ABSTRACT
The Lafarge example above underlines the importance of integrating all aspects of strategy, and, in particular, ensuring there is alignment between the financial position of the firm and its strategy. Financial markets, reflecting the interests of shareholders and debt holders, exert a strong influence on firm strategy. Many firms have had to divest business units in order to reduce corporate debt levels, regardless of the apparent attractiveness of the unit. No firm is isolated from financial markets, and consequently it is critical that strategic managers have a deep understanding of these markets and of the relationship between financial markets and the strategic management of the firm.
