Value Driver Trees: Diverse Perspectives for Analysis PPT
This PPT slide, part of the 54-slide Value Creation Framework PowerPoint presentation, presents a framework illustrating how different analytical perspectives can lead to varied value driver trees. It emphasizes the importance of selecting the right viewpoint when assessing value creation.
Three distinct trees are outlined: the Traditional “P&L tree,” the Branch value tree, and the Market segment tree. Each tree serves as a unique lens through which to evaluate value.
The Traditional “P&L tree” focuses on fundamental financial metrics, including revenue, costs, and capital changes. It connects these elements to Return on Invested Capital (ROIC) and ROIC growth, highlighting how traditional financial analysis can provide insights into overall value.
The Branch value tree shifts the focus to individual branches within an organization. It breaks down economic profit per branch and includes metrics such as the number of branches, contract staff per branch, margin per staff member, utilization rates, and capital changes. This perspective allows for a more granular analysis of performance at the branch level, which can be crucial for operational decision-making.
The Market segment tree takes a broader market view. It assesses economic profit in specific segments, detailing metrics like segment size, market share, and average margin, including capital charges. This approach helps in understanding how different market segments contribute to overall value and can inform strategic positioning.
Overall, the slide underscores the necessity of adopting multiple perspectives to gain a comprehensive understanding of value creation. Each tree provides distinct insights that can drive strategic decisions and operational improvements. This framework can be particularly valuable for executives seeking to optimize performance across various dimensions of their business.
This slide is part of the Value Creation Framework PowerPoint presentation.
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Shareholder Value Value Creation Financial Analysis Positioning
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