Strategic Economic Value Added Systems

Strategic Economic Value Added Systems Strategic EVA Systems identifies affirmative economic value propositions in stagnant businesses.

04/13/2025

Strategizing Amid Uncertainty in the Strategic Planning Process

In today’s volatile global economy, formulating competitive strategies amid uncertainty—particularly when navigating shifting trade tariffs—is increasingly complex. It requires astute leadership and agile decision-making to manage the turbulent waters of international trade.

Periods of trade uncertainty often result in significant disruptions to key stakeholder relationships, including supply chains, pricing structures, customer behaviors (both buyers and sellers), geopolitical stability, and employment trends. These factors must be fully integrated into an organization’s strategic planning process, especially when new trade barriers are introduced that alter the competitive landscape.

In such environments, tariffs play a pivotal role in reshaping competitive advantages. Only the most adaptive organizations—those capable of responding swiftly and strategically—can effectively navigate the uncertainties driven by evolving international trade agreements. These agreements often aim to correct perceived imbalances in global trade, yet they can spark escalating trade disputes that ultimately determine winners and losers in what is supposed to be a free market.

Geopolitical forces increasingly shape the competitive landscape, influencing everything from buyer and seller bargaining power to pricing strategies, product and service substitution, market entry and exit, and labor union negotiations.

At Strategic Economic Value Added Systems (SEVAS), we specialize in building advanced financial scenario models to evaluate the impact of each tariff on both domestic and international sales. We help organizations leverage critical buyer-seller relationships, manage their balance sheets with prudence, and strategically reallocate resources to sustain competitive advantage—even in the face of global trade volatility.

From the digital economy has emerged the data/algorithm economy and its development has transformed commence on every as...
11/05/2023

From the digital economy has emerged the data/algorithm economy and its development has transformed commence on every aspect of business. Thereby, this phenomenon has changed the competitive landscape of how organizations attain and sustain a competitive advantage. To compete in this insurgent economy organizations are investing heavily in technology that provides predictability, i.e., affirmative evidence/data for decision-making. We at Strategic Economic Value Added Systems are using this paradigm of decision-making that enlists affirmative/facts-based/data economics at all functions of the organization, i.e., marketing, finance (risk-management), and operations to add value.

Affirmative/data economics strategic planning entails a paradigm shift of capital budgeting from capex [capital expenditures] for the sake of it, to opex [operating expenses] for decision-making, strategic planning, or value maximization based on affirmative evidence. Understanding how the algorithm [capex] can transform data into affirmative evidence is key to the C-suit strategic arsenal for value-maximizing decision-making. At Strategic EVA Systems (institute) LLC, Dr. Mallett’s proprietary affirmative evidence (facts/data-based) concept for decision-making has made significant strides in linking organizational data [both capex and opex] to organizations’ market value.

ESG StrategiesAs the government is moving expeditiously to regulate publicly traded companies to report greenhouse gas e...
05/09/2023

ESG Strategies

As the government is moving expeditiously to regulate publicly traded companies to report greenhouse gas emissions in their disclosures to Securities and Exchange Commission (SEC) filings that will appraise investors of the potential risk posed by climate change, C-suites are mobilizing to attain ESG (environmental, social, and governance) strategies. These mandates were made in concert with International Sustainability Standard Board (ISSB) to combat and provide global guidance on sustainable climate levels and risks. ESG is an evolving phenomenon bored out of our societal environment ecosystem forces we are combating/engaged on all four fronts concurrently, i.e., Political-legal Forces (tariffs, trade agreements, labor regulations/minimal wage, and environmental regulations/ESG); Sociocultural Forces (expansive virtual world created by the global pandemic); Economic Forces (Supply Chain disruptive, inflation, increased interest rates, oil prices, and employment imbalances); and Technological Forces (virtual/remote employment, E-commence, and artificial intelligence [AI]).

At Strategic Economic Value Added Systems LLC, Dr. Mallett utilizes affirmative (scientific) management tools (a strategic management model) to perform a SWOT analysis that scans organizations' Societal Environmental and tailors a model to meet organizations’ individual needs that address both adverse and amicable environmental factors.

Does Stock Buy Back Add Real Value or Just Intrinsic Value An Quantitative Analysis under EVA and MVA Financial MetricsT...
04/18/2023

Does Stock Buy Back Add Real Value or Just Intrinsic Value An
Quantitative Analysis under EVA and MVA Financial Metrics

There has been great debate over whether stock repurchases add real long-term value. Well Strategic Economic Value Added Systems, LLC makes a quantitative (affirmative facts-based) analysis. Proponents of stock repurchases contend that they enhance shareholder value in several ways, i.e., they avoid double taxes which are incurred at both the corporate level and then the shareholder level, reduce the number of shares outstanding and thereby boost earnings-per-share, send a positive signal to the investment community that the stock is undervalued. Where opponent contends stock buybacks negate internal investment in R&D and growth strategies which more efficiently utilizes capital and provides a greater return on capital. The two financial measurement systems Economic Value Added (EVA) and Market Value Added (MVA) are the most reliable financial valuation tools available to measure a firm’s market performance that is highly correlated. EVA estimates a Company’s internal performance that influences (is linked) to its external market value performance (MVA). EVA is a corporation’s internal performance measure that drives MVA—and MVA is the external market assessment of the corporation’s performance that influences Wall Street. Evaluating a company’s EVA and MVA is in a nutshell represented by the following formulas:
EVA = operating profits — (total capital supplied x cost of capital)
= ( r — c* ) x capital; where r = the rate of return on capital; and c* = the cost of capital
where
MVA = total market value — total capital supplied:
EVA is maximized when the spread between r and c* is increased, whereas MVA is maximized when the spread between total market value and total capital supplied is increased. Thereby, under MVA metrics when stock is repurchased, it reduces the amount of capital supplied as the number of shares outstanding is decreased while the price per share remains constant (total market value). Likewise, under the EVA metric, it is increased/maximized when shares of stock are repurchased as it takes less capital to finance a firm’s operations, thus decreasing its cost of capital considering debt remains constant since capital is a combination of both debt and equity (common stock).
Therefore, stock repurchases have an amicable effect on an organization’s stock price as it maximizes/increases the relevant spreads in both EVA and MVA which are correlated, whereby it takes less capital to finance a firm’s operations since total capital supplied is a function of both EVA and MVA.

Alibaba’s divestment strategy could be the resurrection of divestitures strategies which could proliferate corporate Ame...
04/01/2023

Alibaba’s divestment strategy could be the resurrection of divestitures strategies which could proliferate corporate America again as a means to unleash hidden value when their organizations operate independently of certain business units and divisions. Divestitures strategies make up three basic types, i.e., sell-offs, spin-offs, and split-ups. Alibaba chooses to institute the latter strategy as a means to unlock shareholder value (stock price appreciation) while increasing its market competitiveness. Traditionally when divestitures were implemented to increase shareholder value, organizations only received short-term stock returns where Wall Street recognized that the divestitures were not grounded in good strategic logic, e.g., emerging more competitive.
In Alibaba's case, its split-ups are presumed to increase its “market competitiveness’, thereby grounded in earnest strategic logic. At Strategic Economic Value Added Systems, LLC, its affirmative management protocol (research-based), can identify prudent divestiture maneuvers/strategies that create long-term shareholder value with established benchmark models that identify long-term economic value divestments that adds value and those that destroy long-term value.

Rising interest rates are affecting organizations' cost of capital and how well they maximize their economic value (prof...
03/20/2023

Rising interest rates are affecting organizations' cost of capital and how well they maximize their economic value (profits performance). An organization’s cost of capital is a function of its economic value added (EVA) as followed: EVA = operating profits — (total capital supplied x cost of capital). Thereby, progressive organizations employ EVA as their performance metric tool to gauge whether shareholders’ wealth is being maximized (created). The only way this is accomplished is if organizations' operations that are being financed exceed their cost of capital (its equity/preferred & common stocks and debt).

Thus, an organization's balance sheet/capital structure/cost of capital must be structured in a way that its operational (capital) costs do not exceed its cost of capital. At Strategic Economic Value Added Systems, Dr. Mallett has compiled various studies to identify the idea financial maneuvers to minimize an organization’s cost of capital to maximize its EVA from asset divestitures, changes in dividends policy, hybrid maneuver (divesture and debt retirement), and non-financial maneuvers (i.e., productivity improvements).

The affirmative management concept was proprietarized in Dr. Mallett's doctoral dissertation when he employed affirmativ...
03/01/2023

The affirmative management concept was proprietarized in Dr. Mallett's doctoral dissertation when he employed affirmative evidence (financial data) to explain which financial variables possessed the greatest predictability (explanatory power) in identifying organizations' true market value added (MVA). With the inception of Strategic Economic Value Added Systems LLC, Dr. Mallett expanded the affirmative evidence concept across organizational functions as a value proposition that institutes affirmative evidence (functional data) to identify functional value drivers.

Employment Imbalance Fueled by Economic UncertaintiesEmployment imbalances have fueled the need for a creative approach ...
02/11/2023

Employment Imbalance Fueled by Economic Uncertainties

Employment imbalances have fueled the need for a creative approach to human resource management as a strategic organizational function for obtaining and sustaining a competitive advantage. Economic uncertainty and downturn from the global pandemic fueled commodity shortages from supply chain difficulties exacerbated by the war. This precipitated insurmountable inflation and prompted The Great Resignation resulting in employment imbalances that presented real challenges as well as significant opportunities. Strategic EVA Systems institutes its research-based (affirmative) management concept to integrate human capital strategies, i.e., motivation, employee satisfaction, its novel demographic fit concept, organizational learning (upskilling), etc., to alleviate attrition, organizational inertia, and resistance to change while enhancing innovation, organizational growth, flexibility, and economic profits.

Organizations are making provisions for the foregoing recession with massive layoffs in an effort to mitigate their loss...
01/23/2023

Organizations are making provisions for the foregoing recession with massive layoffs in an effort to mitigate their losses. With the recessionary construct (phenomena) developed at Strategic Economic Value Added Systems, Dr. Mallett institutes their proprietary affirmative (facts-based) management system to model management’s recessionary dilemmas tailored to its environment’s constructs; thereby, maximizing organizations' economic value during an economic downturn. This entails developing an affirmative management models that identify recessionary drivers linked (associated) to financial/security markets value drivers.

As a single researcher at Strategic Economic Value Added Systems, Dr. Mallett’s proprietary affirmative (facts-based) ma...
01/16/2023

As a single researcher at Strategic Economic Value Added Systems, Dr. Mallett’s proprietary affirmative (facts-based) management system models (identifies) constructs that are highly correlated to management’s dilemma whether challenges or opportunities. His scientific methods (model) utilizes general accepted research methodology to provide management a decision-making system to address evolving events and trends in technology, economics, emerging policies, e.g., ESG, and the other most paramount emergents in their competitive arena.

Managing cash flow has become a significant strategic challenge in our post-pandemic economy that precipitated exogenous...
01/13/2023

Managing cash flow has become a significant strategic challenge in our post-pandemic economy that precipitated exogenous inflationary pressures resulting from supply chain disruptions which have made it arduous for organizations to assess, forecast, and manage their cash flow. Surrogate balance sheet management in the current complex operating environment has led to inefficiencies that have affected many organizations' competitiveness. At a time when cash flow is paramount, legacy account payable (AP) protocols can adversely affect cash flow in stringent Just-In-Time production and tight supply chain environments where vendors are King. Strategic Economic Value Added Systems affirmative management system identifies key cash flow drivers that improve cash flow.

The bombardment of unforeseen catastrophic events of modern times, such as the pandemic and the incursion of Ukraine, em...
01/04/2023

The bombardment of unforeseen catastrophic events of modern times, such as the pandemic and the incursion of Ukraine, emerging regulatory issues prescribed by ESG has top management rethinking how to utilize research-based (affirmative management) tools to navigate how to sustained stability, cross-functional synergy, competencies, innovation, attaining and retaining talent. Strategic Economic Value Added Systems’ affirmative management (facts-based) analysis tools enable organizations to mitigate economic crises created by exogenous shocks.

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