Translating Strategy into Shareholder Value

Translating Strategy into Shareholder Value Value Creation

Raymond J. Trotta

Trotta Translating Strategy into Shareholder Value: A Company-Wide Approach to Value Creation

Raymond J. Trotta is a management consultant and academic. He is a cofounder of iValue, a consulting firm focused on the valuation of information technology. James P. Hudick is Managing Director of Professional Development at the Institute of Management.

Translating Strategy into Shareholder Value is a look at how the planning process relates to the achievement of shareholder value, and offers ways to ensure that the two directly complement each other.

Using tools and a special case study to analyze past, present, and future performance, Translating Strategy into Shareholder Value takes readers through a host of steps, including:

- Comparing existing strategy to the competition and the economy as a whole

- Analyzing productive capabilities and costs

- Bringing non financial metrics to test how future strategy creates value

- Selecting the right analytical tool and looking at strategic solutions

Translating Strategy into Shareholder Value is a well written and an effective guide to evaluating the multitude of strategic alternatives available to an organization within the strategic planning process.

With the maximization of shareholder value as the end goal, author Trotta introduces the original concept of Step-Wise Approach to Value (SWAV) to help companies achieve that goal. SWAV involves the application of four filters:

- economic

- strategic

- operational, and

- valuation

through which strategic alternatives can be analyzed.

Also a number of specific analytical tools such as the Porter Model, the DuPont model, Regression Analysis, and Discounted Cash Flow are discussed in detail.

It's proof of a rare wisdom that Trotta in Translating Strategy into Shareholder Value addresses not only the benefits of each of these tools, but the risks and limitations as well. Translating Strategy into Shareholder Value is strongly recommended for professionals and managers seeking to align strategy formation processes to the maximizing shareholder value imperative and vice versa.

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