Between 1997 and 2004 Microsofts ROIC fell from 32 % to 17.5 %. Over the same time,
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Between 1997 and 2004 Microsoft’s ROIC fell from 32 % to 17.5 %. Over the same time, Microsoft’s profits grew from $3.45 billion to $11.33 billion. How can a company have declining profitability (as measured by ROIC) but growing profits? What do you think explains this situation at Microsoft? For 2004, analysts predicted that Microsoft’s ROIC would jump to 35 %. Why do you think this was the case? Was it due to any change in the company’s strategy?
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Strategic management an integrated approach
ISBN: 978-0538751063
9th edition
Authors: Charles W. L. Hill, Gareth R. Jones
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