Aims – growth, survival …
I made a strong case in a previous post that strategy research should have been asking how strong firms grow cash flows, not deliver profit ratios. I had two main push-backs – 1. is growth relevant in present conditions? – 2. survival is really all that matters. Read more
More on growth vs. ROIC
One challenge I got from the academics on the issue of strategy tools’ usefulness was whether growth is still a relevant question in these recessionary times. Read more
Why has Amazon.com been so unsuccessful?
The SMS conference reminds me of a long-standing puzzle. We have known for decades that investors value growth in earnings – because they either get rising dividends or a rising stock price they can sell on. Profitability – return on sales or on assets - is only of interest insofar as it enables future earnings growth. So how come the strategy field is obsessed with ‘explaining’ why some firms are more profitable than others, when investors aren’t interested and management does not pursue it? Read more