Business Management - Whitbread Group PLC Assignment

Introduction Of Business Management - Whitbread Group PLC Assignment

Whitbread Group PLC is a UK-based multinational company that operates in the hospitality industry. The company's portfolio includes the Premier Inn hotel brand, which is the largest hotel brand in the UK, and the restaurant brand Beefeater, among others. Whitbread's history dates back to 1742 when Samuel Whitbread founded a brewery in London, which later became the Whitbread Group. This report aims to critically evaluate Whitbread's current corporate strategy, financial performance, and corporate social responsibility (CSR) initiatives. The report will draw on various sources, including the company's annual report, financial statements, and external sources such as the Financial Times. The report will provide insights into the company's strengths and weaknesses and identify opportunities and challenges that the company faces. Ultimately, the report aims to provide recommendations on how the company can improve its performance and sustain its long-term growth and success.

New Assignment Help is your one-stop destination for impeccable academic support. Our assignment writing services in the UK caters to diverse subjects and topics, guaranteeing thorough assistance for every student. Explore our Free Sample to kick-start your assignments with confidence.

Part 1

Whitbread Group PLC is a UK-based multinational hospitality company that operates in two main segments: Premier Inn hotels and Costa Coffee. The company's current corporate strategy is centred around the divestment of Costa Coffee and the expansion of Premier Inn hotels globally. This report critically evaluates the company's current corporate strategy by analysing its financial performance, business model, and history.

Financial Performance

Whitbread's financial performance has been strong in recent years, with revenue of £2.20 billion and a profit before tax of £280.00 million in 2020/21, despite the impact of the COVID-19 pandemic on the hospitality industry(Financial Times, 2018). However, the company's revenue and profit margins have been declining in the past few years, particularly in the Costa Coffee segment. The decision to divest Costa Coffee is seen as a strategic move to focus on the growth potential of the Premier Inn hotel business.

Business Model

Whitbread's business model is based on a hub-and-spoke model, where Premier Inn hotels act as hubs, and the Costa Coffee outlets act as spokes. This model allows the company to leverage its brand and operational efficiency across both segments, resulting in cost savings and improved profitability. However, the divestment of Costa Coffee raises questions about the viability of this business model and the impact it may have on the company's overall profitability.

Corporate Strategy

Whitbread's current corporate strategy is centred around the divestment of Costa Coffee and the expansion of Premier Inn hotels globally. The company aims to become the leading hotel operator in the UK and expand its global footprint in key markets such as Germany and the Middle East. This strategy aligns with the company's core competencies and strengths, which lie in the hospitality industry. However, it remains to be seen whether the company can successfully execute this strategy and overcome the challenges posed by the COVID-19 pandemic.

History

Whitbread has a rich history dating back to 1742 when Samuel Whitbread founded the brewery that eventually became the Whitbread Group. The company has undergone several transformations over the years, from a brewery to a leisure and hospitality company. In recent years, the company has focused on streamlining its operations and divesting non-core businesses to improve profitability. The decision to divest Costa Coffee is the latest in a series of strategic moves aimed at strengthening the company's core business and driving growth.

Corporate Social Responsibility

Whitbread's corporate social responsibility (CSR) strategy is based on the belief that sustainable business practices are essential for long-term success. The company's CSR initiatives focus on three main areas: community, environment, and people. These initiatives include donating surplus food to local charities, reducing waste and carbon emissions, and promoting employee well-being and development. The company's CSR strategy aligns with its vision of becoming a leading hospitality company that operates sustainably and responsibly. However, the company faces several challenges in implementing its CSR initiatives, including balancing social and financial objectives, complying with regulatory requirements, and managing stakeholder expectations. To address these challenges, Whitbread has developed a comprehensive CSR framework that includes clear targets, policies, and reporting mechanisms. One of the key CSR initiatives of Whitbread is its commitment to reducing waste and carbon emissions. The company has set a target of reducing its carbon footprint by 50% by 2025 and achieving net-zero emissions by 2040(Whitbread, 2022c). To achieve these targets, the company has implemented several measures, including switching to renewable energy sources, improving building insulation, and reducing food waste. These initiatives not only help the company to reduce its environmental impact but also improve its operational efficiency and reduce costs.Another CSR initiative of Whitbread is its focus on employee well-being and development. The company recognizes that its success is dependent on the dedication and performance of its employees. To support their well-being and development, the company provides a range of benefits and programs, including health and safety training, employee assistance programs, and career development opportunities. These initiatives help to improve employee engagement, retention, and productivity. Whitbread's CSR initiatives have been recognized by several external organisations, including the Dow Jones Sustainability Index and the Carbon Trust. These accolades demonstrate the company's commitment to sustainable business practices and its ability to balance social and financial objectives.

Figure 1:-Strategies and Target Of Whitbread Group PLC

(Source :- Whitbread, 2022c)

Financial Analysis

Notwithstanding the COVID-19 pandemic's effects on the hotel sector, Whitbread's financial performance has been solid in recent years. The company reported revenue of £2.2 billion and a profit before tax of £280 million in 2020/21 (Whitbread, 2021). However, the company's revenue and profit margins have been declining in the past few years, particularly in the Costa Coffee segment. The decision to divest Costa Coffee is seen as a strategic move to focus on the growth potential of the Premier Inn hotel business. The company's financial performance has also been impacted by the COVID-19 pandemic, which has resulted in lower occupancy rates and reduced demand for hospitality services. To mitigate these impacts, the company has implemented several cost-cutting measures, including reducing staff numbers, renegotiating rents, and suspending dividend payments. These measures have helped the company to weather the pandemic and maintain its financial position. Whitbread's financial performance is also affected by external factors such as changes in consumer behaviour and economic conditions. The company's decision to focus on the hotel business is based on the belief that the growth potential of this sector is higher than that of the coffee business. However, the hotel industry is also subject to external factors such as economic cycles, geopolitical risks, and regulatory changes. To manage these risks, the company will need to adopt a proactive approach and continually monitor market conditions and trends.

Figure 2:- Whitbread Total Revenue 2022

(Source :- Whitbread, 2021)

In summary , Whitbread's corporate strategy is based on a clear and focused vision of becoming the leading hotel operator in the UK and expanding its global footprint. The company's strengths, such as its established brand reputation and operational efficiency, have been leveraged to support this vision. The divestment of Costa Coffee is seen as a strategic move to focus on the growth potential of the Premier Inn hotel business, although it may present challenges for the company's hub-and-spoke business model. Despite the COVID-19 pandemic's effects on the hotel sector, Whitbread's financial performance has been solid in recent years. To lessen the pandemic's impact and preserve its financial position, the corporation has put in place a number of cost-cutting initiatives. Overall, Whitbread's corporate strategy is sound, and the company has a clear plan for growth and sustainability. However, the company will need to remain flexible and adaptive in the face of external challenges to ensure its long-term success.

Part 2

Based on the analysis conducted in Part 1, there are several potential strategic choices available to Whitbread Group PLC. Two clear strategic recommendations for the company are:

Focus on core brands and divest non-core assets:

One of the main findings from the investigation is that Costa Coffee and Premier Inn, two of Whitebread's major brands, are doing well and have a lot of room to develop. As a result, the business should concentrate on these brands and sell non-core businesses like Beefeater and Brewers Fayre, which are struggling and have little room for expansion. Whitebread may concentrate its efforts on its core brands and invest in their expansion by selling these businesses, which is anticipated to result in long-term profitability.

Expand internationally:

The fact that Whitebread has a limited international presence and derives the majority of its revenue from the UK is another significant finding. The business should increase its global presence to spur growth and lessen its reliance on the UK market. With a presence in more than 30 countries, Costa Coffee has already made some strides in this direction, but there is still a lot of space for growth. On the other hand, Premier Inn has a little global footprint, with only a few properties outside of the UK. Whitebread may lessen its vulnerability to the UK market, which is anticipated to suffer difficulties in the aftermath of Brexit and the COVID-19 outbreak, by growing globally and tapping into new markets.

To implement these strategic recommendations, Whitebread needs to take several steps:

• Conduct a strategic review: To identify which assets are core and which are not, the organisation must perform a thorough strategic evaluation. Moreover, this analysis should pinpoint possible target markets and foreign expansion prospects.
• Divest non-core assets: Whitebread should sell non-core businesses that are operating poorly and have little room for expansion after the strategic analysis is over. The money raised from these sales may be invested in the development of key brands and utilised to finance global expansion.
• Invest in core brands: The expansion of Whitebread's main brands, especially Costa Coffee and Premier Inn, requires investment. These companies should be given more exposure, their customer experiences should be improved, and their digital skills should be strengthened.
• Expand internationally: Premier Inn, which has a small worldwide footprint, should receive priority in Whitebeard's international expansion strategy. The business should decide which areas to target, plan its entry into those markets, and spend money on local operations and marketing.
• Monitor and adjust: As with any strategic plan, Whitebread needs to monitor its progress and adjust its strategy as needed. The company should regularly review its performance against its strategic goals and adjust its strategy as necessary to ensure it is on track to achieve its long-term objectives.

In summary, Whitbread Group PLC should concentrate on its two main brands, Costa Coffee and Premier Inn, and sell up non-core businesses. The corporation should also increase its global footprint in order to spur development and lessen reliance on the UK market. Whitebread must perform a strategic assessment, sell non-core assets, invest in key brands, go global, and continuously analyse and tweak its approach in order to follow these strategic suggestions. These actions will put Whitebread in a position to succeed and be profitable over the long run.

Part 3

Whitbread Group PLC is a British multinational hospitality company, which operates a number of well-known brands, including Premier Inn, Costa Coffee, and Beefeater. In this analysis, The Premier Inn brand, which is the largest hotel brand in the UK, and the current business strategy it has adopted in the hospitality industry. Then, two strategic recommendations that can ensure business success for Premier Inn in the future, while considering consistency between corporate and business levels of Whitbread Group PLC

Current Business Strategy of Premier Inn

Premier Inn’s current business strategy is to maintain its position as the leading hotel brand in the UK by providing high-quality, affordable accommodation, and exceptional customer service(Deloitte ,2018). To achieve this, the company has implemented a number of key initiatives:

• Focus on Customer Satisfaction: Premier Inn places a high priority on customer satisfaction and invests heavily in customer service. The company regularly conducts customer surveys and uses the feedback to improve its services and facilities.
• Expansion: Premier Inn is expanding its portfolio of hotels both domestically and internationally. The company has plans to open new hotels in Germany, the UAE, and India, among other countries.
• Digital Transformation: Premier Inn is investing heavily in digital technology to enhance the customer experience. The company has introduced a number of digital initiatives, including online check-in, mobile apps, and a loyalty program.
• Sustainability: Premier Inn has a strong commitment to sustainability and has implemented a number of initiatives to reduce its environmental impact. The company has set a target to reduce carbon emissions by 50.00% by 2025.

Strategic Recommendations for Premier Inn

To ensure business success for Premier Inn in the future, the company should consider the following strategic recommendations:

• Develop a Stronger Brand Identity: Premier Inn should focus on developing a greater sense of brand identity to set itself apart from rivals. The firm should create a unique brand message that resonates with customers and reflects its commitment to customer satisfaction, affordability, and sustainability(Statista ,2017). Premier Inn can achieve this by investing in marketing and advertising campaigns that showcase its unique value proposition.
• Diversify its Offering: Premier Inn should consider diversifying its offering to attract a wider customer base. The company should explore new revenue streams such as food and beverage services, conference facilities, and leisure activities. This allows Premier Inn to increase its revenue per guest and improve its profitability.

Consistency between Corporate and Business Levels of Whitbread Group PLC

To ensure consistency between corporate and business levels of Whitbread Group PLC, the strategic recommendations for Premier Inn should align with the overall corporate strategy of the company. The corporate strategy of Whitbread Group PLC is to grow its core brands and expand into new markets, while maintaining its focus on sustainability and customer satisfaction.

The recommendation to develop a stronger brand identity for Premier Inn aligns with the corporate strategy of growing core brands. By creating a unique brand message, Premier Inn can differentiate itself from its competitors and attract more customers, which would ultimately contribute to the growth of the company.The recommendation to diversify Premier Inn’s offering aligns with the corporate strategy of expanding into new markets. By exploring new revenue streams, Premier Inn can attract new customer segments and expand its business beyond traditional hotel services. This allows the company to tap into new markets and increase its revenue streams.The current business strategy of Premier Inn is focused on customer satisfaction, expansion, digital transformation, and sustainability. To ensure business success in the future, Premier Inn develops a strong brand identity and diversifies its offering. These strategic recommendations align with the overall corporate strategy of Whitbread Group PLC, which is focused on growing its core brands and expanding into new markets while maintaining its commitment to sustainability and customer satisfaction. By implementing these recommendations, Premier Inn can maintain its position as the leading hotel.

Part 4

The experience of working on Blocks 3 and 4 has been tremendously rewarding and has improved my abilities in many ways. As a student, my skills are always improving, and these blocks have helped me hone both new and old ones. I now have a better grasp of the value of context and relevance in communication thanks to Blocks 3 and 4. I have learnt how to adjust my response to the particular requirements and expectations of the audience through the numerous activities and assignments. I have also improved my capacity to identify crucial information and react appropriately. Secondly, working on Blocks 3 and 4 has improved my ability to conduct research and think critically. I had to do a lot of research, analyse material, and synthesise it into responses that were logical and instructive due to the wide range of topics addressed in these blocks. My ability to find reliable sources, assess their applicability, and arrange and present the data has increased as a result of this procedure. Moreover, these blocks have improved my writing, especially in terms of grammar, style, and tone. I've learnt how to write in an organised, succinct, and interesting way while yet retaining a professional tone through the numerous writing projects. Finally, working on Blocks 3 and 4 has enhanced my ability to adapt to different writing styles and formats. Whether it is writing an informative essay, a persuasive argument, or a formal report, I have learned to adapt my writing style to meet the requirements of the task and the audience. Overall, working on Blocks 3 and 4 has been a valuable experience that has enabled me to enhance my skills in various areas. As a student, my abilities are continually improving, and I look forward to further opportunities to develop my skills in the future.

References :-

Financial Times (2018) 'Whitbread/Coca-Cola: best of Britain', Financial Times, 31 August 2018. Available as: https://www-ft-com.libezproxy.open.ac.uk/content/a9f796a6-ad25-11e8-89a1-e5de165fa619 (Accessed: 24 March 2022)

Whitbread (2021) Whitbread PLC: Annual report and accounts 2020/2021. Available at:

https://cdn.whitbread.co.uk/media/2021/05/05141427/23076_Whitbread_AR2020_web.pdf (Accessed: 6 April 2022)

Whitbread (2022c) Our business model and strategy. Available at: https://www.whitbread.co.uk/about-us/our-business-model/ (Accessed: 6 April 2022)

Whitbread (2022d) History of Whitbread.Available at: https://www.whitbread.co.uk/about-us/our-history/(Accessed: 22 March 2022)

Deloitte (2018) Next-gen hotel guests have checked in: The changing guest experience Available at:

https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-cb-hotel-guest-experience-

strategy.pdf (Accessed: 18 March 2022)

Statista (2017) Statista Survey Hotel & Accommodation Bookings 2017 Available at: https://www-statista-

com. libezproxy.open.ac.uk/statistics/297920/most-important-accommodation-amenities-for-travelers-worldwide/

(Accessed: 8 April 2022)

Whitbread (20229) Reast easy: from booking to bed Available at: https://www-statista-com.libezproxy.open.ac.uk/

statistics/297920/most-important-accommodation-amenities-for-travelers-worldwide/ (Accessed: 30 March 2022)

Whitbread (2022n) Our rooms Available at: https://www.premierinn.com/gb/en/sleep/our-rooms.html (Accessed: 2

April 2022)

Whitbread (20220) The Premier Plus rooms Available at: https://www.premierinn.com/gb/en/sleep/premier-

plus.html (Accessed: 2 April 2022)

Whitbread (2022p) Hub Hotels: Smaller rooms, big locations Available at: https://www.premierinn.com/gb/en/

hub.html (Accessed: 30 March 2022)

Whitbread (2022q) ZIP Hotels: Get Ready to ZIP Available at: https://www.premierinn.com/gb/en/zip.html

(Accessed: 30 March 2022)

Deloitte (2018) Next-gen hotel guests have checked in: The changing guest experience Available at:

https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consumer-business/us-cb-hotel-guest-experience-

strategy.pdf (Accessed: 18 March 2022)

Statista (2017) Statista Survey Hotel & Accommodation Bookings 2017 Available at: https://www-statista-

com. libezproxy.open.ac.uk/statistics/297920/most-important-accommodation-amenities-for-travelers-worldwide/

(Accessed: 8 April 2022)

Whitbread (20229) Reast easy: from booking to bed Available at: https://www-statista-com.libezproxy.open.ac.uk/

statistics/297920/most-important-accommodation-amenities-for-travelers-worldwide/ (Accessed: 30 March 2022)

Whitbread (2022n) Our rooms Available at: https://www.premierinn.com/gb/en/sleep/our-rooms.html (Accessed: 2

April 2022)

Whitbread (20220) The Premier Plus rooms Available at: https://www.premierinn.com/gb/en/sleep/premier-

plus.html (Accessed: 2 April 2022)

Whitbread (2022p) Hub Hotels: Smaller rooms, big locations Available at: https://www.premierinn.com/gb/en/

hub.html (Accessed: 30 March 2022)

Whitbread (2022q) ZIP Hotels: Get Ready to ZIP Available at: https://www.premierinn.com/gb/en/zip.html

(Accessed: 30 March 2022)

Whitbread (2022r) A good night's sleep guaranteed Available at: https://www.premierinn.com/gb/en/zip.html

(Accessed: 1 April 2022)

Whitbread (2022s) A great day starts with a good night's sleep Available at:

https://www.premierinn.com/gb/en/sleep.html (Accessed: 1 April 2022)

Whitbread (2022t) Premier Inn takes counting sheep digital with launch of ‘ewe-nique’ video streaming platform

‘Ewe Tube’ to help Brits rest easy before their summer holidayAvailable at: https://www.whitbread.co.uk/premier-

inn-takes-counting-sheep-digital-with-launch-of-ewe-nique-video-streaming-platform-ewe-tube-to-help-brits-rest-

easy-before-their-summer-holiday/(Accessed: 1 April 2022)

Whitbread (2022u) Premier Inn mattresses, beds, pillows and beddingAvailable at: https://www.premierinn.com/

gb/en/sleep/buy-our-bed.html Accessed: 1 April 2022)