The second pillar: Sources of Value in .NET Attach barcode data matrix in .NET The second pillar: Sources of Value

The second pillar: Sources of Value using visual studio .net tomake data matrix 2d barcode on web,windows application Scan Barcodes with Mobile Phones the additional eco 2d Data Matrix barcode for .NET nomic rent. This is clearly what has happened.

The consequence is that the oil companies will not quickly move to expand oil production. Instead, there will be a build-up of energy production by other means. The lead time for this will be quite long and so high prices might well be sustained for some time.

If and when prices start to fall it is quite possible that the consuming countries governments will increase taxes on energy under the guise of the need to be green and limit energy-demand growth. So consumers may well have to face permanently higher energy prices than had been anticipated say five years ago. The oil companies will gain from this but not greatly.

The main winners will be the producing governments. The share price performance of the oil companies is consistent with this. A change to a source of value is less likely to impact on the market overall.

It is important to note, however, that sources of value are not necessarily unique advantages to one company. They are advantages that a company has over me too players. If other companies also have access to the advantage this might over time change the me too benchmark.

The greater the source of value the greater will be the incentive to act in order to realise it. If the only way to realise the advantage is to make a new investment then a large source of value can catalyse a cycle of heavy building followed by low prices which squeeze out higher cost producers, and then stabilisation at a new and lower price level. An example of this would be our recent YMCC case study.

The study uses as the me too benchmark the old technology production route. We assumed that a small number of new plants using YMCC s advantaged technology will not alter the price-setting mechanism. Suppose, however, that the gap between me too and YMCC s technology was found to be much greater.

The initial impact would be very favourable for YMCC. If, however, it followed a licensing strategy and this allowed too many new plants to be built, the old me too benchmark may become outdated. The new benchmark may become a YMCC licensed plant and this would fail to earn its CoC.

The implications of this for YMCC s existing capacity in the USA are severe and Sources of Value logic would bring this point to the fore. Getting started with Sources of Value We have now considered all of the activities which can be undertaken once a company fully accepts Sources of Value logic. It would be unrealistic to expect a big bang style implementation with everybody coming to work one day and doing things differently.

A phased roll-out is, in my view, the more suitable way to go.. The three pillars of financial analysis It should be clear .net vs 2010 ECC200 from the above that this phased roll-out should not start with a pilot test on a single project at the sanction stage. This is too late in the project life cycle to introduce a new concept, one of the key benefits of which might well be to challenge the strategy and question the very basis of the project.

The project team is likely to feel it has been unfairly picked out for challenge. If projects are to be the starting point then at least it is necessary to consider several in the first tests in order to avoid this issue. My recommendation is for Sources of Value logic first to be introduced to the strategy review process and/or the initial screening of strategic options.

The focus at this stage should not be on things like standard categories of Sources of Value and the order of calculations. It should be on the more strategic insights which can be obtained, such as, for example, the over-riding importance of avoiding being a me too player and the importance of making sure that strategies have a firm grounding in economic value. Since, in my view, strategy includes the answer to the question How organised and managed , this early work should include ensuring the company s organisational model is well aligned with its main sources of value.

Getting started will require some initial bottom-up work within the planning function but support from senior management will be necessary before much progress can be made. Sources of Value provides the bridge between strategy and finance but the strategists and the financiers will only walk the bridge and meet each other if they are helped to do so. The language which is used, and the back-of-the-envelope calculations which Sources of Value logic allow one to carry out, simply will not fly within a company where decisionmakers are unfamiliar with the approach.

So the first important hurdle is to review the technique with senior decision-makers and win their support. This will take a while and may cause some organisational pain. This could occur because unless and until Sources of Value thinking changes an important decision, it will not be considered to have had any impact.

The proposer of the decision which gets changed is quite likely to resist because he or she may appear to have been shown to be wrong . An organisation that was attuned to learning, however, would be more likely to respond positively from the outset. I would suggest telling senior managers that the Sources of Value approach does three key things.

It: helps guide where companies should look in order to find positive NPVs; allows assumptions to be calibrated such that one can focus on their overall effect rather than each individual number; encourages a building-block approach to value calculations that can be started much earlier in the process and hence companies can avoid the.
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