"What exists today is temporal, what will exist tomorrow is the key oppotunity or challenge"
"Value Creation" is the design and execution of a company's next-level development based on the optimal opportunity to increase sustainable earnings and the value of a company. Value Creation activities are usually formalized within large companies, and very important objectives of senior management teams.
The content of any proposition is highly customized, and dependent on such factors as a company's industry dynamics, market position, synergy profile, etc. As such, a one-size-fits-all template does not exist, but all activities are engineered to achieve the same goal, the creation of value through quality earnings growth.
Programs are founded on classic and proven growth propositions and structures, and all involve some form of synergy. Some of these pertain to horizontally integrating (providing greater value), vertically integrating (realizing cost efficiencies) or pursuing a market share initiative (achieving greater forms of leverage).
The execution of a Program will usually, but not always, entail: 1) strategic analysis and a Strategic Agenda, encompassing new strategic architecture, a priority hierarchy and timelines, 2) the acquisition of a synergistic company(ies), and possibly, 3) the simultaneous or intermittent raising of many different forms of capital.
If the answer is "yes" to any of the following questions, consideration toward further investigating Value Creation activities, or a Program for your company is warranted.
• Should your company establish and maintain a formalized strategic agenda as one of its best practices?
• Does interest exist in continuing to build the company and proactively increase company value?
• Has the acquisition of another company ever been considered, or a theoretical target been identified?
• Has the raising of investment capital for a special project or growth opportunity ever been considered?
• Should your company understand and evaluate its "strategic opportunity cost" as another best practice?
The successful engagement of Value Creation activities requires specialized expertise, experience and databases, and ultimately the utlization of strategic engineering and investment banking capabilities. Some of the essential competencies are outlined below, and these are segmented between the elements of strategic engineering "Art" (design & development), and investment banking "Science" (deployment & execution).