PREMIER INN (UK) 1 Essay Example | Topics and Well Written Essays - 2250 words

PREMIER INN (UK) 1 - Essay Example Business organisations today have to face a new challenge in their environments which is discontinuous change. This is the new type of change that does not easily fit into a pattern and very often is quite abrupt. This is what Mr. Andy Grove, the former head of Intel, calls as the nightmare moment which is crisis point at which massive change occurs and a firm must adapt quickly or fall by the wayside. In other words, discontinuous change can catch many managers unaware or flat-footed because it is not based from prior experiences or the past history of an industry. This drastic change is usually disruptive as it alters existing industry structures. In this regard, this paper deals with how Premier Inn (UK) is dealing with the changes in the hotel service industry and related industries of leisure, restaurant and tourism. Premier Inn is part of the Whitbread Hotels and Restaurants Division which in turn is a part of the still bigger Whitbread (PLC) Group. Ironically, the Whitbread br and first earned its reputation in the market as a well-regarded brewer but exited this business in 2001 to refocus itself on other revenue-growth areas, namely the restaurant and hotel business. Although it retained its wines and spirits in conjunction with night clubs, the main attention these days is on the hospitality business such that Whitbread achieved a record of sorts when it won the three coveted awards given out by the British Travel Awards (Premier Inn, 2010, p. 1) such as the â€Å"Hotel Chain of the Year†, â€Å"Best Business Hotel Chain† and lastly, â€Å"Best Leisure Hotel Chain† late last year (November 2010). This paper looks at present strategies of the firm and evaluates these. Discussion To have won those three prestigious awards in a short time in its existence is truly one of the great achievements of Premier Inn and successfully challenged long-standing leaders of the hotel industry such as Holiday Inn, Hilton and Marriott. Premier Inn be longs to the budget hotel category but it has been creating its own â€Å"uncontested market space† which professors Chan Kim and Mauborgne term as blue oceans (Harvard Business Review, 2004, p. 77). This is in contrast to the usual corporate strategy based on known market spaces (or red oceans) in today's overcrowded industries with clearly defined boundaries and well-known competitive rules of the game in order to survive. The essence of the blue ocean strategy is based on a new concept of rendering the competition irrelevant by changing the rules of the game, specifically by achieving cost savings while at the same time boosting the value-for-money proposition. Within the context of this blue ocean strategy, Premier Inn is trying to duplicate what Singapore Airlines (SIA) achieved in the highly-competitive airlines industry. In particular, SIA has cost-effective operations that are even lower than most American or European budget airlines (Heracleous & Wirtz, 2010, p. 145) . Singapore Airlines has pursued two seemingly atypical and incongruous objectives deemed by most management experts as incompatible which are differentiation and cost leadership. This two-pronged or dual strategy was thought even by Prof. Michael E. Porter as eventually unsustainable in the long term because these entail contradictory investments, processes and objectives (ibid.) but SIA has proven experts otherwise. This is the same strategy being pursued now by Premier Inn. Moreover, while the company tries to achieve these twin aims, it must also contend with its avowed new corporate responsibility of pursuing environmental sustainability in the way it uses the Earth’s resources while gunning for increased market share and profitability for its stakeholders and employees. Premier Inn wants to alter the rules of competition in its