What Should You Include in Your Value Creation Strategy?

Corporate strategy for growth describes how the company will distinguish itself in its market and achieve a competitive advantage that creates substantial shareholder value in the near and long terms. The value creation plan explains what needs to be done to get there.

Value Creation Plan Considerations

When building a value creation plan, there are various aspects to consider that are not always obvious at first glance.

Corporate Culture

Corporate culture consists of the values, norms, and attitudes of a company. It is a product of the influences affecting corporate decisions, actions, and behavior. Ultimately, culture is about defining a shared set of enforced expectations.

People largely neglect the fact that corporate culture determines sustainable corporate development and the future direction of a company.

Some Major Changes

If you look at the technological development and the changes in our working world over the last ten years, you will find that almost everything has changed from the ground up.

“Face it: there is no normal anymore!”

Product and company cycles have changed drastically. Procedures and processes have become more efficient, faster-paced, and, above all, short-lived, following a universal expectation to do more faster with less. Now you will surely ask yourself, “How can my company avoid this trap?

The answer to this is simple:

Recognize, Understand, and Live Your Culture

A marriage does not only occur on the wedding day, nor does family life only happen on holiday. Like a marriage or family, the dynamics of corporate culture are ongoing and permeate every aspect of the company’s operation. Knowing corporate culture encompasses recognizing, explaining, and understanding the different patterns of thought and action involved in the company. Ultimately, it’s about figuring out why your company works the way it works.

Brand Positioning

Positioning refers to everything the company does to connect its business, products, and services with its customers. A well-positioned brand enables the company to charge a premium price, grow customer loyalty, and introduce new products and services. Building a clear and compelling brand is the cornerstone of increasing enterprise value.

Your company’s corporate culture and brand image are connected. Customers identify with your brand and the values that it represents. Therefore, your company’s brand image represents its strong corporate culture.

Brand positioning is important because:

  • A unique selling proposition helps you stand out from the competition.
  • It enables you to customize offers to meet both customer and market demands.
  • It helps you earn loyal and repeat customers.

Unmet Customer Needs

When companies do strategic planning, they typically look at past performance and forecast the future potential. Or they benchmark their business against competitors. In actuality, companies need to understand their customers’ unmet needs and design products/services accordingly to increase revenue and enhance value.

But how do you know what your customers need? There are several proven methods.

  1. Focus groups. A focus group includes people who discuss a specific topic. Market research companies organize such groups, and moderators facilitate them to encourage active participation by all members. Focus groups are a great way to get a feel for what consumers think about your brand.
  2. Customer surveys. Customer surveys or polls gather needed information from larger groups of people. They are often in the form of multiple-choice questionnaires that take mere minutes or even seconds of customers’ time to fill.
  3. Social media monitoring. Providing customer service on social networks has become increasingly important. Engaging with customers on their favorite channels also helps you build stronger bonds and is a great way to get their real-time feedback. The same issues arising over and over again identify a customer need.

Employee Engagement

A strategy and value creation plan are only as good as the people executing it; therefore, you need a highly engaged workforce to meet your strategic and value creation targets. Improve employee commitment and satisfaction by engaging them with incentives and rewards and completing their goals.

Understand the Market

Your value creation plan has to be grounded within the realities of your market. Now that you are confident that your offer meets a need or solves a problem, and therefore is likely to find buyers, you need to understand the context in which you will launch the business. Analyze the market for the players involved, the current trends, etc.

We must distinguish two markets: the global (macroeconomic) market and your company’s market niche. Studying the global market helps you define your mission, vision, strategy, and business model. It allows you to detect sector trends, changes in purchasing behavior, consumer needs, regulatory constraints, market players, and changes in market players.

Risk Reduction

Your strategy and value creation plan should provide a clear understanding of the risks associated with your operation:

  • Opportunity/Strength: An opportunity meets a strength–that’s a no-brainer. These “challenges” are at the core of the future strategy.
  • Opportunity/weakness: Consider what we can do to seize this opportunity. New projects and potential growth areas can arise here.
  • Risk/strength: This challenge expresses the risk we can get under control based on our strengths. “As?” is the crucial question.
  • Risk/weakness: This is where it gets dangerous. These are real challenges to avoid, true to the motto “danger recognized, danger averted.”

So, ask yourself:

  1. What is keeping me from hitting my value creation targets?
  2. Which scenarios can I foresee and take timely measures to take advantage of or avoid?
  3. What is out of my control?

Resource Allocation

Often, when companies first develop a value creation plan, they’re looking to grow enterprise value while relying on the same strategies and same investment levels that got them to their current position. If you’re targeting higher, you’ll need to look at your capital needs and investment tolerance to hit those targets.

Project risks have an immediate impact on resources. In addition to personnel, resources also include equipment, services, supplies, goods, materials, budgets, and funds. Realistic project and resource planning must always take the project risks into account.

A risk directly impacts the resources in the project: if costs rise and processing times increase, the project can be terminated in the worst case. While risks cannot be eliminated, it is possible to prepare for them.

If you have already evaluated a risk concerning its probability, effects, and possible countermeasures, then you can respond quickly and efficiently. Proactive resource planning reduces the likelihood of risk from the outset and helps you respond quickly by re-prioritizing, troubleshooting, and implementing countermeasures.

A Potent Combination

All in all, these factors influence what and how you specify your company’s vision and purpose and the action plan to achieve your desired outcomes. That action plan is your value strategy.

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Matt Lawver

Matt Lawver

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