Publications
Publications
- April 1997
- HBS Case Collection
Note on Value Drivers
By: Benjamin C. Esty
Abstract
Presents a framework for analyzing strategic decisions. Takes as given the practice of value-based management whereby managers use value as a primary criterion when making financial, strategic, or investment decisions. Through a simple valuation model, it shows how equity value is related to three value drivers profitability, advantage horizon, and reinvestment. Also presents a numerical example to illustrate the model as well as empirical evidence to support the relation between value creation and the value drivers.
Keywords
Decisions; Equity; Financial Strategy; Investment; Profit; Framework; Growth Management; Value Creation
Citation
Esty, Benjamin C. "Note on Value Drivers." Harvard Business School Background Note 297-082, April 1997.