Analysis of Shareholder Value Drivers in Corinthia Hotel Case Study

This assignment analyzes the Corinthia Hotel case study, focusing on the main drivers of shareholder value in a contemporary environment. The document explores various models for assessing shareholder value, including the Strategic Profit Model and Economic Value Added, and discusses their relevance in the current market. It emphasizes the importance of customer satisfaction and wealth maximization, particularly in the context of the Corinthia Hotel. The analysis highlights how customer-centric approaches and strategic planning contribute to long-term shareholder satisfaction and increased brand image. The assignment provides insights into how the hotel can maintain shareholder confidence through regular meetings and adapting to market changes, ultimately aiming for profit and wealth maximization.

“Practical Contribution
Section” ( Corinthia
Case )

Table of Contents
CONCLUSION................................................................................................................................1
RQ1: What are the main drivers of shareholder value in the contemporary environment, and
how can they be achieved or measured?.....................................................................................1

CONCLUSION
RQ1: What are the main drivers of shareholder value in the contemporary environment, and how
can they be achieved or measured?
Shareholders are the also known as owners of the company. They are the people who are
part of organisation and hence it is responsibility of managers to perform operations in best and
relevant manner. Shareholder can be single person or group of individuals that owns capital of an
organisation. Corinthia group has many functional organisation which has different operational
departments such as Palace Hotel, Finance PLC, caterers Limited, Danish Bakery Ltd., etc.
Hence it is clear that overall capital is divided in small groups which is known as shares.
There are some factors which are discussed in case of Corinthia Hotel which provides
information about values which may drive shareholders values. There are different methods
which are used to method value of shareholders such as customer satisfaction, total cost analysis,
profitability analysis, strategic profit model, economic value added. In order to understand these
shareholders values there are some models which provide information about values of
shareholders. They are discussed as under-
Strategic Profit Model- This model is use to analyse change in net worth of company.
Increase or decrease in new worth of Hotel shows net worth of association. Return of new worth
contains three components i.e. financial leverage, asset turnover and net profit. Financial
leverage contains information about total of asset and it is divided by total equity. Asset turnover
refers to asset which are required in specified period in respect to number of sales. Net profit is
the sum of amount which is remaining after paid off all the expenses from sales. This amount
refers to shareholders. These income are completed with the help of balance and income
statement of Hotel Corinthia.
This model is not used in current scenario because this is based on financial data. But
there is no information about shareholders wealth. So this is not relevant in current market. As
per change market values, it is easy to analyse values of consumers but at the same time, this
does not give technique to satisfy consumers.
Economic value added- This is the technique which is used by managers of Hotel in
order to analyse decision making techniques. There are two main concept on which this concept
this. They are- maximisation of shareholder's value and second is expectations of shareholders.
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In this, there is requirement of complete information about financial aspects of Hotel, so this
situation is not worth for management of association. This model is not relevant because
sometimes, financial information of company gets revealed in front of external parties and this
affects business operations in negative manner.
Above mentioned models are not used in current days because of more emphasise on
financial data. Apart from this there are some mode;s which are used in order to provide
satisfaction to consumers. They are discussed as under-
Customer satisfaction and customer value added- this is one of the best method to
analyse consumer value. Customers are the main core asset which helps to perform operations
according to demand of consumers. In case of Corinthia Hotel, this factor is essential because
this organisation keeps eyes on demand on consumers and make strategies to provide best
solution to them. Value addition model is relevant because these days, changes in demand of
consumers are taking place with rapid speed and hence it is essential for managers of Hotel to
change working style or services for attaining good consumer base.
This model is relevant these days because frequent changes are taking place in demand of
consumers, which makes improvements in working style of Hotel Corinthia. With use of this
model, more consumer satisfaction can be achieved and managers of Hotel are able to make
working style of Hotel in mostly appropriate and significant manner.
Wealth maximisation- Wealth maximisation is main aspect considered by shareholders
and management of Corinthia Hotel. Wealth maximisation refers to the increment in wealth of
shareholders which includes dividend paid to them. This also covers profit maximisation which
is core aim of Hotel Corinthia. Hence in order to achieve this aim, managers of Hotel plan such
techniques through which thy can maintain confidence of shareholders. As per case study of
Hotel Corinthia, there are some strategic such as regular meeting with delegates, employees in
order to improve working style and make changes according to external market.
This model is relevant in current market which is significant for making long term
relation with them and keep them satisfy. This helps to increase brand image in industry and
satisfaction of shareholders can be attained. With the help of this technique, it is easy to get
information about changes which are taking place in external market.
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