This case study is designed to encourage debate on the relative importance of financial engineering of an opportunity portfolio to maximize its potential value, compared to leveraging an existing set of capabilities to create value.
The premise is that Maradarko and Copache have both lost ground to their peer company Aristoil in creating shareholder value, have developed an interesting set of growth opportunities the value of which have not been fully recognized by , and face important strategic decisions on whether to pursue all the opportunities or sell down or out of some of them. The strategic decisions require reflection on the intrinsic value of each opportunity in terms of its growth potential, returns on investment and risk as well as the positioning of each company in terms of shareholder value proposition. What attracts shareholders to each company beyond the financials? Do investors understand and more important do they like the current strategies, what capabilities do they believe are distinctive, do they trust the company to deliver on its promises?
The hypothesis is that the “best” solution for each company may require different approaches to developing strategy. The following page lays out a set of questions that teams may want to consider as they deliberate on the “best” strategy for their company.