Our experience at Owens Strategy Group suggests the following:

1. Management has a fiduciary duty to increase shareholder value, which requires increasing the present value of future cash flows.  This is often achieved when a company delivers superior growth, profits, returns and cash flow from its core businesses; executes a disciplined acquisition, divestiture and brand licensing program; and redeploys cash for the benefit of its shareholders.

2. Superior growth is a result of delivering superior value - i.e., superior benefits at a given price - to consumers, relative to the competition. Benefits may include product performance, convenience, innovation, branding and any other characteristic which is valued by the consumer.

3. Since competition always intensifies over time, a consumer value advantage can only be sustained through continuous value improvement at a pace that meets or exceeds the competition.  Market share trends are a key indicator of consumer value trends relative to the competition.

4. Superior profits, returns and cash flow require delivering superior value with lower costs and assets, relative to the competition.  In order to maintain superior profitability over time, cost and asset levels must be continuously reduced at the same or faster pace than the competition.  Fixed asset and working capital reductions are important sources of cash.

5. Some businesses and markets are inherently more attractive than others, which means leading competitors are more likely to achieve and sustain superior growth and profitability.  Portfolio analysis is aimed at increasing the percentage of a corporation's investment in businesses which are advantaged leaders in the most attractive markets.

6. Acquisitions, divestitures and brand licensing offer significant opportunities to create shareholder value.  Successful acquisitions are typically leaders in attractive markets, highly synergistic, easily integrated and not too large relative to the acquirer.  The key is to avoid overpaying.  Successful divestitures are typically non-core or under-performing businesses in unattractive markets.  The keys are to identify all potential buyers and minimize transaction costs and dis-synergies.  Successful brand licensing requires the brand to be of sufficient scale to justify extension beyond the brand's core channels of distribution.  The key is to select the right licensor or licensee, negotiate the right deal, and then manage the licensed business aggressively throughout its lifetime, which can be indefinite.