Task 2 : Setting objectives

The purpose of setting objectives is to convert the Mission into SPECIFIC PERFORMANCE TARGETS for the company to achieve.

Two types of objectives

Financial objectives
Company point of view	ECOFINE LINKS
Economic Value Added (EVA)	EVA
Net Present Value (NPV)	NPV
Return on Investment (ROA)	ROA
Cash flow	Statement of Cash Flow
Weighted Average Cost of Capital (WACC)	WACC
Shareholders point of view
Expected return for shareholders (Return on Stock)	CAPM
Return on Equity (ROE)	ROE
Market Price of Share	Stock policy & Dividend Policy
Price Earning Ratio (PER)	PER
Earnings pe Share (EPS)	EPS
Strategic objectives
Attaining a stronger Market position towards competitors	Porter5 Forces
Becoming an industry leader	Porter5 Forces
Etc	The 5 tasks of SM process

 

Financial & strategic performances should include :

- short-run objectives : target performance levels to be achieved soon (usually this year)

- long-run objectives : target performance levels to be achieved later on (within 3 to 5 years)

 

Sources :

Gaining and Soustaining Competitive Advantage, Jay. B. Barney, Addison-Wesley, 1997

Contemporary Strategic Analysis, Robert M. Grant, 3th edition, Blackwell, 1998

Strategic Management, Raphael Amit, Professor at Wharton University of Pennsylvania, US

Strategy formulation and implementation : Tasks of the General Manager, by Arthur A. Thompson, Jr & A.J. Strickland III, 1992

 

 

(c) Bernard Jaquier, Professor in Economics and Finance, Lausanne, Switzerland, 2020