Case Study: Premier Inn - Business Types, Functions, and Environment

This case study examines Premier Inn, a British hotel chain, focusing on its organizational structure, SWOT analysis, and PESTLE analysis. The report outlines Premier Inn's big and tall organizational structure, communication channels, and employee benefits. The SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats, including its strong UK presence, customer satisfaction, competition, and the impact of COVID-19. The PESTLE analysis explores the political, economic, social, technological, legal, and environmental factors affecting Premier Inn, such as government policies, economic recession, changing customer preferences, technological advancements, wage increases, and environmental initiatives. The study concludes by emphasizing the importance of understanding these factors for the company's success and growth. Desklib provides access to similar case studies and academic resources for students.

CASE STUDY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Organisational structure of Premier Inn......................................................................................3
SWOT analysis of Premier Inn....................................................................................................4
PESTLE Analysis of Premier Inn................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
This report is a case study for a British chain of hotels called Premier Inn which was
established by Whitbred in 1987. Premier Inn provides limited services and is UK’s largest
hotel brand with around 800 hotels. The hotel chain has hotels situated in various locations and
countries like UK, UAE, Ireland, Germany and Qatar. In this report, the organisational
structure of Premier Inn will be outlined. There are two sub-brands, one which is called Hub by
Premier has small rooms with in built techonolgy like tablets, second is Zip by Premier which
has pod like rooms. This report will also highlight the internal and external factors that affect
the organisation and its operations. These factors will be examined using SWOT analysis that
identifies the internal factors like strengths, weaknesses, and external factors like opportunities
and threats and using PESTLE analysis which identifies the political, economical, social,
technological, legal and environmental factors that have an impact on the organisation’s
functions.
MAIN BODY
Organisational structure of Premier Inn
Premier Inn is a big and tall organisational structure. The managers have a large support of
network even while being in charge of the operations of their respective sites. An
organisational structure defines the process carried out and the activities that are done to
achieve the organisational goal(Nene and Pillay, 2019). The members of higher level of the
organisation take out time from their schedule to make themselves available whenever needed
as for suggestions and help, the employees contact the person of an appropriate level
depending on the complexity of the issue or problem. All the details regarding the working life
in the company, legal documents and general advices are available to the employees through
company’s intranet in which all sections have a chat function to enable employees to contact
and expert of the field and take advices. The most used communication channel is through a
message with a link that scrolls along the employees’ computer screen. This link will lead them

to the required page on the company’s intranet. The company also offers its employees shares
at a discounted rate under the ‘Whitbred sharesaver scheme’.
Working in the interest of the stakeholders is very essential in smooth functioning of the
organisation(Dicle and Okan, 2021). The organisation follows a strategy to create long tern
gains through dividends and earning for the sustainable shareholders along with short term
return on capital through implementation in three important areas- by growing and innovating
in the UK market which symbolises gain in market share, growing in Germany by focusing on
its strengths which will lead to growth of the organisation and supporting long term growth
through by enhancing its capabilities which will yield profits at attractive rates.
The company uses ‘Google my business’ for taking its promotion to the next level and Yext
enables the company to manage their information on their sites, mobile apps and entire
knowledge network that consists of more than 150 maps, search engines, apps, and social
network sites(Organisational structure of Premier Inn, 2022). Premier Inn is also trying to be
active in its CSR activities by reducing the use of paper, water, electricity, etc. and has also
been recognised for being environmental friendly.
SWOT analysis of Premier Inn
SWOT analysis looks into the factors that affect the company and signifies the company’s
Strengths, Weaknesses, Opportunities and Threats(Benzaghta and et.al., 2021).
Strengths
 Premier Inn has around 800 hotels in UK and hence has a very strong presence in the
country
 It is preferred by guests as can be seen from its occupancy rate or over 76% and ensures
higher level of customer satisfaction.
 The hotels are located near places like universities, airports, etc. that are convenient for
various segments of customers
 It has created a good brand image by receiving various awards and titles as one of the
best hotel chains in Britain like ‘best UK hotel brand’ at British travels award, etc. and
also by offering various services to the guests.
 It has technically advanced and automated supply mechanism.

Weaknesses
 Intense competition in the industry lead to low profit margins
 It does not have a very wide global presence
 The refund issues arise during Covid-19 has made customers dissatisfied.
 The hygiene issues reported during an undercover filming has greatly affected the
reputation of the hotel.
Opportunities
 It can seize the opportunity to enter and explore the new markets and countries as
tourism is likely to rise even more(Swot Analysis of Premier Inn, 2022.).
 Renovation and new decor can help attract the guests and build stronger brand value
using customer satisfaction and experience.
 The company should also invest in digital marketing.
Threats
 There are also several legal threats from health and safety executives due to certain
issues.
 Covid-19 and lockdowns have had a great impact on the hotel chain. And if timely
actions are not taken to cover the losses, the company can suffer a lot.
 The main threat to a hotel chain is from the large number of competitors(Namugenyi,
Nimmagadda and Reiners, 2019).
 Increasing operating costs due to rise in wages of employees can also become a great
threat if not dealt with.
PESTLE Analysis of Premier Inn
PESTLE Analysis determines the external factors that affects the organisation and its
functions(Setyadi and Wahyudin, 2020). It analyses the Political, Economical, Social,
Technological, Legal and Environmental factors.
Political factors

 The UK government has reduced corporate taxes in past few years, which resulted in
increase in profitability. But the increase in VAT balanced the profits and hence no
significant rise can be seen.
 The government also considers the hospitality industry as one of the key players in
economic growth(VÁZQUEZ and et.al., 2018).
 The government invests in hospitality sectors to generate employment.
Economical factors The economic recession in UK has greatly affected the hospitality industry. People have less disposable income to spend on hotels and vacations, due to which low
interest rates are being charged that can improve the economy of the country.
Social or Socio-Cultural factors
 The rise in living costs has made various changes in people’s preferences. Now, people
prefer products and services that can provide high value for money being spent.
 The hotels look forward to seasonal holidays as people tend to spend money during
these days which can profit the hotel as they are highly depended on tourism.
 Guests also prefer easy accessibility to the hotels and variable rates for the rooms
 Customer feedback and responsiveness of hotel towards customer need and demands is
also an important factor that is considered.
 Premier Inn provided 10000 new jobs and school placements and are aiming to raise
around 5 million for charity(Pestle analysis of Premier Inn, 2022). It can be seen that
the hotel chain is really working towards the betterment of their community.
Technological factors
 The hotel chain has their own reservation system online.
 They also maintain a good website to interact with the guests and potential customers.
 The technology is used to send messages and emails regarding new offers and
promotions to the customers.
 The rapid growth of social media can be useful for the hotel to target wide range of
audience at once.
Legal factors

 The wage rate has been increased by around 15% by the government of UK. This lead
to an increase in the operational cost along with the production cost that makes it
difficult for the hotel chain to offer services at competitive rates to the guests.
 They have developed a Responsible Sourcing Policy which states the principles and
minimum standards that are expected from business partners, contractors and suppliers.
This is done to maintain their standard and avoid legal issues.
 The company must be cautious as it can face legal charges and complaints from health
and safety executives due to certain unhygienic activities found during an undercover
filming.
Environmental factors Now-a-days, customers prefer brands and businesses that are socially responsible.
Hence, to become environment friendly, the Premier Inn formed a ‘Good Together’
program(Pestle analysis of Premier Inn, 2022). They have installed energy savings
bulbs, tried to cut down paper usage and also reduce water usage by installing water
efficient showers. They also adopted a sourcing policy which ensures that the suppliers should meet
international standards of labour rights and should be paid fairly. Negative environmental changes like floods, earthquakes, etc. can lead to disruption in
the business for hotels as transportation is greatly affected which in turn negatively
impacts tourism.
CONCLUSION
The report studied the case of Premier Inn by evaluating its organisational structure so as to get a
better understanding of the company and learn about its advertisements and its take on CSR
activities. Further, the report examined the factors that have an impact on its organisational
structure, its operations and activities and hence organisation as a whole. These factors also play
a significant role in the success, growth and profitability of the organisation. SWOT analysis and
PESTLE analysis were used to examine these factors. These factors determined the impact of
emerging situations like pandemic, crisis, lockdowns, changes in government and economic
policies on the business. SWOT analysis stated the strengths and opportunities that could be

seized and the weaknesses and threats that are to be taken care of if the company does not want
any hindrance in its success.

REFERENCES
Books and Journals
Benzaghta, M. A. and et.al., 2021. SWOT analysis applications: An integrative literature
review. Journal of Global Business Insights. 6(1). pp.55-73.
Dicle, U. and Okan, R. Y., 2021. Linking organisational structure, culture and innovation
capability: mediating role of strategic decision-making process. International Journal
of Business Innovation and Research. 26(3). pp.328-349.
Namugenyi, C., Nimmagadda, S. L. and Reiners, T., 2019. Design of a SWOT analysis model
and its evaluation in diverse digital business ecosystem contexts. Procedia Computer
Science. 159. pp.1145-1154.
Nene, S. W. and Pillay, A. S., 2019. An investigation of the impact of organisational structure
on organisational performance. Financial Risk and Management Reviews. 5(1). pp.10-
24.
Setyadi, A. and Wahyudin, E. R., 2020. Pestle Analysis Management Risk Iso 31000: 2018
Toward Integrated Management System (Iso 9001: 2015, Iso 14001: 2015, Iso 45001:
2018) For The Construction Services Industry In Indonesia. Solid State
Technology. 63(6). pp.6222-6281.
VÁZQUEZ, M. L. and et.al., 2018. A framework for PEST analysis based on fuzzy
decision maps. Espacios, 39, p.13.
Online
Organisational structure of Premier Inn. 2022. Available Through:<
https://www.studymode.com/essays/Premier-Inn-Organisational-Structure-
3243C49A56D4253F.html>
Swot Analysis of Premier Inn. 2022. Available through:< https://phdessay.com/strategic-
analysis-swot-pestel-porter-of-premier-inn-whitbread-plc/>
Pestle analysis of Premier Inn. 2022. Available through:<
https://www.coursehero.com/file/24384218/PESTLE-ANALYSISdocx/>
Pestle analysis of Premier Inn. 2022. Available through:< https://topnotchresearch.org/pestel-
analysis/how-to-write-pestle-analysis-of-premier-inn/>