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19 Cards in this Set
- Front
- Back
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Stakeholders |
Parties indirectly affected by the company (nearby restaurant or bar owners, shops, etc) They get a side benefit from firm indirect interest |
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Shareholders |
Those who own the equity of the company (companies w/shareholders have a board) “1 share, 1 vote” |
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Chairmen / President |
Comes to work to preside over meetings
Paid: corporate stipend and some shares
Elected or reelected
Worried about the future (long-term)
Focus: on the outside (investor relations)
Endgame: Legacy
Philosophy: “Do the Right Thing”
Decisions: STRATEGY (what we’ll do) |
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CEO |
Comes to work every day
Paid: salary and bonus (“comp+ben" package)
Hired or fired
Focus: inside (unions)
Worried about the present (short term)
Endgame: his Performance
Philosophy: “Do things right” (execution)
Execution: TACTICAL (how we’ll do it) |
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"1 Share, 1 Vote" |
Vote on resolutions: Executive pay Yes or no to downsizing Yes or no to should we create a call center? Blocking hostile takeover [poison pill] Yes or no merger New amendment Entry to new business line How often? Once a year or at AGM (Annual General Meeting) How? In person or by proxy (by mail) Proxy advisingfirm |
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Shareholder Activism |
When shareholders assert their power as owners to influencecompany’s behavior Direct challenge to boards |
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Strategy |
A boundary marker of what the company DOES and what the company DOES NOT do.
Its just as important to acknowledge what a company doesn’t do, to define its limitations
Sends aclear message to the shareholders so they know what they’re investing in. |
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STRATEGY mustanswer 3 fundamental questions |
1. Where do we compete? -Find an attractive market opportunity 2. How do we compete? -Serve the market opportunity better thancompetitors -Using tangible (or) intangible resources -Vineyards -Diamondmine -Reputation -Philosophy -Leadership -Culture/feelingof the company 3. How to implement the “How” and “Why”? |
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Primary Market (marché primaire) |
Share Price: set by company management Time: roadshow and bookbuilding +- 6 months *Liquidity: low (price setting in hands of few) # of Shares: high minimum |
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Secondary Market (marché secondaire) |
Share Price: Open to the general public bid/offer spread
Time: infinite/forever
*Liquidity: high
# of Shares: 1 share (protected by regulator) |
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*Liquidity |
Ability to buy or sell: 1.)A financial instrument quickly and easily 2.)Without moving the price too much |
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3 Major Macro-Economic Indicators |
Growth: GDP (Gross Domestic Product)
Inflation: CPI (Consumer Price Index); calculated in USA by General Accounting Office
Employment: Unemployment Rate |
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Investor Relations Strategy (definition) |
1. IR serves as a bridge for providing market intelligence to corporate management to facilitate strategy decisions.
2. IR is the communication of information and insight between a company and the investment community (community is very broad; can bethe general public). |
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DOUBLE TROUBLE – Business in France “The Economist” Article |
France is giving loyal shareholders who haveowned stock in the company for more than 2 years double the voting rights One-share-one-vote is no longer the right ofshareholders. Wholly free markets for takeovers aren’t adivine right either. |
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Five Forces Model (assessing competitive pressures) |
1. Supplier Power 2. Buyer Power 3. Competitive Rivalry 4. Threat of Substitution 5. Threat of New Entry |
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Strategic Vision |
Describes the route a company intends to take indeveloping and strengthening its business; it lays out the company’s strategiccourse in preparing for the future—forward looking. |
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3 things a Mission Statement should cover |
1. Customer needs being met - (What isbeing satisfied) 2. Customer groups or markets being served - (Who isbeing satisfied) 3. What the organization does to satisfy thetargeted needs of the targeted customers - (How customer needs are satisfied) |
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Statement of Values |
Developedto guide a company’s pursuit of its vision and strategy, and paint the whitelines for how a company’s business is to be conducted. |
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Key Success Factors (KSFs)(KPI = Key Performance Indicators) |
Competitivefactors and attributes that affect everyindustry member’s ability to be competitively and financially successful. Particular attributes that are so important thatthey spell the difference between: -Profit and loss -Competitive success or failure |
