MGBBT0UBN Case Study: Premier Inn Hotel Chain Analysis 2021

This case study provides an in-depth analysis of Premier Inn's business organization and environment. It explores the organizational structure of Premier Inn Hotel, highlighting its functional structure and the roles of various departments. The report includes a business environment analysis using SWOT, identifying strengths such as profitability and high occupancy rates, weaknesses like refund issues and hygiene concerns, opportunities including strategic tie-ups and digital marketing investments, and threats like competition and the impact of COVID-19. Furthermore, the PESTLE analysis examines political, economic, social, technological, legal, and environmental factors affecting Premier Inn. The study concludes by emphasizing the importance of understanding business structure and environment for long-term sustainability and strategic decision-making, particularly in navigating challenges like the COVID-19 pandemic. Desklib offers a wealth of similar resources, including past papers and solved assignments, to aid students in their studies.

Understanding business
organisation

Table of Contents
INTRODUCTION...........................................................................................................................1
Organisation structure of Premier Inn Hotel....................................................................................1
Business environment analysis of Premier Inn Hotel .....................................................................2
SWOT ANALYSIS.....................................................................................................................3
Pestle analysis.............................................................................................................................4
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business organisation refers to an enterprise that develops to complete the aim of carry
on commercial business. However, business venture is concerned with the system of laws and
regulation that governs contract and exchange, property rights etc. Firms are of different types
such as partnership, sole proprietorship, limited liability, corporations etc. To complete this
project Premier Inn hotel is undertaken that is a prominent hotel of Whitbread group hotel since
1987. It is largest group in UK that attracts huge base of customers and generate high profitable
results. This hotel has around 72000 rooms and 800 hotels in number of countries like UK, UAE,
Jersey, Republic of Ireland etc. Premier Inn offer quality products and accommodation facilities
to guests and the hotel also indulge to take pride of support charity i.e. Great Ormond Street
Hospital Children Charity (GOSH). Recently pandemic attack affects many of business industry
but it majorly impact hospitality industry in terms of reducing sales by reducing guest visiting
(Agrifoglio, Metallo and Di Nauta, 2021). To understand the situation properly this report
includes environmental analysis of Premier Inn using SWOT or pestle analysis so that proper
strategies are developed to maintain proficiency of business. This report also present
organisation structure of Premier Inn because it helps to perform the activities smoothly so that
profits are earned in remarkable manner.
Organisation structure of Premier Inn Hotel
Organisation structure is a system that demonstrate how activities within organisation are
directed so that company achieves goals and targets on time duration. Thus, activities which are
included in organisation structure are rules, responsibilities, regulations that are useful to flow
an information among the different level of business organisation (Bapuji and et. al., 2020).
Hence, to properly analyse the COVID 19 impact on sales and profitability of hospitality sector it
is essential to overview organisational structure so that decisions are taken accordingly that help
hotel in long term survival in pandemic situation. It is so, because structure of company is useful
to outline the performing strategies so that Premier Inn easily cope up with COVID 19 situation
and attracts huge base of customers. However, Premier Inn is a largest hotel group of Whitbread
group in UK on the basis of their size and services that they offered to customers. Premier Inn
adopts Functional structure within working environment where every departments are segmented
in functions and activities are easily attained.
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Functional structure- It is an effective type of organisational structure where businesses
are organised as per roles and skills into small departments such as sales department, marketing
department, finance department, front office department, IT department etc. In case of Premier
Inn, Hotel adopts this structure to handle situation that are present within company. Functional
structure employees are specialise in their own work because they are highly skilled to
performed their task on time. Due to this structure clarity is maintained among employees as
because of this they understand own and other roles properly. This is effective for Hotel to
handle COVID 19 situation situation properly and lead the market by attracting large base of
customers. On the same time due to this structure complexity in attaining and understanding task
is created and this cause delay in decision making due to this Hotel face difficulty in succession
plan.
Illustration 1: Premier Inn, Organisational chart
Business environment analysis of Premier Inn Hotel
Business environment is an accumulation of all external and internal factors of business
enterprises that are highly influence business functions. It mainly cover political, social,
technological, economical factors etc. that are useful to maintain relation of business with market
(Cosenz and Bivona, 2021). In context of Premier Inn, it is essential to analyse business
environment so that atmosphere created due to COVID 19 on company is recognised effectively.
For this SWOT and Pestle analysis of Premier Inn is presented below:
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SWOT ANALYSIS
It refers to a technique that is used to recognise the company internal strength and
weakness and external opportunities and threats. In context of Premier Inn, swot analysis is
presented below:
Strength
 Profitability- The main strength of Premier Inn is their popularity in market of UK. The
hotel is recognised for service quality services to customers and received many awards.
Hence, due to having these qualities firm generate more profitable results in COVID 19
time.
 High occupancy rate- It is another strength of Premier Inn. The occupancy rate of Hotel
is 76.3% and it shows good market position of hotel within marketplace. Therefore many
visitors like their pillows, Cosy Duvet, blackout curtains. This helps premier inn to retain
customers for longer time period. At the time of COVID 19, due to effective occupancy
rate company enjoy customers purchase.
Weaknesses
 Refund issues- It is one of the major weakness that Premier Inn face. The hotel refuse to
refund the money to customers who booked to stay at the time of strict locked down. This
impact the company image in negative manner (Guschke and Sløk-Andersen, 2021).
 High issues related to hygiene- Premier inn major issues is not offer proper hygienic
services to customers that impact customers buying purchase in negative manner. Due to
unhygienic services company highly suffer in COVID 19 time because at that time guest
prefer more safety and hygiene while avail services of hotel.
Opportunities
 Strategic tie-ups with other firms- It is one of the best opportunity for Premier Inn at
the time of COVID 19 and attracts huge base of customers within the complex situation.
The hotel emphasis on tie-ups with Costa Coffee that helps to develop brand image at
market and in many more countries so that more profitable results are enjoyed.
 More investment within digital marketing- In current marketplace, technological
advancement is enhanced and because of this digital marketing is boom. Premier Inn
invest more in digital marketing by using social media applications such as Instagram,
Facebook etc. that are useful to create brand image and developing awareness about
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services so that people are customised services in hotel accordingly. At the COVID 19,
digitalisation is an emerging tool to attract customer base and maximise profitability.
Threats
 More competitors present at marketplace- It is one of the major threat that Premier Inn
face while marketing their services and attract customers. In UK and other countries
many other hotels such as Ibis, Travelodge etc. are exist with good quality services
 Decline in visitors visits due to COVID 19 situation- It is another threat that Premier
Inn face and it impact company profitability at marketplace. It is done because due to
pandemic attack people prefer to stay at home rather than spend their time at hotels.
Pestle analysis
This represent as a framework which is used to scan environmental component of
strategic management. In terms of Premier Inn, Pestle analysis factors are demonstrated below:
 Political factor- It includes government stability, tax regulation etc. Government of UK
is highly stable and tax rates are not so high that is profitable to Premier Inn to sustain in
marketplace (Madsen, 2020). This also support Premier Inn to operate business
operations appropriately and attain more profitable results. However, COVID 19 impact
the currency as because of pandemic major fluctuations done in currency amount that
affects firm profit margin and revenues. This negatively affects Premier Inn purchase
volume.
 Economical factor- It includes GDP, spending power of Buyers etc. In UK growth rate
is high due to which customers spend more money for their enjoyment. It is positively
effective for Premier Inn to capture high market position and developing sales. But on the
other hand COVID 19 impact UK economy due to which high inflation rate is regulated
in UK that negatively affects customers buying decisions because they avoid to book
hotels rooms and services rather than they prefer to order meals at homes.
 Social factor- People of UK are highly advanced and modern, health and safety
conscious etc. Due to modern perception of UK people they emphasis on spend their
holidays and leisure time by booking rooms at hotels. This positively impact Premier Inn
profits and sales (Reese, 2020). On the other hand Premier Inn does not follow hygiene
and safety precess for customers due to which people are not attracted towards hotel at
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the time of COVID 19 time. This will impact negatively on sales and profits of Premier
Inn.
 Technological factor- In present time, technology is an emerging technology and UK is
a country that is technology advanced. In case of Premier Inn, this factor positively
impact the sales and profits because hotel use advanced technology to advertise their
services. Therefore it also impact negatively on Premier Inn because investing in
technology needs more capital that affects operational cost of business.
 Legal factor- This factor represent laws and regulations which are imposed by
government for benefits of employees. Premier Inn manager adopts equality law act for
employees where they treat every staff members equally (Watson and Detjen, 2020). This
positively affects hotel sales because employees work with full satisfaction. On the other
side if they not equally treat employees than they does not work effectively and it reduce
customer base.
 Environmental factor- This factor shows environment related practices which are
followed by organisation not to harm environment (Upadhyay and Kumar, 2020). In
terms of Premier Inn, they adopts sustainable practice while offer services to customers
so that it does not harm environment and attracts large base of customers.
CONCLUSION
By above Premier Inn information it is concluded that to sustain long life within business
marketplace it is important to understand business structure and environment so that issues are
resolved and solutions are framed for firm betterment. This report develops an understanding
related to Premier Inn organisation structure that is effective to work systematically so the targets
are attained properly even in pandemic situation. Hence to maintain sustainability in marketplace
of Premier Inn this report analyse business environment using swot or pestle. Both these tools are
effective to understand company situation in marketplace and useful for management to develop
strategies to overcome with the COVID 19 situation until 2023 or later.
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REFERENCES
Books and Journals
Agrifoglio, R., Metallo, C. and Di Nauta, P., 2021. Understanding Knowledge Management in
Public Organizations through the Organizational Knowing Perspective: A Systematic
Literature Review and Bibliometric Analysis. Public Organization Review. 21(1).
pp.137-156.
Bapuji, H. and et. al., 2020. Business and society research in times of the corona crisis.
Cosenz, F. and Bivona, E., 2021. Fostering growth patterns of SMEs through business model
innovation. A tailored dynamic business modelling approach. Journal of Business
Research, 130, pp.658-669.
Guschke, B. and Sløk-Andersen, B., 2021. Paying Attention to Tension. Towards a New
Understanding of the Organizational Mechanisms Enabling Sexual
Harassment. Ephemera: Theory & politics in organization.
Madsen, H.L., 2020. Business model innovation and the global ecosystem for sustainable
development. Journal of Cleaner Production, 247, p.119102.
Reese, S., 2020. Reflecting on impacts of Peter Senge’s Fifth Discipline on learning
organizations. The Learning Organization.
Upadhyay, P. and Kumar, A., 2020. The intermediating role of organizational culture and
internal analytical knowledge between the capability of big data analytics and a firm’s
performance. International Journal of Information Management, 52, p.102100.
Watson, K. and Detjen, J., 2020. The Next Smart Step: How to Overcome Gender Stereotypes
and Build a Stronger Organization. Charlesbridge Publishing.
Online
Whitbread, 2021. [Online]. Available through: <https://theorg.com/org/whitbread/org-chart>
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