Premier Inn: Corporate Strategy Formulation in Hospitality Management

This report provides an analysis of strategic hospitality management, focusing on corporate strategy formulation and implementation within the industry, using Premier Inn as a case study. It explores the process of corporate strategy formulation, including setting objectives, evaluating the organizational environment, and performance analysis. The report also examines the challenges of implementing a corporate strategy, such as weak strategies, ineffective training, lack of resources, poor communication, and misalignment. Furthermore, it discusses the effectiveness of implementing corporate strategies and utilizes the Ansoff Matrix to analyze Premier Inn's strategic options, including market penetration, product development, market development, and diversification. The report concludes by highlighting the importance of strategic management in navigating the competitive hospitality landscape and adapting to the ever-changing environment. Desklib offers a platform for students to access similar solved assignments and study resources.

Strategic Hospitality
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Corporate strategy management and formulation in the hospitality industry.............................3
Process of Corporate Strategy formulation in hospitality industry.............................................5
Challenges of implementing a corporate strategy ......................................................................7
Effectiveness of implementing a corporate strategy.................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management refers to the efforts established and implemented by the managers
of the companies in the hospitality industry in order to develop a plan. This plan and strategy will
help the business in dealing with different challenges and aspects in the industry. The main
objective behind the strategic leadership is bringing the practices that will make the management
productive (Andreeva and et. al.,2019). These strategies will help the companies in dealing with
the competitors, they can take use these managerial strategies in times of challenges. Hospitality
industry is filled with competitors and thus to lead in such industry is difficult for the companies.
Strategic management gives the organisation flexibility to adapt to the ever changing
environment. In this report, Premier Inn is considered which is a UK based hotel chain having
more than 800 hotels across the country. This report aims to cover the formulation of corporate
strategies and the strategic management applied to the hospitality industry. Along with this the
process of corporate strategy formulation and implementation of the respective hotel is discussed
in comparison with another hotel.
MAIN BODY
Corporate strategy management and formulation in the hospitality industry
Strategic management refers to the process of planning, monitoring, analysis and
assessment of the needs and challenges in the organisation. These are developed as they help the
business in meeting its goals and objectives . The business environment is filled with constant
changes and thus the business must be smart enough to handle and deal with these changes
(Baxter, Woodley and Hamilton, 2017). The corporate is required to formulate strategies in the
business , apply them in the course of the business and at the end manage the different strategies
that are applied. Hospitality industry is exposed to several factors in the environment and thus
the company must analyse the environment with the help business model.
Strategy formulation is one of the component of strategy management, the management
process contains processes such as goal setting, analysis, strategy formulation, implementation,
evaluation and control. The strategy formulation is a process which considers several factors of
the business environment both internal and external (Bokareva and Yudina, 2020). These are
made by keeping in the mind, the objectives that the organisation wants to achieve. Management

process revolves around the several strategies that the company has applied in their business to
deal with the challenges that stops the company in attaining its goals. In context of Premier Inn,
they make strategies in order to ensure profitability, this helps them in sustaining in the
environment for a longer period of time. These strategies in Premier Inn are made on the basis of
different models. Further Ansoff matrix is applied on Premier Inn:
Ansoff Matrix revolves around four pricing strategies that the company can opt for, in order to
make their business successful. Ansoff matrix helps the managers and marketers in analysing the
risk situation in the market and application of the right strategy in the business model. Market penetration- This kind of strategy focuses on methods that will increase the sales
of the existing products and services in the existing market. This strategy is applied by
those companies who are not looking for any kind of new prospect in the business.
Premier Inn is one of the leading hotel in the countries in which they are operating and
thus they do focus on enhancing or changing the strategies in the current market
(Chernov and et. al., 2019). Their old strategies are good enough to capture the majority
of the share in the market. Product development- This strategy focuses on introduction of totally new products and
service line in the existing market. Premier Inn is a big hotel chain in the UK and they
only provide the accommodation services under the name of Premier Inn. Currently the
company is not looking for diversifying their services in the environment and plans to the
stick to the accommodation services for near future. Market development- This strategy focuses on targeting new customer base or the new
market with the existing line of services and product. Premier Inn has hotels in five
countries namely United Kingdom, Ireland, UAE, Qatar and Germany. The company is
thinking of expanding their hotels into more countries and compete with the market
players of these industries (da Silva and et. al.,2019). Therefore the company is opting for
the market development strategy in their business in order to attain the set objectives and
goals.
 Diversification- This focuses one expanding the business with the new product or service
line. Premier Inn has no plans of diversifying their services though they are looking for
getting into new market. Therefore the company won't be choosing and implementing
this strategy in the course of their business. This strategy is generally chosen by the

companies which are new in the market or the companies who are unable to do good in a
market.
Process of Corporate Strategy formulation in hospitality industry
Setting Organisation's Objectives- This is one of the key component of the business that helps in
attaining the long term objectives of the company. This is one of the key component of the
business that helps in attaining the long term objectives of the company. In instance of
Rosewood hotel, their objective is to buy more real estate and start new hotels in the country.
They have expanded their operations in 16 countries but they have only 28 hotels (Steps in
Strategy Formulation Process, 2021).
Evaluating the organisational environment- The company needs to evaluate the factors in the
environment that impact the operations of the company. The strategies made by Premier Inn
must be in compliance with the environment. As in the hospitality industry they look more into
the social and environmental factors. In instance of Rosewood hotel, Rosewood also focuses on
the factors that directly impacts the profitability and operations of the hotel chains operated in
several countries.
Setting up a Quantitative target- Strategies and plan can only be made if the company is looking
to achieve something particular in the business. These objective must of quantitative nature so
that the implementation and analysis of strategies can be done smoothly. Premier Inn's main
target is to set up 100 hotels in 3 countries by the year 2022. The company will develop and form
strategies by keeping this quantitative factor in mind. In instance of Rosewood hotel, Rosewood
Hotel also plan to increase the number of hotels operational in UK. So that they can provide their
services in many cities across UK. They aim to double the number of hotels in UK by the year
2023.
Aiming in the context with the divisional plan- This means assigning the roles and contribution
required from the divided sub-units (Jaworzynska, 2017). Strategic planning is done by analysing
these roles. Premier Inn should divide the roles that the divisional department needs to play in
completion of effective strategy. The Managers and the marketing team of Premier Inn is
assigned with the role of analysing the conditions of the country in which they wish to expand
their business. In instance of Rosewood hotel, Rosewood Hotel has assigned the plan of finding
and purchasing the best property in the different cities of the country. The plan of finding the
requirements is communicated to the operational department.

Performance Analysis- This refers to the comparison of the past performance of the company
with the current performance. This is done in order to analyse and bridge the required gap in the
business. Premier Inn is being able to attain the set objectives and the company has done
phenomenal in past years. The company aims to continue this kind of performance in the
countries in which they are thinking of expanding. Rosewood Hotel is lacking in few aspects that
was planned earlier by the company. Therefore, the company wants to bridge the gap between
the planned and current performance by strategically expanding the number of hotels.
Choice of Strategy- This is the final step in the process of strategy formulation where the
company picks up one strategy. This is finally derived in the business after analysing the
objectives and the environment. Premier Inn is opting for market development strategy where
they are expanding their services in new countries. The company implies this strategy to
effectively accomplish the goals and objectives. Rosewood Hotel is looking for diversification
strategy where they want to expand their services as well as the market.
Challenges of implementing a corporate strategy
Strategies are only effective if they are successfully implemented by the managers of the
business. The companies often lack in correctly implementing the strategies which result in
failure of achieving the desired goals (Kalkhouran, Nedaei and Rasid, 2017). Premier Inn might
face these challenges while implementing the corporate strategies in the business: Weak strategy- Strategies are implemented in order to attain a new vision for the
business. Strategies are treated as an opportunity that can help the business in creating a
roadmap which needs to be focused. The strategy must have the clear milestones,
timeline of achieving these and the role of the employees in this (Kavale, 2017) . The
strategies must be in a way in which the expectations from the employees for the
completion of that goal is at a normal pace. A strategy made by the manager that expects
the department to overwhelm with too much work and responsibilities would result in
failure. In context with Premier Inn they should set up objectives which are fairly
possible in that timeline. Ineffective training- A new strategy that is being implemented in the business must be
backed up with good trained employees. The companies should properly do sessions that
will improve the skills and qualities of the employees. The strategy implied in the
business must match with the skill set the employee working in the company has. If the

employees are not trained enough to implement the strategy in the business then the
whole process of formulating the strategy would get wasted. In context of Premier Inn,
they train their employees and front desk department in various aspects such as effective
customer acquisition and communication techniques which help them in increasing the
productivity. Lack of Resources- Implementation can only be effective if the company has enough
resources to meet the objectives. The company must have enough of capital, assets and
the workforce so that the business can effectively manage to achieve the set strategies. In
context of Premier Inn, as their objective is to set up new hotels in several countries they
require capital for expansion (Kogawa and Salgado, 2017). The strategies made by the
company to manage the operations in the expanded countries can only be achieved if the
company has enough of the resources. Lack of communication- This is another challenge that the company faces while
implementing the strategies in the business. Communication is the key of accomplishing
the goals in the organisation. Lack of communication can result in not clarity of roles and
the team won't be able to effectively implement the strategy in the business. In context of
Premier Inn, the managers and the employee have effective communication which helps
them in communicating the plans and strategies they need to follow in the hotels. Lack of follow through- There should be regular meetings to check if the company is
following the right strategies and plans in the whole implementation process. In context
of Premier Inn they follow a comprehensive plan which helps them in sustaining in the
business. Lack of alignment- The company's efforts must be aligned and collaborated so that the
strategic goal of the business can be achieved. The companies work and efforts are often
misaligned which results in improper working in the organisation. In context of Premier
Inn, they have aligned their operations so that they can implement the strategies in the
business.
 Inability to track the progress- All the implementation strategy won't be any useful if the
company is not able to track their performance. The company must apply effective tools
in order to track the strategies are effective enough to support the objectives or not (Li,
2018). In context of Premier Inn, they need to enhance the performance and progress

tracker in the company so that they can know where they need improvement. They can
improvise their strategies and plans after analysing the performance of the company.

Effectiveness of implementing a corporate strategy
Corporate strategies are defined as planning methods which helps organisations in
aligning their different business operations in order to accomplishing their goals. This covers the
wide range of strategy level which assist in achieving growth and expanding business
(Veselovsky and et. al., 2019). There are various advantages of making effective corporate
strategy which Premier Inn could be able to experience which are mentioned below:
Enhance profitability: Through executing effective corporate strategy organisation
could be able to enhance profit in the market. For instance, if company gets involves with many
other organisation than it will diversify its business which could bring more profit to the firm.
The company must calculate the return of its investment before making any joint venture as it is
important for its overall growth. In context of Premier Inn, the company will increase their
revenue when they expand their operations into new countries. Acquiring of new hotels will
generate profits for the company, their strategy of market development is effective.
Increase Market share: The positive impact of implementing diversifying strategies the
company will be able to enhance its market share. The organisation could increase its market
share through introducing new products or services and explore new customer base (Nikolaeva,
2018). The company will be able to examine its competition and potential modifications in
preferences of consumers which could assist in minimizing the risk of decrement in market
share. The market share of Premier Inn will automatically increase when they apply strategy of
Market development in the business.
Provide Direction: Through making effective strategies to achieve organisational
objectives will not only provide company a functional purpose but also assist in knowing how to
handle uncertainty. It helps in providing correct and proper direction for its further development
which facilitate company in achieving growth. The market development strategy applied in
Premier Inn provides direction to the business, the employees and managers will know that they
need to put efforts in which direction.
Improves Decision making: The corporate strategies will help the company in
enhancing its decision making procedure (Regent and et. al.,2019). As company will face
uncertainties and different situation, this will help the firm in improving its way of thinking
about business operations. This will also encourage employees of the firm to participate in
decision making process and provide them clear direction to achieve organisational objectives.

Premier Inn's decision making skills got improved when they knew the kind of decisions they
need to make in order to strategically achieve the objective.
Improves Organisational skills: It will also help company in managing their business
activities properly. For instance, if company plans to expand its business than it will require
more fund and effective strategies that would result into development of management skills. It
will also provide employees an opportunity to understand growth of company and could be able
to perform productively (Solesvik, 2018). The skills and culture of Premier Inn hotel will also
get improved as the employees will learn new things that they are required to do in the hotel. The
strategic approach towards the accomplishment of objective would help the employees in
maintaining the decorum of the organisation and culture of the organisation would also get
enhanced.
Minimizing Risk: The effective corporate strategies help in reducing the risk of failure
of business operations. For instance, if company faces economic instability which could impact
its business than it could be minimized by implementing effective strategies. Corporate strategies
help in adding extra protection layer for the company. Strategic approach helps in eliminating the
risk factor from the business as Premier Inn would be aware about the uncertainties and they will
easily deal these risks.
Provides Sustainability: The corporate strategies help in measuring growth of company
which assist in examining the chances of survival. These strategies assist in developing
sustainability for the company (Zakharin and et. al., 2021). They help in evaluating the
effectiveness of business strategies and also assist in becoming stable independent company.
These corporate strategies help in making employees focused and encourage them to achieve
organisational objectives in more successful manner. It provides employees job satisfaction
which ensure the longevity of company in the market and assist in maximizing possibilities to
achieve growth. Premier Inn in order to sustain in the environment for a longer period of time
needs to manage the environment as these factors can impact the operations of business at high
extent.
CONCLUSION
From the above report it can be concluded that the hospitality industry has a lot of
competition and the organisation are required to develop and formulate strategies in the business
so that they can easily attain the objectives. These set strategies need to managed so that the

organisation can easily apply it in the course of the business. The company often faces
challenges in applying and implementing the strategies, there are certain issues that are faced by
the managers. The company need to overcome challenges such as lack of communication and
resources and ineffective training in order to implement the strategies in such a way that the
desired output is achieved in the organisation. These strategies are often effective in driving the
desired goals to the business. The company must maintain strategical management in the
business as this will help the organisation in dealing with all the aspects and factors related to the
business environment. Strategies also helps the business in managing the workforce of the
organisation and thus increasing the productivity in the business.

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Steps in Strategy Formulation Process. 2021. [Online] Available through :
<https://www.managementstudyguide.com/strategy-formulation-process.htm>./