Raymond J. 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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