What is the main purpose of strategic management processes in a business valuation context?

The main purpose of strategic management processes in a business valuation context is to manage resources effectively. In a business valuation, understanding how a company allocates and utilizes its resources—such as human capital, technology, and financial assets—is crucial for accurately determining its value. Effective management of these resources helps ensure that the company operates efficiently, creates competitive advantages, and ultimately enhances its profitability and value in the marketplace.

While defining pricing strategies, assessing financial performance, and developing customer relationships are important aspects of a business's overall strategy, they are more specific operational functions rather than the overarching goal of the strategic management process. The primary aim is to ensure that all resources are aligned with the company's objectives, facilitating growth, innovation, and long-term sustainability, which are essential for an accurate and reliable business valuation.