Business Strategy of Premier Inn Hotels: A Comprehensive Report

This report provides a comprehensive analysis of the business strategy of Premier Inn Hotels, a prominent British multinational brand in the hospitality industry. It begins with an introduction to business strategy and its application, followed by an examination of the macro-environmental factors affecting Premier Inn, using PESTEL analysis to evaluate political, economic, social, technological, environmental, and legal influences. The report then delves into the internal environment, assessing Premier Inn's capabilities and weaknesses through SWOT and VRIO analyses. Further, Porter's five forces model is applied to understand the competitive landscape. The report concludes with a discussion of strategic planning within the context of Premier Inn, summarizing key findings and insights into the company's strategic approach.

Hospitality Business
Strategy

Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Macro Environment.....................................................................................................................3
TASK 2............................................................................................................................................5
Internal environment and the capabilities....................................................................................5
TASK 3............................................................................................................................................7
Porter’s five force Model.............................................................................................................7
TASK 4............................................................................................................................................8
Strategic Planning........................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy refers to the strategies or the tactics which is been used by the company
for the achievement of its objectives. The businesses use the different analyses or frameworks
which helps them in evaluating the both internal and external risks and factors. Here the internal
environment factors are those factors which are in the control of an organization and
organization and makes changes in them accordingly. For example the employees, resources,
materials, suppliers, values, mission, and the so on. Whereas the external factors are those factors
which put a huge impact upon the business and they work independently. These factors are out
of control of any organization and organization frames their policies by evaluating the risks these
factors can generate into the operational activities of an organization. For reference purpose this
report has taken an example of Primer Inn Hotels. It is a British multinational brand for hotel
chains. This company has the largest number of chains in UK. The company was established in
the year 1987 by Alison Britton.
This report discuss about the macro environment which put impact upon the working of an
organization. The report also discuss about the internal environment factors and analyzing of all
those factors. The Porter’s five force model of hotel Premier Inn is also presented into the report.
Apart from this the strategic planning has also been discussed.
TASK 1
Macro Environment
Macro environmental factors are the factors which are out of the reach of an organization.
These factors play an important role into the decision of any strategic plan. These factors are not
dependent upon any environmental factors, they work independently. These factors affect the
operations and activities of any organization in a huge way. It is very much essential or any
organization to evaluate this macro environment before making any strategy or any plan. The
external factors can be easily analyzed through PESTEL analyses. The pestel analyses helps an
organization in finding out the factors and the risks which micro environment can put in the
business (Bozkurt, Kalkan, and Arman, 2014). Through such the risks which are associated with
the external environment gets minimum or get eliminated. The pestel analyses of Premier Inn are
as follows:
Political: It is related with the rules and regulations which are being formed by the government.
The political factor includes taxes, foreign trade policies, corruption and so on. It is consider as a
major macro factor which influence the organization directly or indirectly but this factor also
provides the business with offers and opportunities. In 2010 the UK government for boosting up
their economy came up with many policies and schemes which were in favor of hospitality and
hotel industries. Apart from this the British Tourism Association along with Hospitality
Association also came up with various policies which were in favor of Tourism Industry. In the
year 2009, The Prime Minster of British announce the prize money for the industries which

programmed their operations which promotes “low carbon production”. This has created a boom
into the industries as they started planning to be one, including Premier Inn Hotels. Motivated by
such scheme or policies of government, the premier inn came up with a program called good
together which focuses on the reduction of CO2 emission.
Economic factor: Economic factor includes the factors which tell about the economic situation
and condition of nation. Factors which may include in this head may include income of the
people, disposable income, GDP of country, employment rate and the like. The UK government
in the year 2009 and 2012 held T20 Cricket World Cup and Olympics respectively into their
country (Cheng, 2013). This has helped the premier Inn very much as people outside of the
country came to UK for watching the games and for which they booked hotel rooms for their
stay. This has created a boom for the Hotel enabling them to book the room nonstop. The
Premier hotel grabbed the opportunity by establishing their hotels near stadiums. This has helped
the company in gaining more profits. The people of UK has a nice lifestyle and they can a good
degree of disposable income which has enable the company in setting up a high price for their
services as the people there can afford it.
Social factor: Social factors include the lifestyles, attitude, behavior, taste, preferences and so
on. From this the company or the organization can get to know about the perspective of their
target customers or market about a particular topic. As the living standards of the people are
increasing in a speed which benefits the Hospitality companies itself. The people now want to
opt for the services which make them relaxed from their busy schedule. The hotel premier inn
provides the luxurious services to the people where they can relax and enjoy. With the
improvement of everyday environments, individuals are happy to go through more cash in
appreciating life and decide to unwind subsequent to working, in light of the fact that their work
are so occupied and they have uncommon extra time. Accordingly, the administrations gave by
significant level lodgings simply satisfy the needs. In any case, after monetary emergency, the
residential interest has been powerless, and an expanding number of British individuals decide to
go on board rather than household travel. These social variables are plainly not advantage for the
inn business. The advertising technique Premier Inn embraced, as we depicted above, doesn't
focus on this social circumstance
Technical factor: This factor is related to technology advancements and awareness. It has been
observed that more the technology up gradation, more will be the development into the state.
Technologies ways can modernize and impact the activities in the business. Task in which
hospitability doesn't add elevated level of technology and the main concern of technology is
giving hotel division is directly link with electrical apparatuses which are accessible and
administration department of IT should be accessible for comfort of clients. The knowledge of
modernized IT sector helps in completing work in very less time in area of overall hotel chains.
It requires them to create a way for combining together gracefully chain the board frameworks.

Technology impacting items in terms of showcasing and advancement. The ways of working is
converting to online strategies. Premier Inn is commonly consider a decent look and intelligent
site in such regards. Reservations which are online helps administration are accessible in terms.
Administrators additionally takes the data base of clients and send messages continuously to
them in regards of offering new items and special battle.
Environmental factor: The special importance onCRSwhich is corporate social Responsibility
is one of the significant center skills of Premier Inn. Solid strategies in CSR are built in terms for
"Good Together" and White bread path forward. In 2008 “Good Together" program are made
after checking the corporate responsibilities procedure. The main aim of this methodology to
decrease relative carbon outflow 26% by 2020, aim to get waste of 80% from hotels and eateries
which was occupied from landfill by February 2012 and lessen hotel and water utilization of
eatery by 20% by 2020 (Ghosal, 2015). Condition strategy and vitality strategy are the guided
ways by Premier Inn to deal with the earth, which contain numerous standards which are
necessary to go along.
Legal factor: The cost will increase in working expense of spending in hotels by the UK
government because the lowest pay expanded 15.5% by law rates. This will hampers serious cost
to clients. To avoid issues and to have exclusive requirement they invented a way that is
Responsible Sourcing Policy, which characterizes the base gauges and standards of collaboration
of Premier Inn which is used in terms and conditions with providers, contractual workers and
colleagues. It directs the work with providers, as essential, to help in Policy executions.
TASK 2
Internal environment and the capabilities
The internal environment of an organization includes employees, mission, visions,
objectives, raw materials, suppliers, organizational structure and the so on. The internal factors
are under control of organization and the organization can change it according to their goals and
objectives. Analyses of these factors are very much necessary as they enable the organization in
valuation of internal capabilities and weaknesses (Wheelenand et. al., 2017). For this the
organizations uses the SWOT analyses and VRIO analyses.
SWOT analyses is the abbreviation of strength, weakness, opportunities and threats. It helps the
organization in ascertaining the qualities and weak areas it has so that the organization can make
its strategies accordingly. The SWOT analyses of Hotel Premier Inn are as follows:
Strengths:
 The company has a strong brand name
and market
 It has developed a customer base which
is very much supportive and strong.
Weakness:
 It has been observed that the hotels
have a big issue for the hygiene.
 Also the company has limited global
presence for which not majority of

 The Hotel provides the luxurious
services to their guests and takes a full
care for their needs.
 The services which the company has
are very much unique and satisfactory.
 It has the biggest hotel chain in the
whole UK.
 Also the company has strong brand
image and awareness which works as a
merit for the company.
countries or the people does not know
about the brand (Sung, and Ashton,
2014).
 The technology which is been used by
the company is very much out dated as
they does not cop up with advance
technologies.
Opportunities:
 The company has the opportunity to
start or diverse their business into new
markets.
 They can also merge with other
business which can help them in
growth and profits.
 The premier Inn Hotels can also opt for
expansion in which they can expand
their businesses through introducing
themselves to the counties where they
have not put their foot.
Threats:
 The company has the biggest threat
from the competitors.
 Increase in the prices of sources can
also create risks to the company.
 The political factor does also create risk
for the company as any change in rules
and regulations initiated by the
company can create loss or damage for
them.
VRIO Analyses:
The VRIO is again an internal analysis in which the organization evaluates about the factors
which creates value for the organization. Along with it the rarity, imitable and the organization is
also been evaluated. The VRIO analyses of Hotel Premier Inn are as follows:
Value: The company has the value for the services which is been used by the company. The
resource is very much unique and of good which creates value for the company. The employees
or the staff which is been hired by the company is very much professional and as in the
hospitality business the staff are the first people to interact with the guests, they has to be very
much well mannered and polite (Goeland et. al.,2012). The supply chain of the hotel is also very
much efficient which saves cost for the company. This efficient supply chain of the company is
also used for gaining the competitive advantage.
Rarity: The Companyhas the rare resources which creates benefits for the company. The staff or
the employees which is been hired by the company are also rare as they creates major value for
the organization. The policies and the strategies which is been used by the company is rare as it
helps the company in gaining the goal which they have decided for themselves.
Imitable: Here imitable are the factors which can get copied by any other company. The
resources which are used by the company can easily be getting imitable by any other company.

The professional staff or employees can also get hired by any other company or company can
give proper training and development programs which upgrades the skills and knowledge of their
employees, this would directly benefits the company only (Granados and Gupta, 2013). The
supply chain which is been adopted by the company can also get easily imitable by any other
company.
Organization: The company Hotel Premier inn tries its best to bring unique and quality services
to their guests, and they perform it by bring innovation and creative ideas into their service
offered. The company also has the good and equal opportunities for its employees which brings
success to them.
TASK 3
Porter’s five force Model
Threats for substitute: substitute items can exist or expected items and administrations which is
used in same capacity. Substitute items can reduces costs and provide better quality execution
and better worth which all the time the aftereffect of mechanical development. The Hotel sector
or industries in modernize city is not undermined by substitute items with the rare chances of
that in the midst of downturn residential travel may supplant global and certain goals supplant
progressively costly ones on cost grounds. In principle it refers that substitute items will perform
in similar capacity, very less costs, as well as give more excellent execution better help because
of mechanical progression. Same case in with Premier inn the hotel has to sometime lower its
price to meet its targeted sales. The competition or the substitutes has created so many burdens
upon the company.
Bargaining power of suppliers: It’s a fact that suppliers in hotel industries are more
concentrated than their clients and clients don’t order remaining critical portion of business in
light of fact that their clients don't tell to a possible significant relationship, for example, very
few or little clients versus larger or mass purchasers. Other side their clients go through separated
items and administrations or high exchanging costs (Hittmár, Varmus and Lendel, 2014). As the
industry has the more number of suppliers, the terms and conditions which are very much
flexible as the company can shift to any other supplier in the market. Here the company saves
cost as they are the people who can apply more terms and conditions to the suppliers.
Bargaining power of Buyers: The popularity and purchases of products from industries can be
remarkable if they are more brighter and focused than the players in hotel business and can
constrain reduces costs just as decrease the business' edge. They can purchase from the business
in undefined large volumes, in this way of doing down costs, or increment costs by interest of
more valuable items and administrations. On the other chance that the items and administrations
bought by purchasers need separation or exchanging costs, they can without much of thinking
finds there satisfactory level satisfied by taking best items. The more number of companies and

industries will setup in market the level of competition will go higher and buyers or purchasers
will get diverse varieties of items or products to fulfil their needs. Price of items need to be
cheaper to sustain in market for that company as demand will be higher for them. Buyers’ needs
should be first priority of industries as reviews of items or products can change the market
mindset.
Threat of entry: It refers to the degree of barrier the government has put upon the entry to that
particular industry or business. The degree of barrier in Hotel industry is very much less that
anybody can start the business in this industry wherever or whenever they want to. This has
created an extra burden upon the shoulders of the company as the number of competitors gets
increased into the industries. For this the company regularly has to bring the new and innovative
idea to gain competitive advantage.
TASK 4
Strategic Planning
The strategic planning of the company Premier Inn can ascertain through Ansoff growth
model. The Model has the 4 strategies which an organization can use to bring growth into their
system and business, and these are as follows:
Market penetration: The market penetration focus upon the growth of the business by targeting
their existing market. The company performs this through increase in their sales. The sales of the
company get increase through advertisements, promotional activities, discounts, offers and so on.
The premier Inn hotels adopt this strategy and try to increase their market share through the help
of above stated methods (Norton and Pine, 2013).
Market development: The market development is done through the increase in the market share
through expanding the business into new areas with the same product. The Premier Hotel does
that by putting steps into the markets which are new to them with the same concept and services
which they have for other countries. In this the company is more focused on gaining the market
growth.
Product development: Product development is the strategy where the company develops the
new product and targets the present existing market. As in respect to Hotel Premier inn the
company brings up many and various new services into their existing market to increase into the
customer base. Here the customers get attracted by seeing the new services which is being
introduced by the hotel and would eager to purchase it.
Diversification: It refers to the strategy where the organization develops a whole new product or
the service and target the whole new market also (Oldmanand Tomkins, 2018). Here the
company first performs the market research and knows about the taste ad preferences of the
customers, then they tries to develop the services which the customer finds unique and attractive.

As in the case with Hotel Premier inn the company has the brings up the new services with
accordance to the taste and culture of that new target market.
CONCLUSION
From the report discuss above, the macro environment which affects the working of an
organization has been explained. The macro environment is analyzed through PESTEL
framework. Similarly the internal analyses of the organization are done through SWOT and
VRIO framework. The report also includes the Porter’s five force model and the strategy plans
which the organization been adopts.
REFERENCES
Books and Journals

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