Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Back to overview

What are typical strategic gains (non-financial gains) a company considers when making an investing//divesting decision?

As title suggests

1
3.5k
14
Be the first to answer!
Nobody has responded to this question yet.
Top answer
on Aug 10, 2017

Hi Anonymous,

First of all, when talking about non-financial gains, it's important to begin by understanding company's strategy and strategic goals. 

Afterwards, a company's portfolio manager together with senior management should prioritize qualitative factors that are important in achieving those strategic goals. Those factors will be used to evaluate the investment.

Let's assume that we are talking about an airline similar to SWA. We could formulate the strategy as: "Grow nationwide as an airline known for outstanding service and corporate culture".

Therefore, we can see already 3 qualitative factors here:

  1. Expansion - will the investment help the company to capture bigger market share and wider geography?
  2. Customer satisfaction - how the investment will affect the perception of customers?  Will the service quality increase/decrease for some reason?
  3. Company's culture - will it be affected by our investment? If a company is buying another airline, are we talking about compatible cultures? If we are divesting, how it affect employee morale short-term and overall culture long-term?

Thus, to summarize:

  1. Define strategy
  2. Define factors that affect the strategic goals
  3. Evaluate decision based on the list

The approach is similar to what we are using, when creating Balanced Scorecard, and BSC has similar purpose - it helps to evaluate non-financial performance of a company.

- Tadeus

5
Similar Questions
Consulting
Steve Jobs Critics about Consulting
on Jul 09, 2024
Global
3
2.4k
Top answer by
Florian
Coach
1400 5-star reviews across platforms | 600+ offers | Highest-rated case book on Amazon | Uni lecturer in US, Asia, EU
56
3 Answers
2.4k Views
+1
Consulting
Trading public stocks prohibited in McKinsey?
on Oct 08, 2024
Global
5
2.3k
Top answer by
Laura
Coach
Ex-Bain Consultant // DM me to book a complimentary coaching session
50
5 Answers
2.3k Views
+2
Consulting
MBB vs Other Firms
on Mar 29, 2025
Global
8
600+
Top answer by
Evelina
Coach
EY-Parthenon (7 years) l BCG offer holder l 97% success rate l 30% off first session l free 15' intro call l LBS
17
8 Answers
600+ Views
+5