Relationship between revenue (sales) and profit and how publicly traded companies
you learned about the relationship between revenue (sales) and profit and how publicly traded companies report their earnings to stockholders quarterly. Many industries run on a seasonal cycle, meaning their revenues and costs may fluctuate. Managers must manage investors' expectations while creating long-term, annual, and seasonal strategies that drive growth and competitive advantage. Even more important than creating these strategic plans is executing them.
Read the following articles for insight on the tension between focus on short-term and long-term financial goals:
How executives can help sustain value creation for the long term.
Babcock, A. Williamson, S., & Koller, T. (2021, Jul 22). McKinsey & Company.
How to escape the short-term trap. Davis, I. (2005, Apr 1). McKinsey & Company.
In a double-spaced MS Word document (300-500 words) discuss how the concepts you've learned in the Service-Profit Chain relate to examples given in the article.
How can managers get caught up in the need to placate the market?
How can focusing on the service profit chain keep companies on track for long-term growth?