You might consider emphasizing that investors value growth in free cash flows.
For the principles, see Tom Copeland, Tim Koller, and Jack Murrin, Valuation Measuring and Managing the Value of Companies, 4th Edition, (2000), Wiley: <st1:place w:st="on">Chichester. </st1:place>
For an eloquent practical explanation of why free cash flow is of over-riding concern to investors, rather than accounting profits, see the letter to shareholders that opens the 2004 Annual Report from Amazon.com (www.amazon.com Investor Relations/Annual Reports). Recall that Jeff Bezos was a Wall St star before founding Amazon. This is implies that Strategic competitiveness is perhaps the ability to deliver stronger, sustained growth in free cash flows than rivals, rather than comparisons of profitability or return ratios.
Kim Warren - London Business School
A question about firms competitiveness
I'm teaching a class of Global Strategic Management to Grad Students at the University of Florida. In addition to what has been mentioned in the textbook (I'm using the 8th edition of the Hitt, Hoskisson and Ireland "Strategic Management"), we discussed in class about measuring firms strategic competitiveness, in other words which are the indicators of a firm's strategic competitiveness. Besides, we enlarged our discussion talking in general about firms competitiveness. Now, it's time to come with an effective summary of what we said in class about this topic that, apparently, is not so discussed in depth in the textbooks or even in the major journals' articles.
Do you have any suggestion (a reading, an article, a paper) that can help me in summarizing all the principal measures of firms strategic competitiveness and, more broadly, firms competitiveness?
I appreciate your help. Thank you
Rosario Faraci, Ph.D.
Professor of Business Economics and Management at the University of Catania (Italy).
Visiting Professor of Strategic Management at the University of Florida (USA)
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Rosario Faraci, Ph.D.
Professor in Business Economics and Management
Department "Impresa, Culture e Società"
School of Business Economics - University of Catania
Corso Italia, 55 - 95129 Catania (ITALY)
Phone: 39 095 7537616; Fax: 39 095 7537510
Personal Fax: 39 095 7084222