Is There a Downside to Conducting a Full-Blown Strategic Analysis?(Marketing)

Topics: Marketing, Stock, Stock market Pages: 2 (473 words) Published: October 22, 2012
Sandra Pogoda
MGMT 422
Chapter 6: Q1, and Q3
Question 1
Shareholder value analysis refers to a calculation of the value of a company made by looking at the returns it gives to its stockholders. It gives additional perspective on the financial performance of the company, and helps to develop new strategies to drive the ROA. The principle of shareholder value analysis is that the company adds the value for its stockholders when equity returns exceed equity costs. Once the amount of value has been calculate, goals for corrections can be set and shareholder value can be use to measure the performance. In addition, some advantages of SVC are that it captures a long-term financial view on which to base strategic decisions. SVC is a practical tool for business managers at all levels. It also helps to identify what drive shareholder value, for example quality of services/goods provided, or length of time to deliver the product. Moreover, it forces the organization to focus on the future and customers. However, there is a risk that comes with reducing investment and that is if you pay off too much debt and reduce your advantage, and you may not garner enough assets. In addition, by reducing the investment, you may sabotage customer experience, or service quality. You also reduce the priority given to your other, perhaps loyal employees, suppliers, or customers.

Question 3
McDonald’s * For MacDonald’s the most important performance measure would be product quality, as the public has become more concerned with health in recent years, and as the food industry has become the target of policymakers attempting to legislate health. * Fast food is now seen as one of the main contributors to heart disease, diabetes, and obesity. MacDonald’s needs to create a strategy that would allow to become more responsive, more quickly to the market demands, trends, threats or opportunities, or perhaps it will allow them to improve areas of weaknesses when it comes to product...
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