This article analyzes multifactor models in the presence of a large number of potential observable risk factors and unobservable common and group-specific factors. We show how relevant observable factors can be found from a large given set and how to determine the number of common and group-specific unobservable factors. The method allows consistent estimation of the beta coefficients in the p…

This text provides constructive guidelines to readers to open their minds to the challenges of creating value. This second edition updates the reasons for the choice of the individual offering as the strategy unit, and extends the challenges to standard approaches and conventional thinking.