Essay Topic: Shareholder Value Provides A Comprehensive Framework For Evaluating Strategic And Tactical Marketing Decisions

1741 words - 7 pages

Essay topic: Shareholder value provides a comprehensive framework for evaluating strategic and tactical marketing decisionsModern enterprise is uninterrupted to ameliorate its own system and constitute accredited standard or criterion on institutional. Today's directorate and top management seem to be more concentrating on shareholder value. Obviously, aim to maximize shareholder value become most enterprises' crucial goal that may affect business strategic and tactical decision-marking. The shareholder value as definition is the value that was contributed from the company which shareholders invest money in. Shareholder value has especial significance in relation to an organization and its business activities. The only reason for maximizing shareholder value is because of offer high return to shareholder will be bring more investment or contribution. If company did not offer any wealth increment to shareholder will be cause the serious consequence that no one would like investing fund into the business. Therefore, shareholder value is a foremost measuring standard for attracting people to invest money.Some early marketing theory indicated that marketing is intention to maximize customers' satisfaction. The most of marketing activities were focused on this point of view. The reason was that the majority of marketing people did not believe the relationship between shareholder value and marketing. Actually, shareholder value and marketing are supplementing each other in modern business. By generally speaking, 'marketing is the management process that seeks to maximize returns to shareholders by developing relationships with valued customers and creating a competitive advantage.' (Doyle, 2000, pp. 233-45). Obviously, shareholder value could affect marketing decisions making and vice versa on this standpoint. To base on this point of view, shareholder value provided a useful framework for evaluating marketing strategic and tactical decisions particularly. This framework could distinguish the decisions making between strategic and tactical.In terms of strategic and tactical are seem to have some analogical characteristics. But in marketing field, we have to distinguish implications characteristics and analyses how differ there are in particularly situation. Briefly example for these two terms that we could be on the assumption that treat business as a hunter, of course he will go for hunting. There are two options for hunter: one is wild boar and second is lion. The problem is which animal that he goes to hunt if he does not want to take high risk. Obviously, hunter would like choosing wild boar because of lower risk. It is strategic decision that was made by hunter. Then hunter find out the opportunity cost of 1 wild boar is 10 pheasants, he prefers 10 pheasants than 1 wild boar. That's the tactical decision was made by hunter. Therefore, in generally speaking, strategic decision is a foremost decision which company made before takes any actions that...

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