Objectives:
- 4 components of strategy analysis: firms goals and values, resources and capabilities, structure and management systems and industry environment
- Measurement of profitability, Profit most useful measure of firm performance (maximization of profit)
- Tools of Financial analysis
- Shareholders and stakeholders
-

Value:
- Commerce is creating value
- Firm have to know what profit is and how to measure it
- Economic profit more reliable measure as accounting profit
- Measure of e.p. is EVA, economic value added
- Firm must maximize the future net cash flow to maximize its value and mimimize cost of capital
- C.f. forecasts are very difficult,estimate future c.f. need make assumption
- Important for value maximization is the consistency
Real options theory
- Two types: growth and flexibility options
- Strategic alliances and joint ventures, investment in core products

Putting performance analysis into practice
- Need to asses current situation
- Identify current strategy
- Identify sources of unsatisfactory performance
- Balanced scorecards -> balancing financial and strategic goals
Profits and purpose
- Companies that are more focused on making profit are often unsuccessful at achieving their goals
- “Profits are important for existence of a company but not the reason for its existence”
- Important is to have a dream, to have a joy of creating things
- To have a vision for the future and a core ideology (values and principles) are both important for a powerful strategic of a company

Chapter 3: Industry Analysis: The fundamentals
- Explore external environment
 „sources of profit in external environment“
= industry analysis
- Corporate strategy o Deciding which industry a firm should be engaged in o How to allocate its resources among them o  require assessment (Begutachtung) of attractiveness of different