Business and Business Environment: An Analysis of Whitbread PLC

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Business and Business Environment
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Table of Contents
Introduction...................................................................................................................... 3
Task 1- LO1 and LO2.......................................................................................................4
Task 2- LO3 and LO4.......................................................................................................9
Conclusion..................................................................................................................... 15
Reference List................................................................................................................ 16
Appendix........................................................................................................................ 18
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Introduction
The business environment includes a set of implications with which various
organisations in respective industries are able to undertake decisions that enable the
same to shape their expectations for trade profitability and productivity. The particular
study is divided into two major sections. The first section of the study shall identify and
analyse various types of organisations, their structures, business goals, products,
services and respective legal structures for their business. The second section of the
study shall focus on identifying the external and internal environmental factors of
Whitbread PLC, UK that influences the trade implications and decisions making of the
same.
Whitbread PLC, UK is among the major hotel and restaurant chain organisation that
exists within the national parameters. Samuel Whitbread founded the organisation in
the year 1742 and since then, it has able to serve the target customers of the leisure
hospitality industry of UK (whitbread.co.uk, 2019). The organisation is currently situated
Houghton Regis, England and offers its hospitality and restaurant services across
China, Dubai, India and nations all across the globe.
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Task 1- LO1 and LO2
Introduction
The particular section of the study shall explain and analyse three different types of
organisations with evidence about their scope, size, legal structure and respective
products and services. The later section shall evaluate the interrelationship of
organisational operations of Whitbread PLC and understand how the same influences
the organisation in decision-making.
P1 Explain different types and purposes of organisations; public, private and
voluntary sectors and legal structures
There are chiefly three types of organizations, which influence the market and drive it by
their actions. These are public, private and voluntary sector organizations.
Public: The public sector comprises fundamentally of the organizations, which are
directly under the government. All the actions related to these organizations and the
turnover of these organizations are taken and made by the government directly and not
by any single person or company. These do not allow any of their shares to any private
or free body (Bason, 2018). The government collects the capital for the working of these
bodies through different methods like taxes given by the people, fees and by different
types of deposits from the bodies of the government. Distinct government organizations
have their discrete ways of collecting their endowment. Examples of public sectors are
hospitals, schools, police services etc. Public sector consists of three hierarchy of
powers mainly federal, regional and local body. These bodies provide services rather
than producing a product for profit (Cannon and Hillebrandt, 2016). One example of
such public sector in the UK is The Ministry of Defence. It is a British government
wing, which is held in charge of enacting the defence policy set the British government
and acting upon them. It also aims to strengthen the security of the country. It holds
responsible for building solidity and tranquillity in the country.
Private: The purposes of private organisations all across the globe are to attain
productivity and profitability for respective business foundations by serving to the need
and preferences of targeted customers (Mackintosh et al., 2016). Whitbread PLC is a
private organisation that operates in the leisure hospitality industry of UK. The
organisation was founded with the sole purpose to incur benefits for the involved
stakeholders and owners of the business foundation by providing the national
populations as well as international tourists with best-suited hospitality services. Since
its establishment, the organisation has able to expand its business realms entirely within
the national boundaries of the UK as well as in other nation’s worldwide
(whitbread.co.uk, 2019). Some of the famous divisions of the particular organisation that
are patented under the name of Whitbread are Premier Inn, Brewers Fayre, Beefeater,
Whitbread Inns, and Table-Table. Richard Baker and Alison Briitain that are
Chairperson and CEO of the particular private organisation respectively currently
oversee the organisational goals and business objectives.
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Voluntary: These are bodies, which function for a social cause towards the society like,
providing free healthcare, providing clothes and foods to the people without lieu of any
monetary profit. It is also regarded as the ‘Third Organization’. It is non-fruitful and not
monitored by government organisations (Butler and Wilson, 2015). All its benefits are
used for social cause and help of people. An instance of such an organization is Age
UK; it is a non-profitable organization, which takes care of the elderly people in every
way like healthcare, loneliness, loans etc. It covers all the services required to provide a
better life for the elderly (Nikolova, 2015).
P2 Explain the size and scope of a range of different types of organisations.
M1 Analyse how the structure, size and scope of different organisations link to
the business objectives and product and services offered by the organisation
As mentioned in the above section, Whitbread PLC follows the Public Limited
Company legal structure to offer its hospitality goods and commodities within the
nation. The particular legal structure of the organisation allows the business owners to
serve the national populations and earn revenues for their business so that they are
able to shape their trade operations in the future. The organisational workforce of
Whitbread PLC includes 50,000 employees that allow the organisation to fall under the
large private level organisation of the UK (whitbread.co.uk, 2019). With the help of the
estimated workforce, the organisation is able to handle trade implications of all its five
divisions (Bower, 2018). These five divisions of the organisation and a higher level of
respective trade productivity, Whitbread PLC has able to set effective brand image and
customer repertoire within the national premises of UK. The business objectives as well
as mission of the particular organisation is to reach expected levels of business
productivity as well as profitability through serving customer’s needs and preferences.
Ministry of Defence is a public sector covered under the Defence Council of UK. The
total strength of the Ministry of Defence is 194,140 personnel. It aims at providing
security and tranquillity to the country and is governed by the Defence Council of UK.
The mission and vision of the Ministry of Defence UK are to defend the United Kingdom
and its strength and maintain international stability throughout and behave as a good
force for the world (Busachi et al., 2016).
The legal structure followed by the Ministry of Defence is a general partnership. In this
kind of partnership, both partners share the assets, the profits and liability thus providing
an obligation of unlimited liability to the other. This same is observed between the
Ministry of Defence and Defence Council (gov.uk, 2019).
Age UK is an example of a voluntary sector organization and follows the Non-profit
Organisation (NPO) legal structure for their respective trade implications. It does not
work for monetary profits nor works under the government. All its income and profits are
used for the social goodwill of elderly people. It is a registered charity in the UK, which
was launched on 1 April 2009. It is the UK’s largest charity for elderly individuals. Before
Age UK, it functioned under the name of “Age Concern and Help the Aged”. Age UK
has a net worth of £160 million raised through funding and £64 million raised in the year
2017 (ageuk.org.uk, 2019). It helps older people in terms of Healthcare, trauma. It also
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Whitbread PLC, UK
Premier
Inn
Table-
Table
Whitbrea
d Inns
BeefeaterBrewers
Fayre
Marketing
Inventory
Human Resource
Marketing
Inventory
Human Resource
Marketing
Inventory
Human Resource
Marketing
Inventory
Human Resource
Marketing
Inventory
Human Resource
helps the people by making them aware of their rights and also helps them in loneliness
and depravity. Its mission, vision is to “Make UK a great place to grow older” which a
great step is, and it must be followed by every other country in the world. It holds no
business motive but only a social motive of serving the old people. It has 520 charity
shops all over the UK (Walker and Markowski, 2017).
P3 Explain the relationship between different organisational functions and how
they link to organisational objectives and structure
M2 Analyse the advantages and disadvantages of interrelationships between
organisational functions and the impact that can have upon organisational
structure.
Whitbread PLC, UK follows the Matrix Organisational structure as the business
operations of the organisation is divided into various functions that are different in
different divisions. Matrix organisational structure is the combination of functional and
divisional organisational structures, where the organisations emphasise to execute
business through executing departmental functions of each categorised divisions (Doz,
2016). As mentioned above, the organisation includes five subsidiaries or rather
divisions with which the entire hospitality business realm of Whitbread PLC sustains
within the UK. The organisational structure of Whitbread PLC and its interrelationship
with organisational operations are projected below:
Figure 1: Matrix Organisational Structure
(Source: Created by the learner)
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The divisions of the organisation includes or rather executes three major functions that
are common to each other however, there might be extravagant operations that are
different in divisional premises. Marketing is one of the major functions of the particular
organisation that is executed in order to generate insights related to target customer,
operating marketing, and positioning of respective goods and commodities of each of
the divisions of Whitbread PLC. Inventory is another organisational function that is
common in each of the mentioned divisions. The sole purpose of the particular
organisational function is to stock up raw materials, food items, and other resources
with which each of the divisions of Whitbread PLC is able to fulfil the needs and
preferences of target customer at the time of resource rarity. Human Resource is also a
vital organisational function with which the particular organisation is able to shape
workforce integrity and employee engagement within each of its five divisions
(Pakarinen and Virtanen, 2016).
The objectives of each divisions of Whitbread PLC is to serve national customers as
well as international tourists, so that they are able to incur benefits in order to support
their existence within the international markets of UK and maintain high expectancy of
productivity and profitability from the same. These divisions and their corresponding
organisational functions are vital for the achievement of their business objectives. In
order to achieve the same, the divisions as well as the corresponding departmental
functions are required to contribute collective assistances whenever required and thus,
it can be said that interrelationship between organisational function is significant for the
organisation.
It is obvious that there is a need of interrelationships between the organisational
functions of every organisation all across the globe. Marketing function of Whitbread plc
is dependent upon the departmental operations of Human resource, as the department
allows recruiting employees that have good extent of knowledge associated with
marketing and educational background of the same. The Human resource department
of each of divisions of Whitbread PLC recruits and selects candidates that have
experience in capacity management of resources and material in the inventory.
Similarly, the divisions of Whitbread PLC are interlinked with each other. At the time of
seasonal tourism within the national premises of UK, the Premier Inn offers room
services and other aspects of hospitality when the accommodation capacities of other
divisions are full. This is because, Premier Inn has the most number of accommodation
capacity in comparison to that of other divisions. This is how the particular organisation
is able to maintain its matrix organisational structure by keeping the expected
productivity of each organisational function as well as its five divisions.
Advantages Disadvantages
Matrix organisational structure allows the
particular organisation to fulfil its business
objectives through organisational functions
and its corresponding divisions.
As there are various heads of departments
at every divisions, problems such as
stakeholder conflicts, trust issues, and
power conflicts may occur.
As the human resource function is
distributed at every division, the structure
allows using those resources judiciously
It becomes difficult for the organisation to
expect high aspects of cooperation, as the
business implications are divided into
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(Grubenmann, 2017). numerous functions and divisions
(Schnetler et al., 2015).
Teams and groups are more effective at
every department of corresponding
division of the organisation.
The organisation has to invest more in
terms of financial attributes in managing
complex organisational structure.
Table 1: Advantages and Disadvantages of interrelationships between
organisational functions and division of Whitbread PLC, UK
(Source: Created by the learner)
Conclusion
Thus, it can be concluded that organisational structure, scope and business goals and
directly associated with the purpose of business establishment of organisations. In
addition to that, Whitbread PLC, being a private organisation, requires executing its
business operations in such a way that its complex matrix organisational structure does
not harm its value in market and within targeted customer groups within the UK.
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Task 2- LO3 and LO4
Introduction
The particular section is a report that shall identify and analyse the internal and external
environment of Whitbread PLC within the hospitality industry of UK. Moreover, the
macro and micro environmental factors shall be evaluated in order to predict the
positive and genitive influences of the same upon its decision-making.
P4 Identify the positive and negative impacts the macro environment has upon
business operations, supported by specific examples
M3 Apply appropriately the PESTLE model to support a detailed analysis of the
macro environment within an organisation.
Elements Analysis
Political Brexit, which is UK exiting the national
territory of European Union is among the
major political concern, is widespread
within national premises. Whitbread PLC
certainly has its operations outside the
national premises of UK and due to the
particular political factor, its trade
implications shall be violated under great
risk (Diamond et al., 2018). However,
other than Brexit, the political stability of
the organisation is quite steady. This shall
generate higher scope of business
productivity for the organisational
operations within the nation, as there shall
be no hindrances due to fewer numbers of
political conflicts and riots. Therefore, it
can be said that the organisation is
required to project and plan some vigorous
strategies with which there the business
productivity and expectations of
profitability shall be conserved in terms of
long run.
Economical There had been economical recession
recorded in the history of UK in the year
2017 and 2018 due to which there had
been a downfall in globalised aspects of
the nation (Walters, 2017). Any sort of
similar activity within the nation may
happen and the same shall decrease the
aspects for the organisation to project its
hospitality products and services to the
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national populations of UK. Moreover, UK
is among the fifth greatest economical
nation worldwide. This creates opportunity
for the organisation in expanding in
various cities and regions of UK where it
did not had its presence. Moreover, the
national government of UK is investing
more in terms of tourism, as there has
been an increase in the trends and
requirements of international tourism. This
shall positively influence the organisation,
as the government may support its
business activity and incur benefits and
higher volumes of profits that can be
shared among them. The particular
economical aspects shall also favour
Whitbread PLC in terms of competitive
advantage within the international markets
of UK.
Social The national populations are developing
their interest in terms of tour and travel.
The youth as well as the adults are
increasing their priorities for tourism within
the national premises or in terms of
international tourism (Andraz and
Rodrigues, 2016). Whitbread PLC has the
option to increase its customer segments
as well as targets, so that the particular
sociological factor within the national
premise influences their business in a
positive way possible. There has been an
increase in the types and categories of
tourists such as sole travellers, business
travellers, Cultural and heritage tourists
and others alike. Knowing the needs and
preferences of each type of tourists shall
certainly allow the organisation to increase
its expectancy of higher business
profitability within the international markets
of UK.
Technological Social media is among the leading
technology that is responsible in shaping
the customer segments within the
hospitality industry of UK (van der Zee.
and Vanneste, 2015). This shall positively
influence the market research and
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attracting immense customer groups of the
particular organisation. Mobile
technologies in terms of effective tourism
are being positively adopted by the
national population as well as international
tourists, Whitbread PLC shall incur
benefits in providing latest technologies
such as Free Wi-Fi, home automation and
others in affordable price ranges to the
customers and tourists that book services
from the particular organisation. However,
depending completely on technology and
restricting the use of human workforce
shall lead to cultural and social hindrance
in terms of communication and interaction.
Therefore, the organisation shall only be in
benefits, if it is able to use the advanced
technologies judiciously.
Environmental UK is among the highly populated nations
all across the globe due to which the
climate as well as the entire environment
is said to be endangered. The organisation
is required participating in CSR activities
alongside of national government. This
shall increase its value as well as scope
and support from the government, which
will further aid its business implications
within national parameters in a long run.
There has been scarcity of drinking water
within UK until a reservoir was built in Elan
Valley, Wales (Brett Smith, 2015).
Therefore, the organisation as well as its
corresponding trade implications shall be
threatened if the same is found to degrade
the present quality of drinking water by
eliminating wastes into rivers and lakes
from its organisational premises.
Therefore, it can be said that the
Whitbread PLC have to review its
organisational operations in such a way
that the same is not witnessed to degrade
the present and conserved quality of
environment and climate within the nation.
Legal The UK parliament has enacted to project
penalties over organisation within the
hospitality industry if the same are found to
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increase the present content of Carbon
monoxide in the atmosphere. According to
the Smoke and Carbon Monoxide Alarm,
2015, each of the tourism organisations
operating within the national boundaries
are required to equip carbon monoxide
detectors within their respective premises
(visitbritain.org, 2019). This shall allow
them to review the rate ad content of
harmful pollutants with which they shall be
able to propose strategies in sustainable
elimination of the same. Moreover,
Whitbread PLC has the legal authorisation
to review and take appropriate actions
against any violation of culture and
societal aspects of tourists that visits and
uses the accommodation services of the
same. It shall be termed as a risk for the
survival of business of the organisation, if
they are found guilty in terms of Equality
Act, 2018 (Mason, 2015).
Table 2: PESTEL analysis of Whitbread PLC, UK
(Source: Created by the learner)
P5 Conduct internal and external analysis of specific organisations in order to
identify strengths and weaknesses.
P6 Explain how strengths and weaknesses interrelate with external macro
factors.
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence
decision-making.
Strength
 Whitbread PLC is one of the largest
hotel chains in UK which has
achieved global recognition
 The company employs around
50000 highly skilled workforce
(whitbread.co.uk. 2018)
 The company has achieved a
successful track record of
integration of complementary firms
through the process of merger and
acquisition
 Net income of this company is
£415 million per annum
Weakness
 Whitbread PLC is recently trying to
move into other products segments,
which is disrupting business
operation of the company
 The pricing policy of the company is
the biggest weakness as it is
causing price range gap
 Net contribution and the profitability
ratio is below the average of the
hospitality industry
 The attrition rate in workforce of
Whitbread PLC is higher than that
of other competitive companies
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