The Value Of An Owner Managed Business

The competing value framework is based on an integrated model for management. The dynamic model leverages an interwoven approach of four distinct management techniques

By conducting a value chain analysis for Walt Disney Company, I will be able to accurately show the “parts of its operations that create value, and those that don’t” (Hitt, Ireland, and Hoskisson, 87). The value chain is segmented into two categories: support functions and value chain activities. Support functions include finance, human resources, and management information systems which “support the work being done to produce, sell, distribute, and service the products [Walt Disney] is creating” (Hitt, Ireland, and Hoskisson, 87). Value chain activities include supply chain management, operations, distribution, marketing, and follow-up services, which Walt Disney

The report will seek to identify Accuflow enterprise value from the viewpoints of the different parties and with different valuation techniques in order to come to the conclusion.

Several internal factors can influence the valuation of a company, however, in the subsequent are some factors that will assist management in protecting its shareholders. The first reason is the desire to generate profits for the company, as a profitable firm will attract investors. Secondly, the need to improve the management of a company can lead to valuation as the information can be used to spur growth. Valuation will assist in understanding some of the factors affecting the value of the company such as client relationships, financials, image, technology employees, and marketing. Proper management is implemented after identifying the issues affecting the organization’s value. Thirdly, communicating to the public accurate and current information is essential in attracting investors and maintaining transparency, which builds the company image.

It is important to know the proper technique and method of valuing a company because different people may have different ways of assessing the value; it is also important in understanding the bank’s method of appraising and valuing a company or business

Third-party evaluationsWhat is typically done is to hire an independent firm (a third party), well-qualified to evaluate such matters, to calculate a "fair price", which is then voted on by the minority shareholders.

Value creation means increase the value of products, service and even business to meet the customers’ needs and requirements so that they can get competitive advantages. (Business Fundas, 2012) As we analyzed, fast food industry’s threat of new entrants is low and the availability of substitutes is high. It’s a fare market which the buyers have strong powers.

Porter, M.E., Hills, G., Pfitzer,M., Patscheke, S., Hawkins,E. 2012. Measuring Shared Value: How to Unlock Value by Link

If markets were liquid and transparent for all assets and liabilities, fair value accounting clearly would be reliable information useful in the decision making process. However, because many assets and liabilities do not have an active market, the inputs and methods for estimating their fair value are more subjective and, therefore, the valuations less reliable. Management bias, whether intentional or unintentional,

There have been many debates in previous decades amongst the investors, users of the financial statements, on whether fair value accounting is worth being used. According to IFRS 13, fair value is “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”. Usage of fair value has advantages, however, it has disadvantages as well. This essay will discuss how fair value is more advantageous than disadvantageous and how it is carried out. It will also examine how fair value led Lehman Brothers, an American investment bank, into bankruptcy during the global financial crisis and why the trend of fair value has emerged in the recent decades.

A point that was prominent from beginning of the course, was the importance of value based management. One of the common misconceptions about business leaders is that their sole concern is for money. While for many, ensuring profit is a high priority, it is beneficial to note that other aspects come into play when decisions are made. In addition to profit, successful companies often dedicate themselves to a specific set of core values. These values highlight what a company believes, what they find important, and how they define success. Ed Freeman said, “companies should seek to align interests of all primary stakeholders.” Based on this it is clear that business decisions should not only consider only should the owners and employees, but also the customers, shareholders, and surrounding community. Furthermore, the definition of an effective business leader does not necessarily only involve positive numbers. Along with this, success for one company

Our three strategic objectives are the following: 1.We guarantee our shareholders value according to the way that we plan to differentiate ourselves so as to best compete. The Internet retailing business is cluttered with a large number of retailers, some of which are exclusive online (Amazon, Tiger Direct, etc.) and many of which are primarily offline businesses that happen to have an online presence. We intend to market luxury goods online: most online retailers seem to ignore this market. (2) Whilst many of our competitors are focused on leveraging the Internet for a high-volume, low-margin model we intend to do primarily the opposite. (3) As astute and conscientious business professionals, we intend to prudently and meticulously establish, carry though, and monitor our business plans and goals constantly communicating our intentions with our shareholders and involving them in all our projects and endeavors. A metric that I would use for assessing shareholder value would be Economic Value Added (EVA) metric. EVA endeavors to assess shareholder value by calculating the amount by which profits exceed the cost of capital (Investopedia). My goal here is to increase market share by 2% for each of the next 3 years" of an increase of 2% per year for 3 years

“The VBM framework extends these ideas to highlight the identification of the firm’s financial and non-financial value drivers, and the feedback loop from performance to the subsequent reassessment of objectives, strategies, and organizational design and control.” (Ittner, C. D. and D. F. Larcker, 2001). Value-based management is a kind of corporate governance principle and management approach that ensures corporations are managed consistently on long-term shareholder value creation. In normally, it can maximize shareholder value.

Businesses are established with the sole reason to provide a product or service to a customer with the intend to make a profit. The amount of time, effort, and resources spend should generate a profit. Then, the profit depends “on its effectiveness in performing these activities efficiently, so that the amount that the customer is willing to pay of the products exceeds the cost of the activities in the value chain” (NetMBA.com).

Value creation is a very crucial concept in business. Entrepreneurs are continuously putting a lot of effort to create sustainable value. Business is all about creating sustainable value. Different subjects: marketing management, operation management, finance and economics aim at creating value in their respective domain. These subjects look at value from their own school of thought but more or less when it is to be quantified for decision making, we talk about net present value. Few ways to define value are as below [22-24]