Value Dynamics

busin

new economy

[email protected]

Value? What is

Agenda for Today nWill nDo

the Real Economy...

Profits Matter?

nWhat’s

© 2000 Arthur Andersen. All rights reserved.

a Business, Anyway? ValueDynamics 1

Introducing Our New Book

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 2

Will The... Real Economy Standup

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 3

Bull or Bear - $100 Invested in 1982 n$1,200

in a market basket

n$31,700 n“Real

estate is a hedge...

nAgainst nLess

in software

making money”

than $400

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 4

And It is Just the Beginning... 80 60 40

2000 2002

20 0 buyers

© 2000 Arthur Andersen. All rights reserved.

sellers ValueDynamics 5

...Both in US and Abroad! $ B in 2002 - 4

400 300 B:C B:B

200 100 0 Japan © 2000 Arthur Andersen. All rights reserved.

Europe

US ValueDynamics 6

The Rules Are Changing! nIntangibles

drive Value

nGlobalization nNew nThe

is Key

Technologies expanding

War ... is for Relationships

nVolatility

is here to stay!

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 7

How Do Businesses Create Value? 180

AOL vs Time Warner

Market Value ($ billion)

160 140 120 100 80 60 40 20

© 2000 Arthur Andersen. All rights reserved.

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1993

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0

1999

ValueDynamics 8

Business Models Determine Value 180 AOL

Simon Property

Market Value ($ billion)

160 140 120 100 80 60 40 20

© 2000 Arthur Andersen. All rights reserved.

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3/31/99

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1999

ValueDynamics 9

Yen (billions)

Business Models Determine Value 40,000

NTT

30,000 20,000 10,000

NTT Docomo Shinnittetsu

0 19 93 19 95 19 97 19 99

Softbank © 2000 Arthur Andersen. All rights reserved.

ValueDynamics 10

Do Profits Matter?

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 11

How Do YOU Calculate Value? Balance Sheet

Income Statement

Assets

Revenues Cash Flow

Liabilities

Expenses

Net Worth

Net Income

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 12

You are Your Assets, All of Them! Physical

Tangible Assets

Customer

Intangible Assets

Organization

Financial

© 2000 Arthur Andersen. All rights reserved.

Employee & Supplier

ValueDynamics 13

Business Models Drive Success New Economy Old Economy

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 14

Business Not as Usual

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 15

Leaders asking Same Questions nPeople, nWill

Increasing Return Models Dominate?

nHow nWill

People everywhere, but not a…!

will Risk be calculated & Managed?

the Sources of Capital Recalibrate?

nWhat nHow

will be the NEXT NEW, NEW thing

will Measurement & Reporting change?

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 16

How Will You Create Value? Value

D - Markets

Transformation

P - Markets Time © 2000 Arthur Andersen. All rights reserved.

ValueDynamics 17

Implications For You nWhich

New Assets?

nWhat

New Technologies?

nWhat

New Partners?

© 2000 Arthur Andersen. All rights reserved.

ValueDynamics 18

BUT, Don’t Forget all the Issues Business Model Design

Total Risk Management

Measurement & Reporting

Systems & Processes © 2000 Arthur Andersen. All rights reserved.

ValueDynamics 19

Value

Dynamics