Creating value to keep the raiders at bay

Abstract

Thanks to an unprecedented wave of takeovers, LBOs, spinoffs, divestitures, and other corporate ‘restructuring’ moves, many executives have become painfully aware of the importance of creating good value for shareholders. One result of this growing concern has been a keen interest in a value-based approach to strategic management, designed to focus the attention of all levels of a corporation on creating and maintaining shareholder value. This approach combines financial value-based planning methods with strategic management techniques like portfolio planning and competitive strategy analysis. What is most important—the value-based method offers a way to measure and reward business level contribution to corporate shareholder value. Successful implementation of this approach promises to create lasting value: by far the best defense from corporate raiders.