strategy-2017

We make owners and management visualize

the potential with our approach

STRATEGY

It’s about the approach

We make owners and management visualize

the potential with our approachMichael Porter, a strategy expert and

professor at Harvard Business School,

defines strategy to be;

How an organization communicates it’s

unique position,

How an organization’s resources, skills,

and competencies should be combined

to create competitive advantage.

The definition of strategy

STRATEGY Copyright © 2017 Beide Forvaltning A/S

Strategic Planning


The Strategic PlanHow elements are combined to build a

competitive advantage. The overall disposition

contains prioritized descriptions of main

elements.

In arguing for the various

strategic alternative focus should

be placed on;

I. Structural difference in

product offering.

II. Market peneration

implications (criteria).

III. Variations in financials of

strategic alternatives.

The overall goal of the plan is to ensure that the reader understand how the

unique elements combine to form the overall strategy. By conducting interviews,

studies, research and questionaires a structured disposition is created of elements to

bring in to the overall description of how the company in question will create a

recurring and sustainable business model.

Lean Business Planner


Digital tool to organize your ideas and

build the business case.Lean business planner allows you to identify, organize, test and

support your ideas in a dynamic environment to build the case.

As opposed to traditional design of business plans the dynamic

features of Lean Business Planner will enable you to work with many

ideas simultaneously to identify what is unique, what segments your

idea is intended for and how to support your idea by defining a test

plan, list of resources and determine financial criteria to be met.

Dynamic approach versus traditional

approach.

The dynamic approach should be

viewed as complimentary to the

traditional design approach using

dispositions and documents. By first

testing out your ideas dynamically –

details, recommendations and

descriptions can later be transferred

to strategic documents.

Strategic plans


Vision /goal setting

Secure goalDefine a goal that you feel for sure you will reach by acting

the way you are accustomed too.

Realistic goalDefine a goal that you will be very glad to accomplish. This

goal level demands that you break out of some routines, put

In an extra gear and work actively to accomplish objective(s).

Barrier breaking goal

Define a goal level that really breaks with some of your

routines for you on a personal level.

Vision, goals and structured milestone(s) Requires a clear understanding of what realistic

S.M.A.R.T activities to pursue.

Specific : Are your goals specific enough.

Measurable : Are the goals measurable.

Applicable : Have the goals been assigned

Realistic : Are the goals realistic given resources

Timetable : Has a timetable been defined.

The assesment scoring model is

designed to rate capabilities based on

a set number of questions and

assessments to rate where the

organisation stands as a whole. The

model can be configured to set

weights to the categories to be

included in the overall assessment of

readiness and maturity in relationship

to comparable companies.

H i g h e st n u m b e r i s b e s t

Key drivers for successPoints

Company 1

Points

Company 2

Points

Company 3

Points

Company 4

Weighted

Point Score

1. Strategic Makeover 232 212 199 192 209

2. Technology (how it is described) 179 167 169 153 167

3. Lobbying / Networking 96 86 75 78 84

4. Financial 102 98 126 113 110

5. Visual and branding identity 36 36 39 43 39

6. Advanced 48 48 48 48 48

7. Digital / Artifical Intelligence 48 48 48 48 48

Total Scores 740 694 704 673 703

RANK Aggregate Scores 1 4 2 5 3

Specify Makeover Criteria(max 10):

Weight%

1. Strategy 25%

2. Technology 20%

3. Lobbying / Networking 10%

4. Financial 15%

5. Visual 10%

6. Advanced 10%

7. Digital / Artifical Intelligence 10%

Sum: 100%

Point scoring model to rate

capabilities within categories for

start-up companies.

Assessment of capabilities, where a company

stands requires a scoring method to assess

status, plan activities and set up a structured

improvement program for the next 3 and 12

months.

Assessment scoring model


The model will score points based on a

set number of questions within each

category whereas a scaling system i used

(1-10) that rates the company relative to

other companies, industry etc. The point

scoring system can be used to rate a set

number of companies against each other.

Innovative new methods integrated with accounting data to build

financial statement(s).

Multiple valuation methodologies and core contingencies to

portray financial summaries (consolidated and by BUs).

Ability to build strategic efficient frontier views by applying the

following;

Build alternative strategic scenarios.

Hedging methodologies - many type of hedging instruments.

Fair Value / Cash flow hedging assumptions.

Pricing formulas.

Definition valuation benchmarks (over value / under value).

Construct your own or utilize standard benchmarks.

Integration with «market / transaction platforms» .

SBV - Explains financials associated

with a business case or business

valuation in a simple manner.

We make valuing and communicating a business case or

business simple by applying asset, income and market

based methodologies.

Strategic business valuations (SBV)


Net

Pre

sen

tVa

lue

(NP

V /

IRR

)

Portfolio Risk

Efficient Frontier

Investment alternatives / hedging strategies

Figure 1.0 Describes how the composition of

earnings portrayed through net present value

(NPV) and internal rate of return (IRR) would

look differently based on the earnings risk

associated with each earnings composition

(investment alternative),

Figure 1.0. Efficient frontier views – Composition of earnings.

Utilizes the efficient frontier view – CAPM (Capital Asset Pricing Model)

Gives a consisting framework where valuation methodologies, investment composition as well as hedging and

pricing methods can be varied utilizing asset, income and market based methods.

Efficient frontier


High EPS targetLow EPS target

High Earnings Band

Low Earnings Band

BU # 2

BU # 1

BU # 3

BU # 4

Figure 2.0 Strategic placement of BU – EPS band (stochastic confidence 95%)

Strategic view that describes earnings volatility and expected earnings per share Target that varies by business unit, valuation principles and varying investment alternatives gives insight into overall

earnings expectancy.

Figure 2.0 describes how expected financials can be

communicated utilizing SBV in a strategic view based

on an expected earnings band with an expected

earnings per share target.

Earnings band is in this context referred to as a measure

of expected variability in earnings while EPS target is

referred to the absolute earning per share.

Strategic view - Implications


Variation of quantifications How the SBV behaves under various valuation

methodologies and investment compositions.

Requires a consistent framework whereas

measurements are view in a consistent manner.

Portfolio Risk (EPS) at 95% confidence

ALT - 3ALT- 1

ALT- 2

ALT - 4

ALT-1 ALT-2 ALT-3 ALT-4

EPS -0,05 -0,03 -0,05 -0,01

EaR -0,10 -0,08 +0,02 -0,12

VaR -0,12 -0,12 0,00 -0,12

CVaR 1 M 1,2M 1,3M 1,4M

Figure 3.0 Variations of financials by principles, investment case)

Figure 3.0 depicts how a consistent view

for valuation measurements will enable

the user to address earnings per share

impact utilizing standardized

measurement of expected variability.

Op

era

tio

nalE

arn

ing

s(E

PS

)

FIGURE Incremental Portfolio changes – 95% confidence

Measurement framework


In addressing the standardized

measurement framework, the

alternative methodologies for

valuation as well as composition of

earnings mix (investment

alternatives, hedging compositions)

can be viewed consistently.

Varying valuation principles,

investment cases increases

confidence in the financial outlook

Enhances the ability to perform risk adjusted reviews

assessing the forward outlook and gives insight into

what benchmark and relative benchmarks to choose.

Utility S&P

Industry S&P

BU Total

Business Unit

Return

Sharp

Figure 4.0 Risk adjusted performance BU Unit against S&P 500 (stochastic confidence 95%)’

Per Business Unit Return Deviance from Index Sharpe Ratio Sortino Ratio

Last Calendar Year 4,5% 0,1% 0,262 0,015

Last 3 calendar years 6,7% 1,2 % 0,252 0,058

Last 5 calendar years 8,0% 0,4% 0,376 -0,009

0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 %

Figure 4.0 depicts how return and risk information for a particular

business unit can be used to compare returns and risk adjusted

metrics for selected benchmarks.

Benchmarks can also be built by evaluating / assessing earnings

characteristics for the consolidated earnings view utilizing the SBV

strategic view utilizing the various valuation principles and

investment cases.

Tactical implicationsCopyright © 2017 Beide Forvaltning A/SSTRATEGY

Table 4.1.2 Capital Allocation Matrix / Tactical allocations - BU Units (stochastic confidence 95%)

Product & Prices – Strategy

TCopyright © 2017 Beide Forvaltning A/S

Product Description Prices

Strategic planDesign of a strategic plan focusing on

utilizing lean business planner and

addressing an outline tailored to the

industry and offering in question

containing plan categories and content

of the highest quality.

Fixed price of NOK 100,000

to arrive at a investor ready

strategic plan – up to 150

hours. Each hour priced at

$150 thereafter.

Scoring modelDesign of a scoring model with design

of weight categories for the scoring

purpose in question (rank external

porfolio managers, evaluate RFP, score

start-up, venture copmany capabilities)

including all qualitative and

quantitative questions to be addressed

in arriving at an overall comparable

scoring.

Fixed price of NOK 50,000 to

arrive at a investor ready

strategic plan – up to 75

hours. Each hour priced at

$150 thereafter.

STRATEGY

When building the strategic approach, the analytical mindset require depth and precision to arrive at a unique

offering, a recurring business model and realistic goal setting.

strategy-2017

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