978-1118873731 Word Chapter 26 Solutions

subject Type Homework Help
subject Pages 1
subject Words 467
subject Authors David Wessels, Marc Goedhart, McKinsey & Company Inc. Tim Koller

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Valuation: Measuring and Managing the Value of Companies, Sixth Edition
Chapter 26 Performance Management
Solutions
1. A granular perspective for performance measurement means analyzing performance not just at
the division level or business unit level, but down to product segment levels. The key is to go
2. The value driver approach examines the key drivers of value creationlong-term growth and
ROIC, and the short-, medium-, and long-term value drivers of growth and ROIC. How to test for
each particular value driver will vary from company to company. The balanced-scorecard
3. Short-term value drivers include (1) sales productivity metrics; (2) operating-cost productivity
4. Medium-term value drivers include (1) commercial health metrics; (2) cost structure health
metrics; and (3) asset health measures. For Starbucks, metrics for each category might be
5. Long-term value drivers include the strategic health of (1) core business; and (2) growth
6. The goal of setting performance targets is to motivate managers and employees at all levels to
7. Answers will vary. Students have many options. They could develop three different trees for
short-term value drivers. These trees could be a traditional profit and loss tree, a consumer

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