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Role of Strategic Management in Achieving Sustainability

Strategic management has developed from corporate planning (1960) to shareholder value maximization (1980-2000) to stakeholder value maximization (2000-2023), which also incorporates the sustainability issues of society and the environment. Until the end of the 20th century, the scope of value creation and hence competitive advantage were narrowly defined in terms of profit. Today, companies are […]

Value Creation through Incremental Change in Multibusiness Corporation

Multibusiness firms typically use multidivisional structures that comprise separate businesses, which are organized as strategic business units, divisions, or subsidiaries, and are controlled and coordinated by corporate management to create value. These businesses are arranged according to product groups, geographical locations and markets, or different vertically integrated stages. The primary characteristic of a multibusiness firm […]

Effective Performance Measures of Corporate Control

The primary purpose of strategic management is to maximize the firm’s performance in the long-run. In financial terms, this means maximizing the enterprise value of the firm by maximizing the net present value of the stream of profits (cash flows) over the long-run. Enterprise value is equal to shareholder value plus the value of the […]

Creating Brand Value through Strategic Brand Management

As the main goal of the strategy is to create value for customers and maximize firm value, the purpose of strategic brand management is to create and maximize brand value (added value), by designing, communicating, and transforming the created value and delivering value to customers consumers, and then capturing a portion out of it (in […]

Strategic Role of Economic Profit (EP)

The economic profit (EP) matric is a powerful tool to value businesses, evaluate strategies, and measure and evaluate performance. It can also be used to generate wealth for owners of small businesses and large corporations. All firms small or large have a formal or informal strategy with a quest to create value, and therefore, the […]

Importance of Shareholder Value in Improving Firm’s Performance

The firm’s ability to accurately establish and measure shareholder value (SHV) is crucial for assessing financial performance and moving the firm toward established objectives. Among other strategic objectives, such as profitability, efficiency, market share, and growth, shareholder value is the most important measure to evaluate a corporation’s long-run financial performance. The discounted cash flow (DCF) […]