Meeting the needs of your customer is a key principle of value creation. One of the many ways to create value is to look at your core competencies. (Isn’t it interesting how that keeps showing up?) There is no single applies-every-time formula for value creation. Some of the ingredients of the consolidated value of a company include its sales, marketing, personnel, intellectual property, and good will. These and other elements are considerations in the measurement and valuation of a business. To keep value from eroding, companies have bought back shares, uncoupled mergers, jettisoned outdated facilities, and downsized personnel. Although these actions do help, they DO NOT create new business. new revenue streams or new value.
Here are some of the more important ideas we have learned about value creation:
The use of modeling tools specifically involving performance and growth and profitability will suggest many areas in which to find value-creation opportunities.
Company policies can and do impact the creation of value. Remember, a company is not just a compilation of buildings but rather a powerful force whose impact affects many people. It is a living member of the community in which it is located.