Explain the importance of strategic planning in maximizing shareholder wealth.?
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Contrary to popular belief, most companies do not have unlimited resources. Through strategic planning a company is able to marshall resources into its core competencies, leverage other business units to grow the bottom line and identify future growth opportunities for the company. All of these factors increase the value of the company which as far as shareholders are concernd, is the only thing that matters. Esp., if the value translates into greater profits, an appreciated stock value, higher dividend payouts....
578949
Rule of thumb for a lot of companies is 5x Annual Revenue unless of course you think it's is an explosive business that will grow 100% annually.  Value of assets of the company are already priced into the 5x number.\n\nRival
393728
Capital Budgeting is deciding which projects the firm is considering are most profitable. Usually done by an NPV or IRR analysis. If the projects are mutually exclusive then this analysis determines which one is the better option. If the projects are independent, the analysis tells you if the projects are profitable or not. By focusing on the best projects a company will maximize shareholder wealth. In order to maximize shareholder wealth over the long term, firms need to chose projects with positive NPVs and fit with their strategic vision.
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In a nutshell, it is the attempt to understand the goals and objectives of the shareholders in relation to their holdings with the company.\n\nPerformance objectives consist of the financial requirements for the organisation and other key result areas, which are critical for the organisation’s short-term and long-term success. These include profitability, return on investment (ROI) return on assets (ROA), earnings per share (EPS), dividends and cash flow. They are usually determined on the basis of satisfying the needs of the stakeholders, which includes shareholders and others who might have a ‘stake’ in the business such as management, employees, customers, suppliers and creditors. The driving force underpinning financial performance in the majority of cases is shareholder value. If the organisation performs well financially, share prices are maintained or increased. If financial performance is below expectations, share prices drop, limiting the organisation’s ability to attract equity financing to underwrite future operations and growth while also exposing the organisation to the danger of a takeover. Poor financial performance, particularly cash flow, also limits an organisation’s ability to attain debt financing (borrowing).\n\nHope this helps!
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In this example you have $10,000,000.00\n\nYou invest $5,000,000.00 in the stock market with the help of a portfolio manager and you reinvest half of your profits and give away the rest to your family.\nIf you get a 10% return you reinvest $250,000.00 and you give away to your family $250,000.00 \nIf you get a 20% return you reinvest $500,000.00 and you give away to your family $500,000.00\n\nThis way you HAVE MORE MONEY EACH YEAR. Therefore you never run out of money.\n\nKeep in mind that with a $5,000,000.00 portfolio you can afford a very expensive portfolio manager that hopefully will protect your money against bad investments and market crashes and war. Therefore there is a very low probability that you will lose money in a year.\n\nEven if you lose, say 20% in the first year. You still have $4,000,000.00 to make more money in the future. (If that happens fire your portfolio manager)\nWhen a bad year ends (Losses) you only give away to your family a minimum wage salary to survive that year or they could survive on credit for an entire year and when the next year comes they pay off all debts or a combination of both.\n\nThe other $5,000,000.00 goes to start a Company (You could easily start 50 $100,000.00 small businesses or 5 $1,000,000.00 medium size businesses)\n\nLike before you reinvest half of the profits in the company and the rest goes to your family.\n\nYou hire 50 managers to run your small businesses or 5 manager to run your medium size businesses and you live your life.\n\nThe key is not to spend $5,000,000.00 to buy a house in Beverly Hills or $250,000.00 to buy a Ferrari because if you burn your money at that rate you will go broke within 3 years. Just like most Actors or Singers.\n\nThere is nothing wrong with a $250,000 Ferrari or a $5,000,000.00 House. \nJust buy them WITH YOUR PROFITS. (Take $125,000.00 from your company and $125,000.00 from your stock market profits and buy it)\nIf you did not make enough to buy it. You could save and buy it the next year.\n\nWealth Management is a very complex subject.\nDrop me a line if you need more detailed advice.
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Before making any decision (such as whether to acquire another business, build another plant, hire more people, invest in a new product, etc.), management should weigh the costs (potential risks included) vs. the benefits to be gained (profits).\n\nThus, for example, if you could make $500/unit of some new product that costs $1000 to develop, you would only need to sell 2 units to break even.  If it is feasible to sell 3 or more, according to this cost/benefit analysis, developing the new product is a good business decision. (bad example, but it should illustrate the point)
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Hello,\nStart by writing a businessplan where you specified the nature of the business projected revenue and cost.
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First of all work out the current expenditure and income, also look at past patterns.\n\nThen work out, if the company increases such and such - how much will income rise, if they have to spend or invest - how much will expenses rise....\n\nThat's it - that's a forecast
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Seriously, post the case details.  In general, though, you reiterate what was in the case for the strategic parts of it, such as why it was a good/bad idea to do XYZ.  For the financial parts of them (if it's a finance case), just open up Excel and map out the cash flows, income statement, balance sheet and whatever else you might need.  Calculate as necessary.
717373
Yeah like the 1st person said, to maximize the production. Operations management gives several techniques to maximize the use of resources, say money, people, materials, etc.  It can also help you plan a proyect through pert and cpm. Sorry i cant tell u more, my main language is spanish so i dont really know how to translate this technical words and the names of the techniques. If you understand spanish i can tell you more.
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Business has never been as competitive, fast and eveloving as it is today. Easy and boundry less communication and integrating global economy is a reason for it. In such a global economy only those businessess survive which are better placed and managed.\n\nHuman resource is the most important element of any organizaiton and it is also the most difficult to manage element within the business. So managerial knowledge is utmost important in steering a business in todays global economy.\n\nStategic management is totally different. It is the process of putting the strategy together and implementing it within an organizaiton. A strategy is broadly classified in 3 level: Corporate Level Strategy, Business Unit Strategy, and Functional Level Strategy. Corporate level strategy is the strategy for the whole business, ie where the business is going, how should it grow/expand, what business areas it should concentrate and areas it should leave. Strategic managment basically deals with this segment of corporate planning.\n\nIn todays business world it is the most important function of corporate planning and business management, without which a business might loose focus, run wayward and waste resources.
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Maybe you can get people power if you offer them a profit sharing plan.  First advertise your offer and invite people to a meeting.  Than make a great presentation of your idea and how it will benefit those who join.  Emphasize how their investment now will soon benefit them.
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the most important in a  business is money managment.
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I mainly see advantages! If you are the majority stockholder you can always fire your board, but if you bring them on board (pardon the pun) wisely, you should never have to fire them!\n\nInformation obtained from The Entrepreneur's Survival Guide:\n\n"One sure way to bring in new ideas is to get outside assistance. Which is why it is so important to have an outside board of advisors or board of directors. If chosen wisely, the people on the board can help you through the tumultuous maze of building a business, and provide you with reality checks for your company and sanity checks for you. Lawyers, accountants, consultants and bankers can also be a great source of advice and counsel. By trying to go it alone, your road is surely tougher and the chances for success are certainly not as high as they could be otherwise."
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Making sure the company is maximizing its capital resources, by investing owner's money in the most profitable way.  On top of that, finance division must have accountability, integrity and best services.
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As in any form of management, HR planning requires you to...\n Understand the objectives, \n Ideate and brainstorm, \n Form a strategy, \n Create task forces to execute the strategy (also called tactical execution), \n Follow up, Assess and maintain proper execution.
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Since we can't tell at what point you are in your business planning I agree with answer number two.  SCORE is a great place to get started.  I have added a few more websites if you are still looking for direction/ideas/answers.  \n\nGood Luck