Cracking the Value Code
Cracking the Value Code
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DescriptionBased on a three year study of 10,000 companies worldwide by Arthur Andersen,
'Cracking the value code' presents revolutionary new findings that redefine how
companies create wealth in the New Economy. Investigating the forces behind
the New Economy and the reasons for success stories like Scharles Schwab, the
Gap and Dell, versus slower-growth Industrial AGge gaints, the authors set out
to crack the code for seeing, investing in, and managing "what really matters"
to gain unprecedented results. In the process, they propose a fundamentally
new view on corporate strategy based on assets - tangible and intangible - as
the building blocks of value. Using their new "Value Dynamics Framework", the
authors show how companies can decipher the strategic patterns of future wealth
creation and recommend how to design business models that promote corporate
The New Economy is more than hype and high-flying stocks. Organisations are
creating value in totally different ways, using assets and combinations of
assets heretofore unrecognised. Microsoft has built a $450 billion market
value, more than the combined total of nine giant American corporations;
upstarts like eTrade threaten major brokerage firms and Amazon.com has the
potential to become the first true world retailer. This book looks at how
successful businesses are creating value in the new economy. Based on
extensive research, this book argues that too many firms are looking for value
realisation - that is, value captured in the form of earnings or cash flows.
Value realisation is what underlies both the traditional accounting model and
most of today's management information systems (including EVA). In 'Cracking
the value code', the authors argue that, whilst important, value must first be
created before it can be realised. This book puts value creation - and the new
strategies, processes, measures, and decision-making information needed to
accomplish it - at centre stage.
Based on a new theory called Value Dynamics, the authors articulate four rules
of the New Economy and go on to explain how companies should focus on how all
the assets within their investment portfolio interact, combining and
recombining in infinite ways to create value. The key to a company's success
is in discovering its 'economic DNA'.
Endorsed by Arthur Andersen as crucial to winning in the New Economy, 'Cracking
the value code' offers a complete guide for companies in every industry.
How are businesses creating value in the New Economy?
Business are their assets - all their assets?
Businesses create value with different business models/
Part Two: Invest in what matters.
Who is creating value with physical assets?
Who is creating value with financial assets?
Who is creating value with employee and supplier assets?
Who is creating value with customer assets?
Who is creating value with organization assets?
Part Three: Manage what matters
Putting it all together
Design your business model for value creation
Manage your asset portfolio
Use information to create value
Sources and suggested reading.