bengin The Intangible Evaluation The Service Version 2. 0 Draft, not for Distribution bengin - The Intangible Evaluation – The Service V 2. 0_e. ppt
Index • The new Business World • The bengin. com approach • The Benefit for the customers • The Mind. Set: how does it work? • Some examples from the market • More ways to use the analysis • Additional Types of analysis
Complexity of the new Business World rises and the Business Models have to reflect this intangible Value to be Mapped tangible old new Business Model T
We have developed new models for the classic and the new Business to deliver new solutions E&Y Root Oracle SAP SAS. . . Customized Solution Application Operating System Hardware Application Business Theory Mind. Ware Form & Content Soft. Ware Microsoft KPMG Pw. C AA. . B’E Systems Basics Partner a Real Economy Partner b Partner. .
We developed the original know-how, the procedures and the instruments to analyze the new Business World and to find the needed Solutions. 1. Structure 2. Quantity 3. Direction 4. Optimization
We concentrate on the evaluation of the total assets of a company, because. . „YOU CANNOT MANAGE WHAT YOU CANNOT MEASURE“! 2. Quantity The Value Vector Intangible Value The total value of a company is the sum of its Tangible and Intangible Assets. Total Value I Only by managing the Tangible and Assets (money based) the Intangible Assets (Knowledge, Skills, Market Position, etc. ) the company can achieve their goals successfully. T Tangible Value
Evaluating the Intangible, our customers can gain in various ways Large, international companies, mid-sized companies and governamental Departments and Institution: Ø To analyze their current position and development over time Ø To plan internal changes Ø To plan mergers and acquisitions Ø To plan spin offs and oursoucing Ø To evaluate the market position (benchmark) Ø To evaluate the productivity of various Business Units Ø To evaluate new projects (integration in the company assets) Ø. . . .
Evaluating the Intangible, our customers can gain in various ways Investment companies and Venture Capitals: Ø To evaluate the potential of an investment (e. g. in a start up, etc) Ø To plan the future „exit strategy“ Ø. . . . Start up companies: Ø To explain (calibrate) their own potential to an Investor Ø To show the development over time of their own potential Ø. . . .
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then. . . Example 1 (same company, 2 times): The SMV at time 1 and at time 2 are the same. The BSV 2 is though only half of the BSV 1. On the other hand the Intangible Value 2 is 30% higher the Intangible Value 1. Why? Intangible Value SMV at time 2 I 2 SMV at time 1 I 1 BSV 2 BSV 1 Tangible Value • Purchase of patents? • Introduction of a new product line? • Other? The company invested money (Tangible Value) to create the potential for the future (Intangible Value)
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then. . . Example 2 (same company, 2 times): The SMV at time 1 and at time 2 are the same. The Balance Value 3 increased by 20% compared to the Balance Value 1. On the other hand the Intangible Value 3 is less than half of the Intangible Value 1. Why? Intangible Value I 1 I 3 SMV 1 SMV 3 BSV 1 BSV 3 Tangible Value • Sale of a department? • Sale of patents? • Other? The company transformed Intangible Assets into money based value (Tangible Assets)
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then. . . If in example 1 it is NOT TRUE that. . . The company invested money (Tangible Value) to create the potential for the future (Intangible Value) e. g. Intangible Value Int. 2 Int. 1 Int. 3 • Purchase of patents? • Introduction of a new product line? SMV 2 SMV 1 SMV 3 If in example 2 it is NOT TRUE that. . . The company transformed the Intangible Assets into money based value (Tangible Assets) e. g. BSV 2 BSV 1 BSV 3 Tangible Value • Sale of a department? • Sale of patents? What happened then?
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then. . . What happened then? • Maybe the company is just loosing good people: yes, there are less costs but. . • Maybe the company is spending too much on marketing. . Intangible Value Int. 2 Int. 1 Int. 3 SMV 2 • Maybe the people are not receiving any training: yes, there are less costs but any know-how in the new technology. . . SMV 1 SMV 3 BSV 2 BSV 1 BSV 3 Tangible Value If the combination of tangible and intangible assets cannot be explained by the company`s strategy, decisions, actions. . . then we must look deeper. The causes need to be discovered in order to better manage the company
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then. . . 1. Analyze the structure and development of the Intangible Assets Intangible Value I 1 Intangible Value SMV 1 Market Position ? Know how Skills R&D I 2 MP Rights KH Organ & support Meth. & QA SMV 2 R BSV 1 Tangible Value O&S M. & QA BSV 2 Balance difference Tangible Value
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then. . . 2. Identify the changes/problems Nr Object Index „Time“ 1 „Time“ 2 1 Market Position Market share 20% 2 Market Position Marketing costs 200‘ 000 400‘ 000 3 Know-How Number of employees 200 122 4 Know-How Number of trained employees 100 85 5 Know-How R & D hours 500 300 6 Rights Number of patents (Copyrights, Design, etc) 12 12 7 O&S Use of IT infrastructure (PC and Laptops/employee) 80% 75% 8 M & QA Number of procedures/methodology 6 6 20 . . . .
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then. . . 3. Discover the reasons Nr Object Index „Time“ 1 „Time“ 2 Reasons Actions needed? 2 Market Position Marketing costs 200‘ 000 400‘ 000 Organized event to launch new products no 3 Know-How Number of employees 200 122 Reason not clear! Yes, it need to be solved! 5 Know-How R & D hours 500 300 People left – see Nr 3 Consequence of Nr 3
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then. . . 4. Prevent problems today and avoid loosing money tomorrow! Nr Object Index Reasons Actions needed? Consequences within the next 6 to 12 months 2 Market Position Marketing costs Organized event to launch new products no - 3 Know-How Number of employee Reason not clear! Yes, it need to be solved! • Decrease in R & D & production • Inability to deliver • Loss of customers • Decrease of Stock Exchange Value! 5 Know-How R & D hours People left – see Nr 3 Consequence of Nr 3 Corrected only by solving Nr 3
Considering the Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value, then. . . By analyzing only the Tangible Assets (money based) you would recognize the problems TOO LATE. The Intangible Assets of today represent the Tangible Assets of tomorrow, therefore knowing them will help you manage the total assets of the company better. In this example: Knowing the possible internal problems 6 to 12 months in advance will allow you to correct the problems before they effect the company Market Value!
A better working instrument for showing overpriced papers: Example Coca Cola Amatil. . a year before the classic Market Analysis, the Intangible Assets Analysis of BE-Solution could foresee a change by Coca Cola. . Intangible Asset Stock Exchange Value 900000 1200000 96 800000 98 600000 99 400000 Jahr 1999 Jahr 1998 Jahr 1997 Jahr 1996 Jahr 1995 Jahr 1994 Jahr 1993 Jahr 1992 Jahr 1991 0 Jahr 1990 200000 Jahr 1991 96 700000 Intangible Assets 100000 97 800000 97 Jahr 1992 600000 Jahr 1993 500000 98 400000 Jahr 1994 Jahr 1995 300000 Jahr 1996 200000 Jahr 1997 Jahr 1998 100000 99 0 0 2 E+0 4 E+0 6 E+0 9 9 9 Tangible Assets Jahr 1999
It is possible to analyze the development of the company‘s asset. Example: a part of ABB Pointer of vector five years 1'400 92 1'200 intangible axis [ i - Mio] 1'000 93 800 The answer for the question – "What happens in the year 1996? " – is easy: 95 Part of enterprise sold. It is after all a question of the quality of Management if this loss of intangible values is compensated by the price received for the sold enterprise. 94 96 600 400 200 0 0 200 400 600 800 material axis [Mio s. Fr] 1'000 1'200 1'400 1'600
![Intagible assets or Shareholder Value Expectation? Intangible Value [i - Mia] Coca -Cola 80](https://present5.com/presentation/2e3b1649851994a9fefd7f65bf5ba617/image-22.jpg "Intagible assets or Shareholder Value Expectation? Intangible Value [i - Mia] Coca -Cola 80")
Intagible assets or Shareholder Value Expectation? Intangible Value [i - Mia] Coca -Cola 80 The Tangible Value and the Intangible Value together gives a complete picture about the company value and its development. 75 70 65 60 55 IBM Microsoft 50 45 The question remain: Are all Intangible Assets or part of it is only Shareholder Value Expectation? 40 35 30 Mc. Donald's 25 Ford 20 15 10 5 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 Tangible Value [Mia]
A better model for new decisions Valuepoints of 75 enterprises 10'000 Investors: Attention! 9'000 Analyzing enterprises with the above mentioned instruments leads to fundamentally new decisions on the side of the managers as well as of the side of shareholders, which have nowadays a better/good working instrument for showing overpriced papers. 8'000 intangible Values 7'000 6'000 5'000 4'000 3'000 2'000 Management should use potential more effective 1'000 0 0 1'000 2'000 3'000 4'000 5'000 6'000 tangible Values 7'000 8'000 9'000 10'000
More ways to use the analysis: Stock Market Value (SMV) as the Total Value and Balance Sheet Value (BSV) as the Tangible Value • To evaluate and decide if it is better to „Make“ or „Buy“ • To evaluate and decide for an acquisition (Tangible and Intangible) • To evaluate productivity, e. g. the „transformation“ of Intangible into Tangible • To Benchmark • To evaluate the benefits of a merge • . . This can be done at various levels: Whole Company, Business Unit, department, process or project.
Additional types of analysis Turnover (Total value) vs. Total costs (Tangible) e. g. knowing the Total Value (Turnover) and the Tangible Value of a company (Total costs) it is possible to analyze what value is generated by the company (know how, etc. ) To analyze productivity To analyze resource allocation (intangible ROI) To analyze Value Chain profitability To evaluate a possible spin off or merge To compare the values of different departments This can be done at various levels: Whole Company, Business Unit, department, process or project.
Additional types of analysis Total costs (Total Value) vs. „Total costs minus Personal costs“ (Tangible) e. g. knowing the Total Value (Total costs) and the Tangible Value („All cost minus Personal costs“) it is possible to analyze what value is generated by the people (know how, etc. ) To analyze the productivity of employees To analyze the value of training To compare the values of different departments This can be done at various levels: Whole Company, Business Unit, department, process or project.
Contact: Peter Bretscher Ingenieurbüro für Wirtschaftsentwicklung Alpsteinstrasse 4, CH-9034 Eggersriet peter. bretscher@bengin. com ++41 (0)79 650 49 04
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