Leverage

Leverage refers to the ability to influence a system, person, or outcome to one's advantage, often utilizing existing resources or relationships to amplify effect. It involves using something, typically a relatively small investment or effort, to achieve a disproportionately large result. This strategic application focuses on maximizing impact and efficiency, taking advantage of opportunities and exploiting advantageous positions. In financial contexts, Leverage specifically describes the use of borrowed capital to increase potential returns (though also increasing risk). It represents the degree to which a business is financed by debt rather than equity, or a person using money borrowed, to purchase assets with the expectation that the returns will exceed the borrowing cost.

Leverage meaning with examples

• The marketing team decided to Leverage social media by creating a viral campaign that used humor, hoping to attract a wider audience and boost product sales without massive advertising budgets. They believed that the right content would spread organically. This plan was to create a massive buzz around the brand.
• As a new entrepreneur, she chose to Leverage her existing network of contacts, and secured an initial funding round by reaching out to angel investors and mentors from her university days. It was important to use the resources she had for early support to grow the business successfully and quickly.
• In negotiations, skilled diplomats Leverage information, power dynamics, and relationships to achieve favorable agreements. The Leverage they have allows them to influence the outcome, focusing on creating mutually beneficial deals.
• The company's financial strategy involved leveraging debt to acquire a competitor, believing that the combined entity would generate higher profits and market share. This use of Leverage created greater overall economic value.
• She decided to Leverage her writing skills, and offered freelance services, creating articles for various websites. This gave her freedom to set her own schedule, making more money and getting more experience.