Question

Please include a word count at the end of your post (excluding citations and references), no matter whether it is an initial post or a reply. For many people, the shareholder perspective is perhaps the most familiar measure of competitive advantage for publicly traded firms. What are some of the disadvantages of using shareholder value as the sole point of view for defining competitive advantage? Any examples to illustrate your point(s)

Answer 1

I do agree with your statements because a lot of the shareholders who invested money and bought shares will leave the company if it is falling apart which increases the risk and from the shareholders' perspective, the measure of competitive advantage that matters most is the return on their Risk Capital such as capital provided by shareholders in exchange for an equity share in a company that cannot be recovered if the firm goes bankrupt, Investors are primarily interested in a company's Total return to Shareholders and return on risk capital that includes stock price appreciation plus dividends received over a specific period