Value Sweep: Mapping Growth Opportunities Across Assets

by Martha Amram

Book Overview

Value Sweep offers a field-testing perspective on how to balance the value of growth from new products and innovations with the value of executing the current business. It presents an innovative valuation methodology that links stock market prices with the valuations of private equity, corporate growth projects and intellectual property. The implementation is straightforward and transparent - the work extends the real options framework to accommodate...

• Format: Hardcover
• Language: English
• ISBN: 1578514584
• ISBN13: 9781578514588
• Release Date: June 2002
• Publisher: Harvard Business Review Press
• Length: 288 Pages
• Weight: 1.40 lbs.
• Dimensions: 1.1" x 6.4" x 9.5"

Customer Reviews

Breakthrough Thinking on the Creation of Value

This book was written for decision-makers in organizations which are in current or imminent need of (a) benchmarking and comparing the value of their growth opportunities, (b) aligning the value of private growth opportunities with public market valuations, and (c) replacing complex calculations with simple and transparent methods. Amram re-examines and re-evaluates several of the core concepts which she and co-author Nalin Kulatilaka discussed in a previous work, Real Options: Managing Strategic Investment in an Uncertain World. However, as she explains in her Preface, she has since drawn two strong conclusions. "First, in many [but not all] applications, real options is not the right tool. I'll raise this issue through this book [Value Sweep] and show how to combine real options with other strategic perspectives. Second, decision analysis (and decision analysis coupled with real options) is quite an expansive approach; it can handle a lot of detail. Often, however, the detail overwhelms the rationale."Here are several important questions which many organizations are now struggling to answer:1. How can the value of growth from our new products and innovations be compared to the value of existing business?2. Is there any rationale behind our valuations based on Internet growth expectations? Is there a way to identify and track the changing value of growth?3. What's the value of our intellectual property? What is the value of our business models built around selling of ideas?4. Are we prepared to tell a convincing, indeed compelling "story" about our growth opportunities that supports the value of our growth? Can we provide credible numbers with that "story"?Amram addresses all of these and many others in 15 chapters which are organized as follows: "One Map of Value" (Chapter 1) and "The Look and Feel of Growth Opportunities" (Chapter 2), followed by three Parts and an Epilogue: Expanding the Toolkit (e.g. "Discounted Cash Flow," Chapter 3), Valuing Growth (e.g. "Growth Value Benchmarks from Venture Capital," Chapter 8), Across the Sweep of Value (e.g. "Creating the Credible Growth Engine," Chapter 13), and then her Epilogue in which she focuses on "Leading Growth" in Chapter 14 and "Marking a Spot on the Face of Value" in Chapter 15. Readers will be especially grateful for a substantial Appendix which consists of nine "Tables" for growth option lookup and estimating volatility, followed by a highly informative Glossary. I provide all this information to help the reader of this review get a more specific sense of what Amram offers in this book. Amram demonstrates exceptional writing when presenting her material. All organizations embark on a new "journey" at the beginning of their fiscal year and must make hundreds (thousands?) of decisions with regard to the allocation of their resources. Many of those decisions have profoundly serious implications...both positive and negative. Whether or not an organization survives may perhaps depend on some of