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Integrated Strategy Model for Value Creation

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Due to a number of socioeconomic and technological changes, the traditional, serial Corporate Strategy process is no longer adequate in today’s business environment. The traditional process has 4 primary weaknesses:

1. Excessive Reliance on Incremental Changes
2. Sequential Planning
3. Siloed Decision Making
4. Weak connection to Value Creation

An improved model is the Integrated Strategy Model for Value Creation. This framework centers around Total Shareholder Return (TSR) goals by assessing Business Strategy, Financial Strategy, and Investor Strategy concurrently. Likewise, the 3 dimensions to this strategy model are:

1. Design business strategy.
2. Formulate financial strategy.
3. Develop investor strategy.

There is a pervasive disconnect at many companies between Corporate Strategy and Value Creation. Value Creation should be an integral part of the Corporate Strategy process. This presentation also discusses sources of strategy misalignment and how to align the organization beyond the corporate strategy.

This deck also includes templates for you to use in your own business presentations.

Got a question about the product? Email us at flevypro@flevy.com. If you cannot view the preview above this document description, go here to view the large preview instead.

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Integrated Strategy Model for Value Creation

  1. 1. This is an exclusive document to the FlevyPro community - http://flevy.com/pro Presentation created by Framework Primer Integrated Strategy Model for Value Creation Design business strategy TSR goal Develop investor strategy Formulate financial strategy
  2. 2. 2This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Contents Overview Limitations of Traditional Strategy Integrated Strategy Model Strategy Alignment Templates The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  3. 3. 3This document is an exclusive document available to FlevyPro members - http://flevy.com/pro The traditional Corporate Strategy model is no longer effective—this deck discusses the Integrated Strategy Model for Value Creation Presentation Overview Due to a number of socioeconomic and technological changes, the traditional, serial Corporate Strategy process is no longer adequate in today’s business environment. The traditional process has 4 primary weaknesses: An improved model is the Integrated Strategy Model for Value Creation. This framework centers around Total Shareholder Return (TSR) goals by assessing Business Strategy, Financial Strategy, and Investor Strategy concurrently. Likewise, the 3 dimensions to this strategy model are: This presentation also discusses sources of strategy misalignment and how to align the organization beyond the corporate strategy. It also includes templates for you to use in your own business presentations. There is a pervasive disconnect at many companies between Corporate Strategy and Value Creation—Value Creation should be an integral part of the Corporate Strategy process. 1 Excessive Reliance on Incremental Changes 3 2 Sequential Planning 4 Siloed Decision Making Weak connection to Value Creation 1 Design business strategy. 3 Develop investor strategy. 2 Formulate financial strategy. The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  4. 4. 4This document is an exclusive document available to FlevyPro members - http://flevy.com/pro It is a turbulent time in the global economy—macroeconomic, political, regulatory, and technological changes are impacting business Corporate Strategy Defined In essence, the Corporate Strategy process assists top management set up financial policies and determine investor communications to optimize business value. Rationale for traditional corporate strategy Organizations strive to develop their Business Strategy whereby they plan to establish and exploit sustainable differential advantage. Corporate Strategy, however, focuses on delineating ways to generate value in excess of what individual business units would create and to make sure the company’s portfolio sustains that superior value for its investors. Corporate Strategy identifies the advantage or financial and operational synergies that make an organization the owner of a set of businesses, in addition to defining clear-cut role of each business unit in overall organizational value-creation strategy. Corporate Strategy ensures that a company’s portfolio of businesses evolves from time to time. For instance, mature businesses that are no longer creating value in line with the firm’s objectives should be sold and replaced by new businesses that offer greater value potential. Rationale for traditional corporate strategy Organizations strive to develop their Business Strategy whereby they plan to establish and exploit sustainable differential advantage. Corporate Strategy, however, focuses on delineating ways to generate value in excess of what individual business units would create and to make sure the company’s portfolio sustains that superior value for its investors. Corporate Strategy identifies the advantage or financial and operational synergies that make an organization the owner of a set of businesses, in addition to defining clear-cut role of each business unit in overall organizational value-creation strategy. Corporate Strategy ensures that a company’s portfolio of businesses evolves from time to time. For instance, mature businesses that are no longer creating value in line with the firm’s objectives should be sold and replaced by new businesses that offer greater value potential. In principle, Corporate Strategy is defined as to how an organization utilizes its organizational skills, financial assets, and differential advantages to generate higher value for its shareholders. But practically, majority of the firms do not focus on undertaking a thorough deliberation on the process of Value Creation. The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  5. 5. 5This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Contents Overview Limitations of Traditional Strategy Integrated Strategy Model Strategy Alignment Templates The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  6. 6. 6This document is an exclusive document available to FlevyPro members - http://flevy.com/pro The Corporate Strategy function, as it is actually practiced at most organizations, rarely performs the required tasks effectively Limitations in Traditional Corporate Strategy (1 of 3) The Corporate Strategy process at most organizations typically falls prey to the following inadequacies: Excessive Reliance on Incremental Changes Sequential Planning Siloed Decision Making Weak connection to Value Creation 1 2 3 4 In practice, Corporate Strategy at most organizations fails to deliver as it is not grounded in a detailed consideration of how the company actually generates value. Source: Does Your Strategy Need Stretching?, BCG, 2008. The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  7. 7. 7This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Traditional organizations, overall, have substantially fragmented business functions working in silos Limitations in Traditional Corporate Strategy (2 of 3) Excessive Reliance on Incremental Changes An organization’s typical business model—including existing businesses portfolio and financial policies—forms as well as restricts the Corporate Strategy process. Longstanding assumptions are rarely evaluated. The typical Corporate Strategy process incorporates projecting trends in the current markets at the individual business-unit level only. The process rarely examines potential standstills in the external environment affecting the entire organization. Sequential Planning At typical Corporate Strategy function, planning and decision making tend to flow in one direction only. Once the strategies of the various business units are defined and specific financial targets are set, those options then determine the parameters of a company’s financial policies and the communications necessary to communicate and “sell” the strategy to investors. Siloed Decision Making Since decision making is sequential at traditional organizations, it ends up being highly fragmented across different operational and functional silos. Corporate Strategy function works with business unit management to set business strategies. Corporate finance, in turn, determines the financial policies, focusing on important but tangential issues as well as imperative to create shareholder value. Likewise, investor relations is solely responsible for investor communications. Hence, each business function works in complete isolation, in its own silo. So instead of an objective fact-based analysis on how to create value, the result is simply a product of negotiation and legacy thinking. 1 2 3 Excessive Reliance on Incremental Changes Sequential Planning “Siloed” Decision Making Weak connection to Value Creation The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  8. 8. 8This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Overall, there is a general disconnect between Corporate Strategy and Value Creation, with only a few organizations setting explicit objectives of achieving shareholder value for the Corporate Strategy function. The companies that do this rarely incorporate the shareholder value generation goal clearly in their planning process, and do not bother quantifying the potential Total Shareholder Return (TSR) contribution of their business plans. Hence Value Creation is not an actual driver of strategy development, but rather an anticipated outcome. Value Creation must become a more central and definite part of the Corporate Strategy process Limitations in Traditional Corporate Strategy (3 of 3) Weak Connection to Value Creation The traditional approach to Corporate Strategy works only when an organization’s environment is stable, profits are healthy, and investors are content. In changing times, this approach is far from adequate. In a BCG study of more than hundred corporate strategists from large global firms, the respondents criticized the following aspects of their Corporate Strategy function: Excellence and depth of strategic thinking in their organizations. Considered strategic analysis tools to be ineffective in dealing with the ever-changing issues. Realized the strategy process to be inept, rigid, and counterproductive in steering the organization. 4 Excessive Reliance on Incremental Changes Sequential Planning “Siloed” Decision Making Weak connection to Value Creation The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  9. 9. 9This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Contents Overview Limitations of Traditional Strategy Integrated Strategy Model Strategy Alignment Templates The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  10. 10. 10This document is an exclusive document available to FlevyPro members - http://flevy.com/pro These challenging times warrant a better approach towards Corporate Strategy with a specific focus on Value Creation Traditional Strategy Model – Areas for Improvement In reality, executive teams do not really focus on Value Creation, as their Corporate Strategy process does not take into account all the factors affecting TSR. In today’s challenging business environment, organizations need to incorporate the following features as essential ingredients of their Corporate Strategy: There is a common belief amongst most executive teams that they are already committed to improving investor returns, and some even set targets for improvement in TSR. 1 Make Value Creation an integral part of their Corporate Strategy process. 2 The scope of Corporate Strategy in the company needs to be broadened to include Business Strategy, financial guidelines, and investors’ priorities and objectives. 3 Business Strategy, Financial Strategy, and Investor Strategy have to be assessed concurrently (not serially) by the senior leadership so as to ascertain and reach consensus on key tradeoffs. The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  11. 11. 11This document is an exclusive document available to FlevyPro members - http://flevy.com/pro The integrated Corporate Strategy process presents a new, “concurrent” model that centers around TSR The integrated Corporate Strategy process is based on the thought leadership of the Boston Consulting Group. Comparison of Traditional vs. Integrated Strategy Model Let’s compare the difference between the traditional Corporate Strategy process vs. an integrated approach to Corporate Strategy that focuses on Value Creation: Source: Does Your Strategy Need Stretching?, BCG, 2008. Traditional Corporate Strategy Process Integrated Corporate Strategy Process Set business strategy Align financial strategy “Sell” to investors TSR results Design business strategy TSR goal Develop investor strategy Formulate financial strategy vs The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  12. 12. 12This document is an exclusive document available to FlevyPro members - http://flevy.com/pro In our Integrated Strategy Model for Value Creation, there are 3 core dimensions to evaluate The 3 dimensions of the integrated Value Creation model for Corporate Strategy exist in dynamic interaction. Integrated Strategy Model for Value Creation – 3 Dimensions (1 of 2) The integrated model of Value Creation, developed by Boston Consulting Group (BCG), incorporates 3 critical dimensions: Source: Does Your Strategy Need Stretching?, BCG, 2008. Integrated Strategy Model for Value Creation Design business strategy TSR goal Develop investor strategy Formulate financial strategy Improvements in fundamental value, represented by the discounted value of future cash flows of a company’s business based on its margins, asset productivity, growth, and cost of capital. 1 Direct payments to investors or debt holders in the form of dividends, share repurchases, or pay-down of debt. 3 Improvements in a company’s valuation multiple, driven by investor expectations that shape how capital markets value a company’s fundamental performance at any point in time. 2 The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  13. 13. 13This document is an exclusive document available to FlevyPro members - http://flevy.com/pro To better understand these dimensions, we need to breakdown and evaluate the drivers of TSR Integrated Strategy Model for Value Creation – 3 Dimensions (2 of 2) It is important for us to understand the linkages and manage the tradeoffs across the drivers of TSR. The diagram below depicts a breakdown of the drivers to TSR. EBITDA margin change Sales growth Share repurchases Dividend yield Debt repayment EBITDA growth EBITDA multiple change Cash flow contribution Capital gain TSR + X X f Growth in fundamental value Growth in valuation Cash returned to investors The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  14. 14. 14This document is an exclusive document available to FlevyPro members - http://flevy.com/pro The starting point for senior executives could be to begin a dialogue about the company’s TSR goals Integrated Strategy Model for Value Creation – Focus on TSR An organization may improve its fundamental value through profitable growth, but actually how it goes about achieving that growth can have either a positive or a negative impact on its valuation multiple and on its TSR. On the other hand, the level of a company’s multiple, compared to its competitors, can enable certain business strategies and make others impossible. For instance, a strong multiple can make a company’s stock lucrative for acquisition while a weak multiple can make it vulnerable to buyout. In addition, cash payouts also contribute directly to TSR and can have a positive influence on a company’s multiple by reinforcing the loyalty of existing investors and appealing new investors. To avoid any negative outcomes, our approach should be to make our financial policies and investors’ goals and priorities a fundamental part of our Corporate Strategy process. Unless we account for these linkages and allow executives to manage the tradeoffs, our Corporate Strategy process is not focused on Value Creation. In turn, our executives are not reaping full advantage of their value-creation potential, and are more likely to make decisions that destroy value, and may even find themselves vulnerable to pressure from investors. The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  15. 15. 15This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Design business strategy TSR goal Develop investor strategy Formulate financial strategy The 3 dimensions of the Integrated Strategy Model corresponds to the 3 components of an organization’s Corporate Strategy Integrated Strategy Model for Value Creation – 3 Components of Strategy (1 of 2) The 3 main components of the firm’s Corporate Strategy are: Financial Strategy is based on various decisions about aspects—such as capital structure, dividend policy, tax strategy—that often seem distinct. However a holistic approach is needed to optimize an organization’s overall Financial Strategy. Every investment option needs to be considered simultaneously against alternative utilization of capital. Unless senior management integrates financial policy deliberations with considerations of Business Strategy, managing tradeoffs is quite challenging. 2 3 Investor Strategy deals with the expectations and priorities of dominant investors of a firm. It is essential for an organization’s Corporate Strategy to be aligned with investors’ expectations that will drive the company’s valuation multiple in relation to competitors. This initiative delivers short-term TSR and has a significant impact on the company’s long-term Value Creation. Business Strategy provides benchmarks on the following: Company’s historical and expected future value-creation performance. Gaps between plans and aspirations. Any needs to consider revisiting the strategy, or to scale back goals. 1 The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  16. 16. 16This document is an exclusive document available to FlevyPro members - http://flevy.com/pro It is important to realize these 3 components are all interdependent and will affect each other Integrated Strategy Model for Value Creation – 3 Components of Strategy (2 of 2) All these components of Corporate Strategy are interdependent and affect each other: Stark difference in strategic thinking of investors and managers plays a significant role in the misalignment of Corporate Strategy. Investors expect the company to maintain current level of returns. Financial policies and key investors’ goals and priorities have implications on an organization’s business unit strategies and vice versa. The integration of Business Strategy, Financial Strategy, and Investor Strategy into a firm’s Corporate Strategy is crucial and should be treated in parallel. These strategies significantly influence the TSR. Design business strategy TSR goal Develop investor strategy Formulate financial strategyThe content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  17. 17. 17This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Contents Overview Limitations of Traditional Strategy Integrated Strategy Model Strategy Alignment Templates The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  18. 18. 18This document is an exclusive document available to FlevyPro members - http://flevy.com/pro The misalignment of Corporate Strategy is attributed mainly to differences in management’s thinking and assessment of business opportunities Misalignment of Corporate Strategy The misalignment of Corporate Strategy with other prime considerations (e.g. investor, business and Financial Strategy) is owing to difference in executives’ and investors’ assessment of business opportunities Alignment with investors’ priorities does not always mean doing whatever current investors wish—there’s the option of migrating to new investors who are aligned with the strategy. Managers typically evaluate the potential of business opportunity incrementally, i.e. earnings per share (EPS) today, positive Net Present Value (NPV), reasonably assuming future cash flows and potential risks. However, investors focus not only on EPS and NPV but also on how the initiatives fit in with their view of the overall TSR profile. Other typical sources of Corporate Strategy misalignment are: For any growth initiative that delivers returns above the firm’s cost of capital, if the returns are less than the average returns being earned by the whole organization, they will erode the average and thus disappoint the investors. This also results in a reduction in its valuation multiple. Different expectations of different investors is also a source of Corporate Strategy misalignment. − Value investors reward increasing the payout of free cash flow over growth. − Growth-at-reasonable-price (GARP) investors, however, favor stable, low risk EPS growth. − While growth investors target revenue growth in excess of 15%. The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  19. 19. 19This document is an exclusive document available to FlevyPro members - http://flevy.com/pro The purpose of an integrated approach to strategy is to accurately take into account the complex dynamics and tradeoffs shaping Value Creation Solutions to Align Corporate Strategy Depending upon the scenario, senior management need to anticipate likely results of their decisions and plan in advance accordingly. Unless a firm’s Corporate Strategy aligns with the priorities of its investors, it will not realize the value from its strategy. Educate existing investors and persuade them on the effectiveness of the current strategy in meeting their goals. In some cases, a firm may decide to “take a swing” at its near-term valuation to pursue a strategy that will pay off in future. Top executives who do not consider business, financial, and investor strategies concurrently miss out on key interfaces. When understood in this more dynamic way, Corporate Strategy clearly becomes a more complex process with many moving parts, each to some degree dependent on others. To make the Integrated Strategy Model work, a firm needs to take the following three critical steps: Start a senior executive dialogue on Value Creation strategy. Develop a comprehensive value- creation fact base. Align the organization around the right strategy. 1 2 3 The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  20. 20. 20This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Contents Overview Limitations of Traditional Strategy Integrated Strategy Model Strategy Alignment Templates The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  21. 21. 21This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Insert headline Limitations in Traditional Corporate Strategy – TEMPLATE Excessive Reliance on Incremental Changes Sequential Planning Siloed Decision Making Weak connection to Value Creation 1 2 3 4 Insert bumper. Source: Does Your Strategy Need Stretching?, BCG, 2008. • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  22. 22. 22This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Insert headline Insert bumper. Integrated Strategy Model for Value Creation – TEMPLATE Source: Does Your Strategy Need Stretching?, BCG, 2008. Design business strategy TSR goal Develop investor strategy Formulate financial strategy The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  23. 23. 23This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Insert headline Insert bumper. Integrated Strategy Model for Value Creation – TEMPLATE ALTERNATE Source: Does Your Strategy Need Stretching?, BCG, 2008. Design business strategy TSR goal Develop investor strategy Formulate financial strategy 1. Design Business Strategy • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text 3. Develop Investor Strategy • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text 2. Formulate Financial Strategy • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text • Filler text, filler text, filler text, filler text The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  24. 24. 24This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Insert headline Insert headline. Comparison of Traditional vs. Integrated Strategy Model – TEMPLATE Source: Does Your Strategy Need Stretching?, BCG, 2008. Traditional Corporate Strategy Process Integrated Corporate Strategy Process Set business strategy Align financial strategy “Sell” to investors TSR results Design business strategy TSR goal Develop investor strategy Formulate financial strategy vs The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  25. 25. 25This document is an exclusive document available to FlevyPro members - http://flevy.com/pro This presentation was created by PPT Lab. PPT Lab is a PowerPoint design firm specializing in consulting-quality presentations. View our available presentations on Flevy here: https://flevy.com/seller/PPTLab The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  26. 26. 26This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com The content on this page has been partially hidden. FlevyPro members can download the full document here: https://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840
  27. 27. 1 Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com

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More Information: http://flevy.com/browse/flevypro/integrated-strategy-model-for-value-creation-2840 Due to a number of socioeconomic and technological changes, the traditional, serial Corporate Strategy process is no longer adequate in today’s business environment. The traditional process has 4 primary weaknesses: 1. Excessive Reliance on Incremental Changes 2. Sequential Planning 3. Siloed Decision Making 4. Weak connection to Value Creation An improved model is the Integrated Strategy Model for Value Creation. This framework centers around Total Shareholder Return (TSR) goals by assessing Business Strategy, Financial Strategy, and Investor Strategy concurrently. Likewise, the 3 dimensions to this strategy model are: 1. Design business strategy. 2. Formulate financial strategy. 3. Develop investor strategy. There is a pervasive disconnect at many companies between Corporate Strategy and Value Creation. Value Creation should be an integral part of the Corporate Strategy process. This presentation also discusses sources of strategy misalignment and how to align the organization beyond the corporate strategy. This deck also includes templates for you to use in your own business presentations. Got a question about the product? Email us at flevypro@flevy.com. If you cannot view the preview above this document description, go here to view the large preview instead. Source: Integrated Strategy Model for Value Creation PowerPoint document ABOUT FLEVYPRO FlevyPro is a subscription service for on-demand business frameworks and analysis tools. FlevyPro subscribers receive access to an exclusive library of curated business documents—business framework primers, presentation templates, Lean Six Sigma tools, and more—among other exclusive benefits.

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