Maximising market share rather than shareholder value may be a critical decision for management, but the right one in the long run. Do you agree or disagree with this statement?
Market share is the term used for the dominance of the company in the market, or simply the size of the customer base. Some companies have small base in the regional markets, while some are international. In either case the importance of retaining the market cannot be overstated. The loss of customers would immediately translate to loss for the company and thus it will be driven out of the market. So market share is the basis for the company's profit and enhancing value. While the stock holders and share holders and those having interest in the company have priority in protecting their assets and stake in the company -- the question if market share or stake holder value is to be seen as the basis for value addition - has a very clear answer.
Shareholder Value: The Concept and its Importance
The question is why is the stake holder interest is being considered at all? If the definition of profits and value is based on the sale, or better the cost effective sale to a greater market, then the consideration must be for the market. But the value of the stake holder becomes important in answering the question - for whom the company's efforts must be? The common answer is to build shareholder's wealth. In management practices then the correct thing to do is to assign financial goals that will be the aspirations...
The only ones who will gain from these measures are the CEOs, managers, and Board of Directors. Shareholders will suffer through the actions of the few. Due diligence will be rewarded with dwindling returns for the shareholder. Does Shareholder Value Matter Any More? The old theory was that if banks took care of shareholder value, everything else would fall into place (Nocera 2009). Shareholders were considered one of the most important
strategy came up in my mind: What is strategy? Why is strategy important for an organization? I strongly agree with Rich Horwath in his article "The Strategic Thinking Manifesto" that strategy is all about creating a competitive advantage in the marketplace (Horwath, 2012). It entails knowing what to do in order to be a winner in a stiffly competitive business environment. Strategy can in fact be likened to a
Balanced Scorecard Financial Market share -- gain fifty percent of the local market share within a three-year period. Profitability -- break even within the first two years of operations and earn a $20,000 profit by the beginning of the fourth year. Competitive Position -- establish the business as the "hometown" alternative of choice for premium coffee beverages and related goods through full participation in community events such as softball teams or fundraisers. Customer retention or
In other respects, however, the evidence does not readily conform to theoretical predictions. For example, if gross job turnover is taken as a rough proxy for labor market flexibility -- and since stringent EPL reduces both hiring and firing -- it is quite surprising to find that job turnover rates are very loosely related to EPL rankings. Most remarkably, not only are the estimates for Italy and France, at
Value-Based Management (VBM) is a management philosophy that aims to achieve superior results (Niedell, 1996). This process measures performance by the value that is returned to shareholders. Successful implementation of VBM requires a successful change in corporate culture, as well as the adoption of VBM concepts at all levels and functions within an organization. VBM includes an integration of performance measurement, compensation, strategic planning, training, and communication (Porter, 1986). The
Pharmaceutical industries have to operate in an environment that is highly competitive and subject to a wide variety of internal and external constraints. In recent times, there has been an increasing trend to reduce the cost of operation while competing with other companies that manufacture products that treat similar afflictions and ailments. The complexities in drug research and development and regulations have created an industry that is subject to intense
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