Premier Inn: Business Organisation and Environment Case Study

This case study delves into the business organisation of Premier Inn, a leading British hotel chain, by examining its organisational structure, conducting a SWOT analysis to evaluate its competitive position, and performing a PESTEL analysis to assess the macro-environmental factors influencing its operations. The study highlights Premier Inn's functional organisational structure, its strengths in brand image and occupancy rates, weaknesses such as limited global presence, opportunities for growth in Germany and new markets, and threats from competitors and legal issues. The PESTEL analysis covers political, economic, sociocultural, technological, environmental, and legal factors impacting the hotel industry. Ultimately, the study underscores the importance of organisational structure and strategic planning for the growth and development of Premier Inn, offering insights into how the company can leverage its strengths and address its weaknesses to thrive in the competitive hospitality market. Desklib provides students access to similar case studies and solved assignments.

BUSINESS
ORGANIZATION
Table of Contents

INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
ORGANIZATIONAL STRUCTURE.........................................................................................3
SWOT analysis............................................................................................................................3
PESTEL analysis.........................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Organizational structure is known as the explanation of work flow and responsibilities,it
is a guide for day to day governance if employees tasks,interactions and reporting. It is a fast
means for employees for understanding where they should go for work related need for specific
issues. A company's organizational structure must be well designed and important part of the
strategic planning. It affects the operations of the organization and experience of consumers
significantly. Organizational structure balances the authority and responsibility in the company.
Structure is a hierarchy for the organization and governs the information flow in the company.
The organization selected for this project is Premier Inn. It is a British limited service hotel chain
and is the largest hotel brand in United Kingdom with approximately more than 70,000 rooms
and 800 hotels. Its hotel are located in different prime locations including airports,universities
etc. It was founded by Whitbread in 1987. It serves in UK,UAE,Germany and many other
countries.
MAIN BODY
ORGANIZATIONAL STRUCTURE
The hotel Premier Inn has chosen functional structure in its organization for organizing
work and employees. In this structure the employees are based in groups as per their skills and
knowledge. It helps them to vertically structure departments with their roles from head of
finance and manufacturing departments to consumer services. It contains differentiated units
which reports to the single authority which is the senior management. In hotel each units controls
and manages single aspect of goods and services like IT, marketing,development and research.
They are called silos due to the independent function(Baheti and Lenka, 2021 ). They have their
own vertical structure of management. Employees in each departments can communicate with
each other effectively and the heads of department can also communicate with each other. It
works well in the environment which is stable and has continuity in operations,hotel Premier Inn
meets all these requirements. The goal of this structure is to put information and employees for
single activity at one place. It helps hotel to run the business and earn profits. The main
advantage of this structure is it helps hotel to group employees which have same experience and
skills as it makes the manufacturing more efficient and of superior quality. The roles and tasks
do not change and less time is spend in learning and responsibility is clear. The hierarchy is

simple as employees know that to which manager they are answerable to. This structure reduces
confusion and streamlines communication in employees(Czinkota and et, al., 2021).
SWOT analysis
It is the model used by organizations for evaluating competitive position of the
organization and development of strategic planning. It does assessment of internal and external
factors and the present and future potential(Erdem and Şeker, 2022).
STRENGHTS WEAKNESSES
 Occupancy rate- Hotel has occupancy
rate more than 76% and owns good
position in the sector. Guests admire
the interior decoration and products
served in the hotel.
 Brand image- Hotel has established a
well known image in the United
Kingdom in past few years. It is
famous for its kid friendly atmosphere
and bike friendly image which is a
great selling point.
 Limited global presence- Hotel
Premier Inn is not presented in the
major markets of the world. It only
operates in limited nations whereas its
all major competitors have global
presence.
 Hygiene issues- Hotel is facing these
issues from a long time as the
consumers are complaining about the
hygiene. Trade unions are also looking
in to this matter(Ferrás-Hernández,
2020).
OPPORTUNITIES THREATS
 Growth in Germany- Germany is the
main market for the hotel as its more
than 25% profits come from German
operations. Hotel must expand there
business in the Germany and near by
areas it will help them to achieve more
revenue and profits. Hotel must use
effective marketing strategies for
 Legal threats- As many consumers are
complaining about the various issues
like hygiene,refund issues the
authorities are looking to inspect the
hotel and take necessary actions
required in it. Company must resolve
all issues with proper strategy and plan.

attracting more consumers.
 New markets- As hotel is not
presented in many countries ,this a big
opportunities for the hotel as they can
expand their business in new markets
and countries. It will help them for
earning more revenue and profitability
in their business(Mitchell, Clark and
Damonte, 2018) .
 Competitors- There are many
competitors like Holiday Inn,Marriott
and many which are offering services to
guests in the budget hotel segment at
low cost in comparison to hotel Premier
Inn. This is affecting the business and
profits of the company.
The analysis concludes that Premier Inn is the main hotel in the industry having a good
brand image. It is the leader in budget hotel segment in UK. In hotel industry price is the main
component. Hotel must make strategy for developing the business.

PESTEL analysis
It is the model used by marketers for analysing and monitoring the macro environmental
factors affecting the business of organization. `It is used by the management for the process of
planning and risk assessment(Trip and Badulescu, 2020. It is a fundamental research for
implementation of any strategy. Here is the analysis of Premier Inn-
POILITICAL FACTORS- Hotel industry is dependent on tourism and rules and
regulations of the nation. Due to this if the government is open towards tourism laws and taxes
then the business of the hotels run very profitably. If governments are providing necessary
facilities and securities to the guests then it help the hotels to run the business very well. If
authorities are strict towards the industry then the hotel are likely to suffer.
ECONOMIC FACTORS- Any change in the economy will affect the operations of the
business. Premier hotel operates in the budget segment as well as in the luxury segment .
Consumers ability for affording luxury hotels decreases by the recessions,inflations and other
economic factors. It also increases the demand for budget hotels increasing verticals of the
sector. Currency rates are the economic factors which impacts the ability of travellers for
employing hotel services(Unnikrishnan, Tikoria and Agariya, 2019).
SOCIOCULTURAL FACTORS- Young generations are passionate about travelling,it
is fuelled by the social media platforms where consumers exchange experiences and create
environment for travelling. It is increasing the expenditure capabilities of the consumers and by
this people use hotel services which results in demand for hotels. Hotels must provide better
services to the guests and discounts to them so they can afford luxury stays.
TECHNOLOGICAL FACTORS- Technology is changing day by day and Premier Inn
hotel is also using more and more technology in their hotels. All the premises are filled with
CCTV cameras for providing security to the consumers. Today many hotels are doing bookings
via the means of online platforms. Premier Inn is also providing this facility to the consumers by
the apps and websites ,it has increased the cost of the hotel but also generated revenue for the
hotel.
ENVIRONMENTAL FACTORS- United Kingdom has good weather but sometimes
due to severe weather conditions it has been difficult for the hotels to survive in the industry.
Due to the lack of demand and inability of travelling hotel is facing loss in foot fall. Hotels are in

pressure by governments for reducing carbon footprints as the hotels use massive amount of
disposable items which is causing serious concerns for the environment. Many of the competitors
of Premier Inn are shifting towards the biodegrade items for countering the crisis of climate.
This analysis states that hotel must provide a clear look in the operations of the business and its
performance in global markets. The hotel industry is in boom now a days. It will increase in
future and hotel must develop a strategy for growing business. There are many political threats
which industry is facing but Premier Inn can counter it by using different approaches.
CONCLUSION
This project concludes that structure of the organization plays a important part in the
growth and development of the organization. It helps the organization to clearly define the roles
and responsibilities of the employees and managers. It maintains the discipline in the company
and employees know very well about to whom they have to report. The Pestle analysis was done
to analyse the factors affecting the business. This helps businesses to understand the market
dynamics and improve business regularly. It was done for highlighting the various scenarios
impacting the business. Swot analysis was also done for helping the Premier Inn to devise a plan
for developing the business. It is a tool used by management of hotels for evaluating the
strengths,weaknesses,opportunities and threats of the business.

REFERENCES
Books and Journals
Baheti, S.S. and Lenka, U., 2021. Scientometric evaluation of International Journal of Business
Excellence (2008-2019). International Journal of Business Excellence, 25(4), pp.515-
548.
Czinkota, M.R., and et, al., 2021. Marketing Planning. In Marketing Management (pp. 43-90).
Springer, Cham.
Erdem, A. and Şeker, F., 2022. Tourist Experience and Digital Transformation. In Handbook of
Research on Digital Communications, Internet of Things, and the Future of Cultural
Tourism (pp. 103-120). IGI Global.
Ferrás-Hernández, X., 2020. Rethinking Industry 4.0: is there life beyond
manufacturing?. International Journal of Business Environment, 11(4), pp.404-416.
Mitchell, M., Clark, N. and Damonte, T., 2018. The Migration of Business Strategies from the
Hospitality Industry to Athletics Marketing. Sport Journal.
Trip, D. and Badulescu, D., 2020, September. Touchless Tourism: How New Tourism Will Look
like. In Griffiths School of Management and IT Annual Conference on Business,
Entrepreneurship and Ethics (pp. 85-100). Springer, Cham.
Unnikrishnan, P.M., Tikoria, J. and Agariya, A.K., 2019. TQM to business excellence: A
research journey (1985-2018). International Journal of Business Excellence, 19(3),
pp.323-363.