VALUE MANAGEMENT IN WEAKLY GROWING INDUSTRIES AN EMPIRICAL ANALYSIS USING THE CHEMICAL INDUSTRY AS AN EXAMPLE

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Ulrich Pidun, Michael Wolff

DOI:10.22495/cocv5i1p3

Abstract

In the literature, growth is discussed as a key value lever within the framework of value-based management as it creates opportunities to generate additional free cash flow and thus to increase the value of the company. However, opportunities for high growth rates, for example through technical innovations or the creation of new customer groups, are not equally distributed across industries. Using 61 companies from the chemical industry as an example, it is shown that above average capital market performance is possible also in industries with below average growth rates. The requirement for this to take place is the consistent exploitation of all available levers of value management. In contrast, a pure focus on increasing profitability has not proven to be a sustainable value creation strategy.

Keywords: Value Management, Shareholder Value, Growth Strategy, Total Shareholder Return, Chemical Industry

How to cite this paper: Pidun, U., Wolff, M. (2007). Value management in weakly growing industries an empirical analysis using the chemical industry as an example. Corporate Ownership & Control, 5(1), 31-37. http://doi.org/10.22495/cocv5i1p3