Assessment Task 2: IHG Performance Analysis Using PWC Framework

This report provides a comprehensive analysis of Intercontinental Hotels Group (IHG) using the "Good, Bad, and Ugly" criteria and the PWC framework. It evaluates IHG's performance by examining its organizational health, structure, and image, considering both internal and external factors. The re...Read More

Student Name
Student ID
Assessment Task 2- The Good, the Bad and the Ugly
Name of company- Inter continental hotels (IHG)
Executive Summary
The current assignment entails the” the good, the bad, and the ugly” criteria to assess
the performance of the company by analyzing its health. The entire structure is assessing to
know its image in front of its external users. This assignment utilizes PWC framework in
measuring the performance of an entity to know its future market position. The organizational
structure of the company is analyzed for this assignment, where the reporting structure of the
company is visible to ensure the strength or weaknesses of an entity. The organizational
health and the organizational structure will help in showing the transparency of an entity with
the external environment by communicating all the internal information with all the external
stakeholders.
This report focuses on analyzing the selected company that is Intercontinental hotels
located in the United Kingdom. The Sustainable development goals under the PWC
framework will apply in testifying the performance of this chosen company to compare the
performance of an entity. The internal and external factors will utilize in measuring the
performance of inter-continental hotels in accomplishing all the desired goals in a given span
of the. The application of 17 elements of PWC framework will be discussed in this
assignment.
British transnational hospitality company has considered for this assignment named as
Inter-continental group of hotels located in Denham, Buckinghamshire in the United
Kingdom. This public limited company is also listed itself with the UK stock exchange to
tests its destiny in generating fruitful results within a given period.
Annual report and the sustainability reports of intercontinental hotels utilize for
assessing all the information mention in it to measure the overall company's performance.
The investor will decide on investment in this company based on the organization health and
the organizational structure. The structure of an entity shows its transparency and the efforts
in framing its entire reporting channels.

Organization health depicts various sections which show the overall position of IHG
in front of other market rival's operating in a similar the industry as hospitality is a broad
sector which accommodates a lot of players. These candidates are making continuous efforts
in satisfying all the users to expand their existing businesses. This will comprises of goals and
missions of the company which will get achieved in three categories such as short term,
medium term and lastly, long term goals prepares by an entity in meeting all the targets.
Further elements covered under this includes corporate governance, risks, and remuneration
all the personnel working in this company as they will stay motivated by giving perks and
handsome pay.
The constituents or an element of the organizational health depicts the weakness r
strengths of the company, whether apt to survive in the competitive market or not. The health
of an entity will reflect the economic performance of the whole economy in which the
company is hosting its business. The contribution made by an object every year will show its
capabilities. Rest element which verifies the capacity of an entity consists of environmental
and segmental revenues of all the sections of the company. The Intercontinental hotel groups
create various segments such as restaurants, food, and beverage, foreign delicate, domestic
customers as a segment and collect separate revenues from all the sectors and then combine
all the segments revenues in knowing the entire performance of the company.
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PWC value Framework Elements
1. Goals and Objectives
Report Extract: 16, page no.
Critique- Page 16 shows the strategy of the company for offering high quality, which is a
basic need of every enterprise to earn higher growth in showcasing its skills in front of the
customers. The hotel emphasizes on offering a consistent quality of services to observe
sustained increase in the cash flows and profits in an extended period.

Accessibility- The information about high-quality growth and the objectives of the company
is accessible on page 16 and page 17. Page 16 will show the main focus of the company to
ensure its higher growth. Page 16 emphasizes on the following things are mention as below:
 Value creation
 Superior shareholder returns
These two categories are further categorize into winning ideal and the target portfolio, which
also helps in accomplishing all the needs and the returns within a given period.
Comprehensiveness- This will highlight the particular information mention on two of the
pages to help all the readers in access the information, and comprehensively understands the
same. A user will follow the overall performance of the intercontinental hotels to meet its
targets. Page 17 discusses explicitly the entire information related to the performance of the
company is mention below:
 Strengthening different brands of this hotel as this count as the biggest strength in
expanding this business.
 Building and leveraging scale in the key business markets of the company.
 Creating lifetime cost relationships with the supplies of an entity to lower down
the entire figure and achieve profitable goals.
 Delivering revenue to hotels through the lowest-cost and direct channels
 Driving superior returns to our third-party owners
Conclusion- This is summarized from the above report that the strategy of IHG in achieving
all its strategy, goals, and the objectives mentioned in the annual report 2016 of the company.
The sub-elements of the strategies will help in accomplishing all the objectives in giving
profitable returns in the exchange of it.
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2. Business model
Extract: Page 14 and 15
Critique- In the above mention business model of the Inter-continental group of hotel into
two segments to collect the total revenues of the hotel is IHG revenue, and another one
belongs to the system fund receipts. These two receipts are collectively showing the total
revenue of the overall company to know its position in comparison to the total position of the
industry.
Accessibility- The business model of this company is accessible in two pages such as 14 and
15 which show the segmental revenues of the business along with the proportion of the
profits and the market share reflects in the percentages form.
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Comprehensiveness- According to the comprehensive criteria, the business model will
specifically, include three categories of the investment which an entity will invest in an entity
in the form of the capital to strengthen its overall business. These will comprise strategic
investments to trigger the business growth, maintaining sustainable growth in its dividends
and lastly, generating revue surplus funds to all the shareholders.
Conclusion-Taking summary from the above that the clarity in the business model will help
in accomplishing the entire desired goal and the targets within a given period. The focus of an
entity lies on generating enough returns at the end of the period by excluding all the costs and
the expenses.
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3. Governance
Extract: 51-58 page nos.
Critique- Above mention, corporate governance structure shows the reporting structure of an
entity in achieving all the aims and the objectives accordingly as the chairman will handle the
topmost position in an entity.
Accessibility- A user will access the corporate governance cum reporting structure of this
company in total of 9 pages, which comprises of complete business reporting structure.
Comprehensiveness- Page 51 shows brief details about the duties of chairman, chief
executive officer, executive directors, and non-executive directors which collectively formed
an entire board of committee. The next pages will state the complete details about the specific
duties of all the parties include in the board of directors and the board of committee.
Conclusion- It is summarized from these elements mentioned above that the governance
structure will help an individual in knowing the specific duties of all the separate entities in
this company before making any kind of investments in this company.
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4. Risk management
Extract- 22-24 pages
Critique- The risks management system followed by an entity is a three-tier a system which
consists of risk and culture on the first tier, risk, and control management in another tire and
risks monitoring and reporting in the last tier.
Accessibility- The detailed information about the elements of the risks management system
can access by a user in three of the pages starts from 22 to 24 pages where the winning model
adopts by an entity’s risks is also mentioned there.
Comprehensiveness- The first page is 22 pages will start the details about the risks
converted in a winning model strategy, risk appetite, risk management the system, principal’s
risks in the process of IHG.The next stage will say about the risks trends and its overall
impact on the exiting and the future performance of the IHG group of hotels. And the last
page will say about the description of the risk, trends, and its impact and moreover risk
mitigation strategies to eradicate the same (Papadakis et al., 2018, 598).
Conclusion- It is articulated from the above that risks management system follows by an
entity will help in eradicating all the weaknesses lies in the company by identifying its future
impact on the company.

5. Remuneration
Extract- 66-76 page
The critique-basic idea behind the discussion of the remuneration policy of an entity is
showing all the personnel is working at the different level of the management will the reward.
This will also help in sustaining all the workers in an entity for a more extended period.
Accessibility- A user can understand the remuneration policy and all the details about the
director’s remuneration and the nom-executive directors to know the profit-generating ability
of an enterprise on these pages (Lapping &Glynos, 2018, 23-42).
Comprehensiveness- The categories of the information mention in this will comprise of
director’s remuneration report, remuneration committee and chairman’s report, remuneration
at a glance, remuneration at IHG, and annual report on director’s remuneration and lastly,
showing the director’s remuneration report.
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Conclusion- The remuneration policy of the IHG Company, that the pay outs of the business
under the APP is around 62.4% to 75% which needs to be lower down to stabilize the profit
proportion of an entity to strengthen an entity’s business.
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6. Financial Assets
Extract- 102 page no.
Comments-Assets plays an important role in an entity as this will generates revenues in
covering up all the costs in an entity.
Accessibility- The financial assets access on page no — 102, which state the detailed
information about all the financial assets held in an entity.
Comprehensiveness- Different financial assets of the companies that are available for the
convenience of a user on page 102 will include loans and receivables classified under section
financial assets (Corbet, S., Meegan,Larkin, Lucey&Yarovaya, 2018, 28-34).
Conclusion- It is summarized from this section that the financial assets will assess the
impairment will determine at the closing period. The performances of the financial assets
show the positive performance of an entity.
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7. Physical Assets
Extract- 101, page no.
Comments- Property, plant, and equipment is assessed under the physical assets as
mentioned in the annual report of the IHG Company. Land, building, and fixtures are
covered under the physical assets section.
Accessibility- Information accessible in the annual report of the Inter-continental hotels
group of the 2016 year along with this section on page 101 which helps an individual in
getting knowledge about the physical assets of the company (Miller, Kilbourne&Metelko,
2018).
Comprehensiveness- The building, fixtures, fittings, and the equipment will assess as
according to the International financial reporting standards to treat the accounts. The
evaluations occurred in the property, plant, and equipment
Conclusion- The impression of the financial assets in the annual report shows a positive
image of the company as these are increasing from one period to another.
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8. Customers
Extract- 11, Page no.
Comments- An entity uses the digital medium to offer its services to all its customers in
increasing the sales and the revenue.
Accessibility- The information is accessible on this page, which is on the initial phase of the
annual report of the company. Latest technologies are used in spreading the word about the
company.
Comprehensiveness- Brief details about the digital customers consist of daily time spent on
treating the online queries of the customers for 5.5 hours per day (Somasundaram, 2018, 112-
115).
Conclusion- It is concluded from the above that the estimated and the predicted revenue is
arising from this account to 45% of the global revenue till 2020.
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9. People and Culture
Extract From- 20-21 page nos.
Critique-This Company thinks its employees as their assets and not mere as costs to the
company as management of people creates an appropriate culture in an organization.
Accessibility-Information given in various categories in the two pages will help in
understanding the people and the cultural values.
Comprehensiveness-Right and complete information is given in this section stating the
completeness of the entire information and also in the annual report of the company (Ulrich-
Schad& Duncan, 2018,59-79).
Summary-Good performance of an entity reflects with the initiatives of an entity taken as by
the United nation's principles and develop aim to complete the same till 2030.
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10. Innovation
Extract from-21 page no.
Critique- IHG believes in introducing innovation to drive sustainable growth to increases the
sales and the revenue of an entity.
Accessibility- The information about the innovation and its wider applications in its business
can access on 21 pages no. to get detailed knowledge.
Completeness- The comprehensive information mentions on this page, which helps all the
readers in getting accurate information.
Summary- Innovation is like lifeblood for stimulating the growth of the business has proven
by IHG Company in its business operations.
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11. Brands
Extract From- 4, page no.
Critique- Different brands of Inter-continental group of hotels consists of various brands
such as Hotel Indigo, Kimpton, even hotels, Hualuxe, Crowne Plaza, Holiday Inn, Simple,
smart travel, The joy of lifetime vacations, joy of the family holiday, stay bridge and
Candlewood (Puzakova&Aggarwal, 2018, 869-888).
Accessibility- At the beginning of the annual report, the brands deals in by an entity mention
on the same with the logo of the companies along with the brief financial highlights to
support an entity.
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Comprehensiveness- Various brands an entity deals in will show the overall strength of an
entity in meeting all its goals and the objectives as in this way, it offers a wide variety of
products or services in satisfying the needs of their users.
Summary- Good performance of inter-continental hotel group is visible in this section where
an entity has several brands which consist of hotels, travel agencies, and cruises to prefer
wide variety to its customers as all these services will help in sustaining a lot of customers
with an entity.
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12. Internal business process
Extract from-20 Page no.
Critique- The internal business process of the company shows its greater emphasis on the
framework for developing the entire supply chain system.
Accessibility- The information is handy as it is visible at the beginning of the annual report
of the company.
Comprehensiveness- Meeting targets within a given period by the supply chain developed
by an enterprise (Alles, Brennan, Kogan&Vasarhelyi, 2018, pp. 219-246). Vendor code of
conduct follows by an entity on accomplishing the targets.
Summary- The performance of the company is good at meeting targets on time, which will
help in strengthening the entire business.
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13. Economic performance
Extract From-93 page
Critique- Earning per share of an entity shows the overall economic performance of the
company to know its positioning in the market.
Accessibility- Accessible on the group financial statements as the earning per share reflects
in the income statements of the entire group.
Comprehensiveness- The earning per share shows the growth of an entity that guides
investors whether to invest or divest their share from an entity (Gong, Yu, Huang Hu & Li,
2018, 915-923).
Summary-Bad Economic performance of the company is visible in the financial statements
of the company as this has decreased from period to period.
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14. Operational Performance
Extract From-11 page
Critique- These things will emphasize on showing the operational performance under which
an entity owner tries to increase the number of customers of the business to earn higher
revenue.
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Accessibility- This can be accessed on 11 pages showing meaning membership details and
the ways to increase the needs of the travelers.
Comprehensiveness- The completeness of the information will help an entity in presenting
its efforts in front of its external as well as the internal stakeholders.
Summary- Good performance is visible through the ways adopted by an entity which shows
its financial performance to track by its end users (Prajogo, Toy Bhattacharya, Oke& Cheng,
2018,95-103).
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15. Social performance
Extract From-13 page
Comments- This will talk about the social performance of an entity in showing the efforts in
sustaining a lot of customers with their business.
Accessibility- This is accessible on page 13 to get enough details about the trust building
with the customers through different brands (Quintana-García, Marchante-Lara & Benavides-
Chicón, 2018, 722-739).
Comprehensiveness- The revenue generates by an entity depends on the efforts made by an
enterprise.
Summary- Good performance of an entity is witnessed in the section of the annual report.
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16. Environmental performance
Extract from- page no. 9
Critique- The environmental performance reflects in the system uses by an entity for taking
care of the needs of all its users.
Accessibility- This is accessible on page 9 about green technology uses by an entity in
introducing the concept of sustainable development.
Comprehensiveness- The concept of a sustainable environment spread all across the work
with the help of this annual report (Song & Wang, 2018,188-203).
Summary-Good performance of an entity is visible by analyzing this section given in the
annual report.
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17. Segmental performance
Extract from- 108-112 page nos.
Critique- The segmental revenue mention in the above image shows various segments,
which are the profit-generating it's for an entity such as franchised, managed, owned and
leased, regional, central areas.
Accessibility- The handy information available in the notes to the account section of the
annual report of the company in getting detailed knowledge about the segments and their
revenues.
Comprehensiveness- The complete information given in this section to allow a user in
comparing these notes with the actual figure in the segmental revenue in the financial
statements to know the difference (Viswanadham, 2018, 983-999).
Summary- Total segmental revenue reported by this company is $707 million that
shows Good performance of an entity in meeting the uncertain costs in the future.
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Materiality
Extract From- 89-90 page nos.
Critique- The materiality shows the relevancy of all the transactions in the books of account
to consider relevant transactions by an auditor in the process of auditing(Du, McEnroe
&Mindak, 2019,pp. 25-47).
Accessibility-This information is readily available on two of the pages of the annual report to
help its readers in accessing the same.
Comprehensiveness-The materiality will act as criteria in assessing the transactions to judge
which are relevant and which are irrelevant according to this principle.
Summary-The result of this section says that out of the total materiality of the business
performance of this company, there is 75% materiality and rest 25 % are immaterial. This
shows Good performance of an entity.
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