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how to write hospitality business strategy assignment premier inn

How to write Business strategy assignment is the most asked question by the Higher National Diploma Students.  Business strategy is a series of strategic measures and pursuits that a business organization adopts to gain customers, remain competitive, develop organizational performance and accomplish organization. In the hospitality sector, it is a mix of proactive management of activities to enhance the market position and overall performance of a hospitality organization (Sarsby, 2016). The report will demonstrate awareness of important concerns in a hospitality organization’s strategic planning. The Report will also examine the UK’s biggest and fastest-growing hotel company, Premier Inn, to analyze the impact and influence of the macro and micro-environment on a hotel organization and its comprehensive strategies for development.  

Stakeholders analysis of the organization.  

A stakeholder is a party with an interest in a corporation that may either influence the operations and performance of a company or be impacted by it. Shareholders, employees, consumers, distributors, society, government or corporate groups are typical stakeholders. Stakeholders of an entity can be both internal and external. Internal stakeholders are essential to an organization since the operations are based on their capacity to work towards the objectives of the company. On the other hand, external stakeholders might indirectly impact the company (Blokdyk, 2018).   A stakeholder analysis is a technique to identify the key stakeholders before the project starts. It enables the organization to obtain the assistance of key stakeholders of the organisation. It helps the company to synchronize its objectives and strategies early among all stakeholders and assist resolve disagreements or challenges at an early stage. 

Therefore, the stakeholder analysis of Premier Inn; 

Step 1: Business stakeholder identification. 

The first stage entails brainstorming with team members to list all potential project or company stakeholders. All prospective key stakeholders are involved in the principal list. 

Step 2: Stakeholder grouping and prioritizing. 

Following a successful brainstorming session, it will assist to analyse the role of the company in relation to them in terms of their impact, interest and involvement levels. 

  • High power, high interest.  These groups of stakeholders are the most essential to an organization. They should be prioritized, and closely managed by ensuring that organizational development remains satisfactory. 
  • This group includes stakeholders, bankers and Premier Inn’s employee union. 
  • Low interest, high power. These groups of stakeholders must be kept satisfied because of their power over the firm. 
  • High interest, low power. An organization must guarantee that all organizational activities and changes are kept aware of this set of stakeholders.  This category requires continuous monitoring to ensure that they do not have organisation-related difficulties. For Premier Inn, this category of stakeholders includes workers, suppliers, pressure groups, and supporting communities. 
  • Low power, low interest. Minimal attention is required of this category of stakeholders. They only have to be kept periodically notified (Dey, 2016). This category applies to Premier Inn’s guests and environmental groups. 

Step 3: Establish the communication medium for each stakeholder 

It is necessary to think strategically about how best to win continued aid from each of these stakeholder groups, after classifying stakeholders. Finding out what motivates each stakeholder, their values, and finding a means to address all may help stakeholders to have a favourable image of the organization (Tesone, 2009). 

Similarly, the company must prepare for the next stage of the stakeholder management process, i.e. the development of the stakeholder communication strategy, by creating all stakeholder profiles. 

PESTLE analysis of Premier Inn. 

SWOT analysis of Premier Inn. 

Evaluation of the competitive forces using Porter’s Five Forces model.  

The five forces analysis of Porter is a competitive analysis that provides insights into an industry’s connections and behaviours. Therefore, we may utilize the Porter framework and use it for the hotel sector. 

The threat of the entry of new competitors 

Because of the scale of big firms in the market, any small autonomous enterprise will face substantial entrance obstacles. It would be nearly hard to survive if any new hospitality firm tries to compete with a corporation like Starwood or Premier Inn without considerable quantities of financial resources. The hotel chains have huge marketing, branding and supply chain advantages that minimize expenses for major corporations. The danger to these enterprises is therefore relatively minimal from new entrants (Tesone, 2009). 

The threat of substitutes 

The price inelasticity of hotels is particularly high for business customers.  However, 65% of individuals see price as the principal factor in their choice according to a report by Mintel 2010.  Location is the second place on the list and 43% indicate a higher price is a greater factor for customers than a room itself. Any hotel company should aim to maintain customers via loyalty programmes and membership plans. More affordable alternatives like Airbnb, temporary lodging services, Couchsurfing and many more are being introduced with the development of technology. In the travel and leisure industries, a new company frequently has greater possibilities to start out. 

The bargaining power of customers 

The power of the customer is relatively minimal because there is no huge single purchaser. This is consistent with the reality that most hotel clients are people who stay for business or leisure purposes. With increasing technology, people can access more information and evaluate hotels much easier than they could in the past on the basis of pricing and location. There is a demographic transition in the labour marketing sector, which might negatively affect employment provision in the hotel industry (Tesone, 2009).  

The bargaining power of suppliers 

When negotiating supply, large hotel corporations have considerable leverage. The cost of a changing supplier’s hotel chain is generally cheap; providers must compete hard in order to secure contracts for large chains. This leaves virtually no room for negotiations and favours the hotel chains greatly. This is another example of the large companies’ economies of scale. 

Competitive rivalry within the industry 

Hotel chains attempt to compete on a location, which may be quite lucrative for growing markets. For example, Premier Inn aims to expand particularly in new exotic places but is starting to compete with local enterprises, notably in the Middle East. Hotel giants seek to compete in terms of prices and even more at price levels; restaurants quality, membership perks, luxury and locations are advertised above price levels (Slorach and Ellis, 2017). 

Hotel giants can negotiate with consumers and suppliers with tremendous authority. Although customers acquire a bit of leverage, they cannot bargain directly over hotel costs. In addition, the difficulties of joining the market will continue to thrive in the major firms of the hospitality industry. 

Evaluating the different types of strategic directions available using Porter’s Generic Strategies.   

A company’s competing attitudes and behaviours are regarded as an important subject for all sectors in a highly competitive and chaotic market. An organizational strategy to gain a competitive advantage is expressed in the series of activities performed by a company. 

An excellent company plan includes the strategy. A firm identifies its speciality and learns about its consumers through an effective competitive strategy. Porter categorizes three fundamental business strategies – differentiation, cost leadership and focus – and a firm is the finest when it concentrates on anyone. Porter’s generic strategies are a generally acknowledged theory of strategic choices (Sarsby, 2016). 

Cost Leadership 

Porter argues that only one company can be the cost leader in a particular sector. A cost management plan involves the aggressive effort to reduce costs, to reduce costs, to control overall and to minimize costs. It focuses on improving competitive performance through efficiency instead of product and service quality. Some of the cost-smart steps a company could choose to take are: 

  • Enhance the productivity of company operations such as technological advances, various plant layouts etc. 
  • Minimize the volume of permanent employees, outsource sections of business or project employees 
  • Operating scale economies 
  • Training personnel to increase their effectiveness 

Companies don’t have to sacrifice income to lead costs. Reduced pricing leads to increased demand and, consequently, a greater market share. This approach might, however, also be seen as a two-edged sword. It might cause income loss if it is decreased too much (Marson and Ferris, 2020). 


The general approach of Porter is to produce a single product or service that separates its offers from its rivals. This technique allows companies to attract customers to take part in the market. It allows companies, in order to emphasize distinctions with their competitors, to take a distinct strategy (Marson and Ferris, 2020). There are two basic approaches to establish a strategy of differentiation: R&D and Marketing. Premier Inn, as an experienced brand, uses distinguishing features to reduce the pressure of rival brands. In clients’ perceptions, the distinctive and eccentric branding has produced a strong brand image. 


Focus is centred on an industry’s limited competitive scope. Focus is intended at increasing market share by operating on narrow or non-attractive areas to larger rivals. The firm may position itself to improve brand commitment and customer overall job satisfaction by focusing on narrowly determining target audiences.  

An organization can also adopt a combination strategy by combining one of the general low-cost methods or the focused approach. While small businesses can adopt a focus strategy from the very beginning, midsize and large businesses only employ focused strategies in conjunction with generic strategies for differentiation or cost leadership (Legrand, Sloan and Chen, 2016). Focus policies are nonetheless more persuasive if the company identifies and promotes different preferences of customers and if other competing companies have not reached or exploited this special niche market (Jenkins and Moe, 2008).  

In terms of Premier Inn, the hospitality business incorporates a blend of general low-cost methods or the focused approach, which has led the hotel business to become the leading hospitality business in the UK.  

Using Ansoff’s Growth Matrix to recommend the most appropriate growth platform and strategies. 

With strategic growth choices and actions, the Ansoff matrix has helped Premier Inn succeed in its worldwide operations and operations. 

Market penetration (Primary Strategy) 

Companies who want their present products to expand in markets where their brands are already in existence and operating use the strategy to market penetration.  Premier Inn should cut prices and use a range of Marketing and Promotional tactics to enhance sales in the present market in order to accomplish this goal. The company has already offered a variety of price rebates and promotions, often promotions and offers fresh and interesting products. Although Premier Inn is one of the UK’s top hospitality firms, market penetration is not the major strategy for intensive development, as indifferent consumer markets, the company still has an opportunity for growth. 

Product Development (Secondary Strategy) 

The secondary strategy employed by Premier Inn is product development in order to fulfil its strategic objectives. New products are developed to expand or change the existing products to make new products available to the current customer base. The company can supply new products that interact with the purchase behaviour of existing consumers. It allows the company to tolerate risk as one product line’s losses are offset by another’s gains (Howard, 2015). 

Market Development (Supporting Strategy) 

The Premier Inn utilizes market development as a growth strategy that supports market penetration and product development. Efficient access to new consumer markets has played an important part in the creation of Premier Inn as the leading brand. Affordable prices, powerful trademarks and varieties are essential reasons behind the leading business structure. Premier Inn has also attracted new users with outstanding marketing and celebrity promotion, in addition to these factors. 

Diversification (Supporting Strategy) 

As Premier Inn primarily encourages growth through accessing the market and producing products, its diversity strategy is of secondary importance. A broad growth plan for cost leadership and reduction skills and developed structures supports the diversity of the company’s portfolio. Premier Inn’s diversification covers new products in new fields without previous expertise.  

The Market Development Approach is analysed as the best growth platform and strategy for Premier Inn. The plan offers a supporting strategy for the brand that includes the greatest market penetration and criteria for product development (Enz, 2009). 

Theories of strategic planning. 

Strategic planning helps to establish a company’s vision and purpose over the long term and to align resources with environmental changes and especially its markets, consumers and prospects to fulfil the expectations of stakeholders. 

External analysis 

The PESTEL framework 

The PESTEL Framework provides a critical understanding of the external situation and strategic choice. Premier Inn had minimal economic constraints that lowered disposable income considerably and resulted in small corporate income. In the sales, purchasing, marketing, management and operation, as stated in PESTEL Analysis, Premier Inn needs to utilize technology. In order to achieve its goals effectively and productively, Premier Inn must become more efficient (Dey, 2016). 

Porter’s five forces 

The hospitality industry is ideally situated with greater entry fees, financial and managerial capacity, and increased infrastructure development. A significant reason for its success is its strategic position in the market and other competitive qualities (Cram101 Textbook Reviews, 2010). 

Internal environment analysis 

SWOT analysis 

Première inn in developing and rising nations is among the greatest cheap hotel brands. The single market’s emphasis on top passengers reduces the company’s competitiveness. However, the firm can use its financial expertise to take advantage of new innovations in the developing markets, given its dimension and brand location. 

The Ansoff Matrix 

Enhanced customer service capability via the company’s current growth plan for new markets such as expansion into Germany and Ireland. Furthermore, its ability to develop its footprint in several markets is strengthened. However, increased competition in new sectors is declining (Brotherton, 2021).  In order to meet the challenges of the hotel chains, Premier inn has to increase brand performance. The firm should strive for high returns by enhancing operational efficiency and revenue


In the changing business climate today, the focus is on providing client value at the least expensive feasible. The present recession due to pandemics has affected companies worldwide, especially the hotel industry. Hotel businesses need to focus on offering client’s value at the least cost feasible. Hotel firms can save expenses by applying the proper management and operational techniques (Blokdyk, 2018). Hotels may also enhance quality and service in addition to decreasing labour expenses. An excellent business strategy plan helps to analyse the success by providing a comprehensive foundation for organizational mission, vision, objectives and various tools and technologies determined in the process. 


Blokdyk, G., 2018. Porter’s five forces analysis: A Complete Guide. Createspace Independent Publishing Platform. 

Brotherton, B., 2021. Introduction to the UK Hospitality Industry: A Comparative Approach. London, United Kingdom: Taylor & Francis Ltd. 

Cram101 Textbook Reviews, 2010. Studyguide for Hospitality Strategic Management. Sim Valley, CA, United States: CRAM101. 

Dey, K., 2016. The fast food industry in the UK. Analysis of McDonalds with PESTEL, VRIN and Porter’s Five Forces. GRIN Verlag. 

Enz, C., 2009. Hospitality Strategic Management : Concepts and Cases. 2nd ed. New York, United States: John Wiley & Sons Inc. 

Howard, P., 2015. Business and Company Law : Legal English Dictionary and Exercise Book. Createspace Independent Publishing Platform. 

Jenkins, C. and Moe, H., 2008. English Law for Business Students. London: New Generation Publishing. 

Legrand, W., Sloan, P. and Chen, J., 2016. Sustainability in the Hospitality Industry : Principles of sustainable operations. 3rd ed. London, United Kingdom: Taylor & Francis Ltd. 

Marson, J. and Ferris, K., 2020. Business Law. 6th ed. Oxford, United Kingdom: Oxford University Press. 

Sarsby, A., 2016. Swot Analysis : A Guide to Swot for Business Studies Students. United Kingdom: Spectaris Ltd. 

Slorach, J. and Ellis, J., 2017. Business Law 2017-2018. 25th ed. Oxford, United Kingdom: Oxford University Press. 

Tesone, D., 2009. Principles of Management for the Hospitality Industry. Oxford, United Kingdom: Taylor & Francis Ltd. 

Villegas, R., 2017. SWOT Analysis Supercharged. Createspace Independent Publishing Platform. 

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