1. Deloitte Enterprise Value MapTM
(Practical paths to increase shareholder value)
It’s easy to say shareholder value is important. Here are two simple ways to use it:
Not so easy to make it influence the decisions
that are made every day: where to spend time Start at the top. Working your way down,
and resources, how best to get things done, and, at each step ask yourself, How will we
ultimately, how to win in the competitive improve this? This will help ensure that your
marketplace.
tactics support your objectives.
This Map is designed to accelerate the
connection between actions you can take and Start at the bottom. Working your way up,
shareholder value. It is not rocket science and it at each step ask yourself, Why are we doing
is not complete, but it can jump-start the this? This will help ensure that every tactic
process of focusing on the things that matter
most and then choosing practical ways to get leads to shareholder value.
them done.
Revenue Growth Operating Margin Asset Efficiency Expectations
(after taxes)
How Value is Created
(Value Drivers)
Selling, General & Cost of Goods Sold Property, Plant & Receivables
Volume Price Realization Administrative (COGS) Income Taxes Equipment Inventory & Payables Company Strengths External Factors
(SG&A) (PP&E)
Improve
Improve Improve Improve Improve Improve Improve Improve Improve
Acquire New Customers Retain and Grow Current Leverage Income- Strengthen Pricing Customer Interaction Logistics & Service Management & Governance Improve
Customers Generating Assets Corporate/Shared Services Development & Production Provision Income Tax PP&E Inventory Receivables & Payables Execution Capabilities
Efficiency Efficiency Efficiency
Efficiency
Efficiency Efficiency Efficiency Efficiency Effectiveness
What You Can Do
(Improvement Levers: Business Processes,
Assets and Organizational Capabilities)
Procurement Accounts, Accounts,
Marketing & Product & Account Cross-Sell/ Cash/Asset Demand & Price Marketing & Customer Order IT, Telecom & Human Business Financial Product Logistics & Service Income Tax Real Estate & Equipment & Finished Work in Notes & Notes & Business Program Business Operational Partnership & Relationship Agility & Strategic
Sales Service Management Up-Sell Retention Management Supply Optimization Advertising Sales Service & Fulfillment & Networking Real Estate Resources
(Excluding Production
Management Management Development Materials Production Distribution Merchandising Delivery Management Infrastructure Systems Goods Process & Interest Interest Governance Planning Delivery Performance Excellence Collaboration Strength Flexibility Assets
Materials &
Innovation Management Support Billing Merchandise) Raw Materials Receivable Payable Management
Consolidate and/or Consolidate and/or Improve coordination Increase emphasis on
Rationalize targeted Implement integrated Increase emphasis on Strengthen corporate of operational, invest- Increase emphasis Establish a culture Increase focus on
Increase focus on Increase focus on Increase focus on Increase focus on Increase emphasis on Rationalize and/or Rationalize and/or Differentiate treatment Consolidate or Manage procurement align business align financial Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or enterprise-wide Increase focus on Increase focus on
Change What You Do high-value/high-
potential customers
Broaden product and
service offerings high-value/high-
potential customers
high-value/high-
potential customers
high-value /high-
potential customers
generating revenue
from company assets
Acquire competitors refocus product and
service portfolios
Rationalize targeted
customer segments
markets and customer
segments
refocus product and
service portfolios
of customers/
segments
applications across
organizational
Consolidate company
real estate/facilities outsource recruitment
functions
on a national/global
basis
planning,
management and
planning,
management and
refocus product and
service portfolios
refocus product
portfolio
refocus product
portfolio
refocus product
portfolio
refocus product
portfolio
refocus services
offered
permanently lowering
the company's
refocus product and
service portfolios
refocus product and
service portfolios
refocus product
portfolio
refocus product
portfolio
Refine credit/days-
receivable strategy
Refine days-
outstanding strategy
governance structures
(composition, selection,
ment, financial, M&A,
and tax strategies
program planning and
collaborative program
on continuous,
proactive perform-
centered on
operational
partnership, merger
and acquisition
stakeholder
relationships
business agility and
flexibility
Increase focus on
strategic assets
boundaries effective tax rate roles, etc.)
across business units ance management excellence opportunities
reporting functions reporting functions delivery
- What you provide Increase focus on Increase focus on Increase emphasis on Increase use of lower- Consolidate or Consolidate or Improve alignment of Consolidate and/or Increase emphasis on Refine and/or align Increase emphasis on Integrate tax oppor- Increase emphasis on Coordinate Coordinate Improve communi- Improve alignment of Establish process Establish Improve identification Establish
Increase focus on Increase focus on Increase emphasis Rationalize and/or Rationalize and/or Improve focus on Consolidate or Increase emphasis on Increase emphasis on merchandising Develop business cation between the customer, product, Establish program/ Improve effectiveness Establish agility and
- Whom you target and serve most profitable
R&D, product
innovation, and
Rationalize
customer portfolio most profitable
Increase emphasis on
customer retention
developing and
protecting intellectual on differentiated
differentiated pricing
across customer refocus product and refocus product and segments with lower cost delivery/
installation channels
Rationalize IT
application portfolio
outsource design and
development
outsource learning
and development
outsource business unit
strategies with
align financial
accounting and
modular, extensible, designing for Improve focus on
higher-value products
designing and
packaging strategies
service prevention /
Reduce need for
tunities and issues
into business planning
models with low real
Outsource business
functions
Develop low-Inventory
business models
designing for
manufacturing