We collaborate to evaluate past, current and future growth and return economics by business unit and in many cases the best insights come when we dig deeper to evaluate the opportunities by product line, by customer or by geography.
We advise on changes to the allocation of CapEx, R&D and marketing/sales expenditures and forecast how much reinvestment is required to meet a company’s growth objectives.
By reallocating resources from low value to high value activities, our clients achieve more profit and cash flow, improved growth, higher returns and more RCE. This also increases the quantum of future investable cash flow which adds option value to the enterprise.
Collectively, these benefits can drive meaningfully higher TSR (total shareholder return includes dividends and share price appreciation)
Where Do We Create Value?
Evaluate past, current and future growth and return economics:
- By Business Unit
- By Product Line
- By Customer
- By Geography
Is Resource Allocation Aligned with Value?
Resources to be reviewed may include:
Conceptually, it’s not complicated. Invest more in things that create value and less in things that don’t just like an owner would.
The challenge is to discover where the opportunity exists. This requires using measures that provide the proper signals and methods that offer the clearest prioritization.
What is the Value Potential of Improved Strategic Resource Allocation?
Reallocating resources from low value to high value activities:
- More profit and cash flow
- Improves growth, returns and economic profit
- Increases future investable cash flow (option value)
- Increases the stock price