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Adapt Your Strategy to Higher Interest Rates

Harvard Business Review

While many executives and investors were thrown by last year’s interest rate increases, the cost of capital needn’t be a threat. Companies that integrate the cost of capital into their strategy and planning reap real benefits. When something is cheap, people waste it.

EPS 22
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A Refresher on Cost of Capital

Harvard Business Review

You’ve got an idea for a new product line, a way to revamp your inventory management system, or a piece of equipment that will make your work easier. You’ll likely be asked to show that the return on the investment will be better than your company’s cost of capital. What is the cost of capital?

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The Rise of FinTech in Supply Chains

Harvard Business Review

The use of FinTechs allows suppliers to access funding at the multinationals firm’s lower cost of capital.). They include new enterprises such as Orbian , Prime Revenue , C2FO , Taulia , and Ariba as well as new operations launched by traditional financial service firms such as Citi Group, HSBC, BNP Paribas, and Deutsche Bank.

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CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

” A quarter century later, not much seems to have changed: fewer than five out of the 100 CEOs on HBR’s 2014 list of best-performing CEOs even mention “return on capital” on their official biography — and none of those five lead companies listed in the Dow Jones Industrial Average (DJIA) or in the EuroStoxx50.

CEO 8
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Shutting Down Stores Doesn’t Have to Be Bad for Business

Harvard Business Review

A major challenge for all retailers is managing the closures in a way that maximizes revenues and profits. Our studies of a wide range of retailers have found that companies often have the most difficulty managing death. Over time, retailers have identified and adopted many innovative ideas to manage these complex tasks.

Retail 8
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We Can’t Study Short-Termism Without the Right Metrics

Harvard Business Review

While a laudable effort in principle, measuring a company’s tendency to make myopic operating and investing decisions is fiendishly complex. But the other indicators probably pick up legitimate differences in how companies in the sample operate, as opposed to whether they are myopic.

EPS 8
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4 Ways Leaders Can Get More from Their Company’s Innovation Efforts

Harvard Business Review

Another pervasive reason is that senior executives are trained as operators, not innovators. And there’s a fundamental conflict between innovation and optimizing an existing operation. To close the gap, we need to treat innovation differently than we do normal operations. Here are four things leaders can do.