustainable.This helps them to attract more customers and retain them in organisation. Digital business:There is high trend of digitalisationincurrenttime.By adopting digitalisation they will be able to gain lead over the other competitors in market. Threats Regular changes in market:There are changesinthecustomertrendson regular basis and that is the reason the company has to spend huge amount of money (Pateli,Mylonasand Spyrou, 2020). Competition:Thereishuge competition in hospitality industry and due to this reason they face threat of losing the customers. 5
PESTLE Analysis It is a model that helps the company to know about the external factors and their impact on the business performance. There is need of checking all the factors that have impact on the working of business (Sakovska and et.al., 2022). The discussion related to same is as follows: Political factors: It includes tax rates, trade barriers and all others that are influenced by government. Favourable: The political condition of UK is stable and this helps Travelodge to operate smoothly. Unfavourable: There are tax rates being imposed by government of UK on the hospitality sector and this leads to high prices for the hotel. Economic factors: These are the factors that show the performance of company. It includes interest rate, demand and supply, consumer buying power etc. Favourable: The GDP of UK is rising again post pandemic and this helps to give favourable results to Travelodge. Unfavourable: The customers are still worried and the buying power has been reduced that leads to sales for the company (Yassiva, Priyono and Wibowo, 2022). Social factors:There are social changes and trends that take place in the market on regular basis. It becomes necessary to know about the trends in market. Favourable: It is seen that Travelodge uses digital marketing that helps the business to be part of trend and attain success. Unfavourable: It becomes difficult to follow all the trends that are available in the market and this causes a lot of expenses to attain success. Technological factors: The use of updated technology is necessary for success of business and enhances their performance as well. Favourable: There is key role of using updated technology as it helps to serve the needs and wants of customers in effective manner. it also helps the Travelodge to enhance the performance of business. Unfavourable: The rapid updates in technology are so expensive for the businesses to undertake (Ampofo, 2020). Legal factors: There are various laws and legislations that must be followed by the organisations operating in hospitality sector. 6
Favourable: The hotel follows all the laws such as equality act, health and safety act that helps them to operate smoothly. Unfavourable: It becomes problematic for the business so follows the changing laws around the world(Matovic, 2020). Environmental factors:It includes climatic change, pollution and wastage of resources. The business organisations must take care of all the factors that reduce harm to the environment. Favourable: The business takes care about the environment and manages to reduce the wastage. Unfavourable: There is pollution caused by them and are still not able to stop the same effectively. 7
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CONCLUSION From the above report, it has been concluded that the nature of business environment is dynamic. It becomes necessary to carry on research on regular basis so that success is attained. It is seen that the company has to make strategies and plans that can help them to attain better position in market. This helps the company to manage the working in effective manner so that they are able to attain better advantages. The organisational structure of the business is mentioned along with its advantages and disadvantages so that better actions are taken. The business decides the structure as per the business model being followed by them. There is need of analysing the internal factors and their impact on the business organisation. The business works on their strengths so that they are able to gain advantage over all the complex situations and achieve success. It is also necessary to check the business environment and the factors that have impact on the company. There are both favourable and unfavourable conditions that arise in market and the business has to consider them all in order to manage their working effectively. The business organisation has to work as per the changing trends in the market as this is beneficial for the success and wellbeing of the business. 8
REFERENCES: Books and Journals Ampofo, J. A., 2020. Contributions of The hospitality industry (Hotels) in the development of WamunicipalityinGhana.InternationalJournalofAdvancedEconomics,2(2), pp.21-38. Gursoy, D. and Chi, C.G., 2020. Effects of COVID-19 pandemic on hospitality industry: review of the current situations and a research agenda.Journal of Hospitality Marketing & Management,29(5), pp.527-529. Konovalova and et.al., 2018. Forming approaches to strategic management and development of tourismandhospitalityindustryintheregions.JournalofEnvironmental Management & Tourism,9(2 (26)), pp.241-247. Matovic, I.M., 2020. PESTEL analysis of external environment as a success factor of startup business. ConScienS, p.96. Oliinyk, N., Kolykhaiev, S. and Berezkin, I., 2021. IMPROVEMENT OF MARKETING ACTIVITY OF THE HOSPITALITY INDUSTRY ENTERPRISE. Osei, B. A., Ragavan, N. A. and Mensah, H. K., 2020. Prospects of the fourth industrial revolution for the hospitality industry: a literature review.Journal of Hospitality and Tourism Technology. Pateli, A., Mylonas, N. and Spyrou, A., 2020. Organizational adoption of social media in the hospitalityindustry:AnintegratedapproachbasedonDITandTOE frameworks.Sustainability,12(17), p.7132. Rhou, Y. and Singal, M., 2020. A review of the business case for CSR in the hospitality industry.International Journal of Hospitality Management,84, p.102330. Sakovska and et.al., 2022. Improvement of the Marketing Management System of Tourism and HospitalityIndustryEnterprisesontheBasisofInnovations.InInternational Conference on Business and Technology(pp. 881-895). Springer, Cham. Yassiva, V. V., Priyono, A. and Wibowo, W. P., 2022. Domain-based ambidexterity for managing a dual business model in the hospitality industry in the midst of COVID-19 pandemic: an exploratory study.Journal of Asia Business Studies, (ahead-of-print). 9