Game Theory In The Costs of Financial Distress

Game Theory In The Costs of Financial Distress Companies generate maximum shareholder value for their investors when their investment, financing, and dividend policies are optimal. In this article, i discuss the financing strategies which determine the firm’s optimal capital structure. As interest expenses on debt are tax-deductible, cash flows to equity increase when firms finance

Valuing Growth Companies using Discounted Cash Flow Model

Valuing growth companies using discounted cash flow model is challenging due to its lack of historical financials, low to negative operating margins, and potential to survive. In this post, I provide my insights on valuing a growth company and the challenges when valuing them by taking Zomato as an example.

Why Porter’s Competitive Strategy is more relevant now than ever?

One of the biggest and most consequential business questions is why some companies are more profitable than others? When i look at successful companies globally, they have a clear strategy of choosing what not to do. In this post, i share my insights on why Porter’s competitive strategy is more relevant now than ever. Porter’s framework helps you recognize a good plan and understand the distinction between a solid design and the latest management trend.

How To Use The Business Plan As A Communication Document

Some companies view M&A as a business growth strategy. In my opinion, M&A is not a business strategy but rather a means of implementing a business strategy. While firms may accelerate overall growth in the short run through acquisition, the higher growth rate often is not sustainable without a business plan—which serves as a road map for identifying additional acquisitions to fuel future growth. Here, i share my insights on how to use the business plan as a communication document.

The Disconnect Between The Stock Market and the Current Economy

Despite the slowdown in the economy, the global stock markets have risen and show no slowdown. This article provides insights into the disconnect between the stock market and the current economy.

Link Between The Right Growth Strategy and Value Creation

To maximize value for their stockholders, firms should know what drives growth and how it generates value. For large organizations, the growth of the markets in which they serve mainly drives long-term revenue growth. Although gains in market share add to revenues in the short term, these gains are far less critical for long-term growth.

Importance of ROIC in Business Valuations

The valuation of a business depends on growth and returns on invested capital. ROIC gets driven by competitive advantages that allow companies to accomplish price premiums, cost, capital efficiencies.

Why Valuing Value is Critical Today

The blend of growth and return on invested capital (ROIC), corresponding to its cost, drive cash flow, and value. Anything that doesn’t improve ROIC or growth at an attractive ROIC doesn’t generate value. This section can include actions that alter the ownership of claims to cash flows and accounting methods that may vary the profits’ timing without really increasing cash flows. 

Why Portfolio Transformation Is the Need of the hour for Firms

Leading companies relentlessly run their business portfolios, continually advancing into new opportunities for value creation and regularly divesting business units. As competition intensifies, lingering in static position leads, nearly axiomatically, to slipping behind.

A Paradigm Shift in Business Models Post-COVID-19

The disconnect in industries and business models that we assumed intellectually before the COVID-19 crisis has grown into giant fissures; thus, it has further exacerbated the gap between winners and losers of the power curve of economic profit. We have seen a paradigm shift in business models post-COVID-19.

Competitor Strategy Metrics That Matter in the Post-COVID-19 Era

Competitor Strategy Metrics That Matter in the Post-COVID-19 Era In the current crisis, the success of a company’s strategy usually depends significantly on its competitors’ policies. For instance, Boeing’s commercial jet’s terminal success will depend on the way Airbus positions, markets, and sells its novel and competing A380 and A350. This strategic interdependence indicates that

Importance of Innovation in Post-COVID19 Era

The COVID-19 pandemic has upended almost every aspect of life, from the private (how people survive and operate) to the professional (how businesses communicate with their customers, how consumers prefer and obtain services, how supply chains deliver them). Most firms wholeheartedly believe that they will revert to innovation-related initiatives once the business has stabilized, the core business is stable. In this article, I focus on the importance of innovation in the post-covid19 era and how companies should focus on innovation initiatives to improve their market share.

How post-COVID19 world will be different

As management teams look to restart operations, one fact is amply apparent: We cannot afford to go back to the traditional way of doing things. To be successful, firms need to position themselves for a world of continued turbulence and constant shocks to the system, where adaptation and resilience will generate the most significant value. In this post, I will discuss how the post-COVID19 world will be different.

Covid-19 impact on Private Equity firms and its portfolio companies

The COVID-19 outbreak poses multiple complex issues for each industry, company across the global economy. What presents the private equity trial uniquely complex is the extent of risks given by a complex portfolio of companies traversing diverse industries and geographies. Generalized playbooks don’t supplement much value at a time when a global crisis hits each portfolio company uniquely. What’s crucial is generating a reasonable method to estimate risk, prioritize action, and effect quickly.

Why would Intelligent Automation be the future

Intelligent Automation – Overview Companies are optimistic about the prospects of humans and bots working together. Hence they are welcoming intelligent automation into the workplace.It is assumed robots and humans will bring their own unique strengths in this collaboration. This collaboration will result in improved productivity and better customer experiences. AI has already gained a

Is the role of strategy dying in tech

Role of strategy in Tech companies There is a view that traditional strategy development processes do not have a role in fast moving technology sector.Many view that the role of strategy is dying in technology companies. Many leaders believe that 3-5 year strategy goals have lost its relevance. This is because most of these goals

How Marketing can help Tech companies grow?

4 Ps of the Marketing Mix Marketing can help tech companies grow. We have all heard of the 4 Ps of the Marketing Mix. They are Product, Price, Place and Promotion. All the 4 Ps are important for the marketing strategy to be successful. When we look at Technology companies, Product is usually owned by

What would be the right business model for Digital companies

Digital is Disruptive The new digital era has brought disruption but at the same time an opportunity for companies with a cogent strategy. The digital age will leave behind those who fail to adapt quickly. In this age, speed matters. As Digitization is gaining steam, new business models will emerge that will reshape customer behavior

Why is Digital healthcare going to be the next big thing?

Digital Healthcare Overview Healthcare is an enormous industry but at the same inefficient too.Across the globe, growing markets and increasing demand for better healthcare makes digital healthcare the next big market for leading tech companies to exploit. In the US, investors funded around $11 billion in digital health startups this year with most of the

The bitter truth about Dating Apps

Do Dating apps really want people to find love? We are living in a dating world.Prospective men and women are looking for relationships through the dating apps.Hence Dating apps are often blamed for the death of the romance. Dating apps like Tinder is usually considered as someone right swiping the photos of nearby singles to

How to accelerate Strategic Transformation?

Why Strategic Transformation is important? As companies mature, growth slows even more, eventually flattening out.Yet we see operational expenses climbing as companies strive to compete with new players in the market. Finally unable to keep up with bloated budgets, companies spiral into negative growth, marked by layoffs, high burn rates and eventual bankruptcy. The key

How Platforms economy is reshaping the Global trade?

Moving towards platforms economy It is not only the companies that are moving towards platforms. More countries are shifting towards the platform economy. The global trade, faced with two conflicting forces. On one side, there is a wave of protectionism mostly exemplified by moves like Brexit and US withdrawal from the Trans-Pacific Partnership, which is

Why is startup needs to focus on unit economics

Startups needs to focus on unit economics Startups needs to focus on unit economics as many startups like to position themselves as tech companies even when their core business lies in other sector.Uber, Beyond Meat, Tesla and WeWork are examples. This is because Tech is sexy now and opens the door to larger pool of

How to win technology deals in changing Digital landscape?

Digital landscape has changed It is evident that digital landscape has changed and some tech companies have managed to grow much faster than others.Tech leaders like Google and Amazon have not just dominated the existing markets but have been successful in creating new markets.These companies have leveraged M&A as an approach to acquire targets that

The Netflix effect – How to achieve success in the Subscription economy?

Rise of Subscription economy Businesses are moving away from buying/selling products towards subscription economy. Market leaders from Salesforce to Amazon to Netflix completely changed how companies deliver services to customers.They also reinvented the Customer Relationship Management.Their obsession towards customer centricity not only improved the customer service but also provided a massive revenue opportunity that can

Rise of ecosystems

Rise of Ecosystems An ecosystem is born when people start operating beyond their traditional operational borders, thereby creating or participating in new, flexible and adaptive networks. The ecosystems can be a part of one organization or cross the boundaries of that organization.Companies cease to exists as entities but are a part of overlapping ecosystems. Companies

Reinventing Business Models Vs. Changing Strategy

Elements of Business Models and Value Creation In my earlier post, I had described about the elements of the business models and the value added to the customer.The link to the blog is here. The elements of the business model would include what services does a business offer to address customers pain point, cost structure

Network effects and age of ecosystems

Network effects in ecosystems Companies who are leaders in their respective industries leverage network effects to their advantage.In simple terms, Network effects refer to the increased value a firm captures when it has more users or customers than other firms. Platform companies leverage Network effects as a strategy to generate profits by combining different sides

How leaders achieve successful Business Transformation?

Factors behind Successful Business Transformation Companies that are able to achieve high success rates in their business transformation initiatives often create KPIs that are measurable which is then tracked to quantify the benefits achieved. The famous management guru Peter Drucker once observed that “What gets measured gets managed”. Companies that do not have any measurement

Elements of Business Models and Value Creation

The Value Potential of Business Models Companies come up with new and innovative business models to uniquely differentiate itself against its competitors. A Business model basically describes how the value is created, although a business model by itself does not determine the profitability.In order to determine the profitability, one needs to examine the complete strategy

Why transformative change is needed for cutting edge innovation?

Effects of Transformative Change Transformative change often requires the organizations to rethink the way they envision the future.Innovations that are able to provide incremental growth in revenues and market share are vital to the long term success of the organizations.At the same time, to sustain the business in the longer term requires transformational thinking. Transformative

Revisiting Tech IPO of 2019

How Tech IPO performed in 2019 In 2019, many high profile tech unicorns decided to go public through tech IPO.Many of these tech unicorns were already valued very highly by their VC investors and hoped to get a IPO valuation at the same or above their recent rounds of valuation. The tech IPO’s caused higher

The power of Business ecosystems and their challenges

Rise of Business ecosystems Business ecosystems have become extremely popular – Thanks to the success of companies like Apple, Google, Facebook and Amazon. Every company wants to build it’s own ecosystems to gain revenues.As companies look to establish their ecosystems, there are some confusions and commonly held beliefs on how to build ecosystems which unfortunately

How the Global economic slowdown will be different this time

Signals of an Economic slowdown are visible There are many indications for the world moving towards a protracted economic slowdown. Some analysts have even gone to an extent that we are already in the early stages of a slowdown. Whenever there is an uncertainty, we look at the historical trends and then try to identify

Why Digital Transformation strategy should be holistic rather piecemeal?

Current Digital Transformation Strategy Companies have started to focus on running Digital transformation strategy programs in order to improve their competitiveness and market share. For a long time, most of these transformation programs – be it Digital or Business have focused on productivity improvements – This means taking a better, faster and cheaper approach to

What will be the Digital Technologies to watch out in the future?

Emerging Digital Technologies in the last 2 years Over the last two years, there have been an explosion of emerging digital technologies like Augmented reality, Blockchain, Quantum computing, virtual reality, 3D printing and mixed reality. A lot of hype was created around these technologies and some of them were even projected as the technology for

The future of work place

Future of work place – What the emerging workforce cares about? A big topic that is discussed in all the business meetings is on the future of work place. The millennials and young workforce that are joining the job market cares deeply about the values of their business leaders. They look upto their leaders and

What are the chances for a global recession in 2020?

Global recession The global economy is slowing down and analysts all over the world are anxious whether this slowdown will topple over to a global recession. In the past week, the US China trade war seemed to move towards a positive direction when both countries struck a partial trade agreement.Further there are high chances of

How to predict the next tech disruption in 2019?

Importance of predicting emerging next tech disruption Companies need to track emerging technologies and innovation that can reshape an entire industry to predict the next tech disruption. It is essential to anticipate important innovations ahead of the competition as it can significantly increase growth and shareholder value. Hence for companies the ability to predict if

Value innovation vs Tech innovation

Value Innovation is core to opening new markets As the entire world is reeling under the fear of a global economic slowdown companies are looking at value innovation to entering into new business services. Let us look at major challenges companies are facing globally. The immediate challenges are stiff competition, shrinking demand and lower margins.This

How can Legacy companies build a new Digital business

Building new digital business We read through the newspapers daily the long list of legacy companies being disrupted by fast moving new digital business. Many legacy companies in order to withstand disruption are digitizing their legacy businesses and creating new enterprises. Successful companies divide their capital evenly between transforming their core businesses and building new

How Blockchain can be a tool for future collaboration

Blockchain is not cryptocurrency Blockchain has been in the news frequently for quite a long time. Yet we have still not been able to capture the real essence of what the technology can provide. The unique strength of the distributed database is in authenticating information in order to enable trust between the partners. We often

Why growth is most important during Business Transformation

Growth in Business transformation Growth is critical in business transformation. In the current market environment, companies that grow their top line while at the same time expand their margins are successful. These companies are the market leaders in their respective industries. It is challenging to grow the topline and expand the bottom line at the

Why Disruptors have keen Strategic Foresight and Innovation Thinking

Importance of Strategic foresight In this digitally disruptive and competitive business environment, we often see some companies with keen strategic foresight anticipating and responding to a disruption far earlier than other companies. This begets a question – Why some companies are able anticipate to respond to disruption far earlier than other companies? A big challenge

Performance drives Valuations and not Industry labels

Performance drives business valuations We often hear that companies can drive higher valuations by positioning themselves as technology company even though they might be operating in other sector.For instance Uber – A transportation company was able to command a higher valuation multiple by positioning itself as a technology company.The same extends to other companies like

What recent deal failures like Kraft-Heinz, Valeant pharma, and WeWork have in common?

Recent deal failures of Kraft-Heinz, Valent pharma and WeWork Recent failures in deals like Kraft-Heinz, Valent pharma and IPO failure of WeWork exhibit a common trend. The deal makers of these transactions – 3G capital and Softbank have inspired fear and envy in the M&A world during the last decade. In this blog, we will

Welcome to the Streaming wars – The new battle front

Streaming wars overview Hold on to your breath.The streaming wars have just started and we are going to see a paradigm shift in the way leading giants are planning their strategic moves to consolidate their positions as a market leader. The four leading players – Amazon, Apple, Disney and Netflix have done a series of

Rise of Super Apps – Are they the future?

Introduction Over the past few months, the world has seen a rise of Super Apps especially from emerging markets like China and India.These super apps provide bundle of services and have disrupt the market. So what is a Super App and what is so special that it is creating a huge buzz? Super App takes

What should be the winning strategy during economic slowdown?

Winning strategy in Economic slowdown In this blog, we shall discuss on what should be the winning strategy for companies to survive in economic slowdown. We shall limit the scope of this article to Technology sector. Any economic downturn should hold substantial opportunities for companies operating in Technology sector.If companies manage to build an action

Right Valuation multiples in the Valuation of a company

Valuation multiples In this blog, we shall look at how a properly executed analysis of valuation multiples can make the financial forecasting more accurate. When valuing a company, not all valuation methods are considered equal.More managers gravitate towards DCF – Discounted Cash Flow analysis as they consider it as the most accurate method to value