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So let's start with the question that is probably the biggest one that management devote their time to what businesses or markets to invest in and what not to invest in. At one level, this is about what to buy and what to sell. But it's much more nuanced than that. It's often about how much to invest in business a versus business B or in market a versus market B, which markets to hold money back from and which to buy extra money into. There are three Reasons why a headquarters of a group would want to invest the shelter's money in a business. And the first is that it's a good business. It's a an exciting business. It's got high growth potential. It's a business that's making good profits. Maybe it's a business that's got strong managers. It may have some Important sources of advantage over its competitors. So it's just a good place to make money you're likely to get high returns on the money you invest. And that's kind of the business logic reason for investing. But there are two other reasons for investing. And the second is because we the managers At the corporate group level, know how to add value to this business. So we know how to improve it or we know how to create synergies between this business and some other businesses that we have. And this is a reason for us to invest or to want to earn this business. Even if it isn't necessarily a good business, because we can add value to it. And the third is more of a sort of investment strategy logic, which is because it's cheap, we think we can buy it for less than it's worth, or we can invest in it for less than the value of the assets that we're going to get as a result of making the investment.

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Making a good investment: a good business matrix analysis of E.ON

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