The influence of competitive strategy oncapital investment decisions

Various authors have scrutinised the sole utilisation of quantifiable (financial)appraisal criteria in capital investment appraisal. They argue that the appraisal ofcapital investment proposals must concentrate on the capital investment processas a whole and not only on the selection phase. These authors suggest thatcapital investment opportunities and proposals must be sought within theparameters set by strategy.Therefore, the purpose of this study was to explore and to describe howdecision-makers in the platinum industry experience the influence of competitivestrategy on the capital investment process. Semi-structured interviews were heldwith strategic capital investment decision-makers within a major role player in theplatinum industry. Respondents were selected according to the snowballsampling method.An analysis of the results indicates that competitive strategy does influence thecapital investment process. This influence is particularly observable with regardto the initiation of capital investment ideas, the capital budget allocation and thestrategic appraisal criteria utilised by decision-makers to screen capitalinvestment proposals.The strategic capital investment process constitutes much more than just theselection of capital investment proposals. Therefore, the findings of this studysignify the importance of considering the influence of competitive strategy on thecapital investment process.