Strategic Economic Value Added Systems

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.

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).

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.

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.