A capital allocation strategy is a critical framework for businesses to prioritize and distribute financial resources in a way that maximizes value and supports long-term growth. It involves evaluating different investment opportunities, such as expanding operations, acquiring assets, or returning capital to shareholders, and determining where to allocate funds for the highest potential return. A well-defined capital allocation strategy balances risk and reward, aligning with the company’s strategic objectives and financial goals. By strategically directing capital towards high-impact initiatives, businesses can enhance profitability, optimize resource use, and ensure sustainable growth, while avoiding over-committing to low-value or risky ventures