Alpine Consulting’s approach to strategy is based on two fundamental concepts:
- An organisations ultimate goal:
The development of a governing principle for companies was fought out over the 1980 and 1990. Two competing views were expressed; that of Customer Value – “the
purpose of a business was to create and keep customers”, and the shareholder value view – that a business job was to enhance shareholder wealth. That the shareholder value view won out is fact. However, many corporations then set about maximising short term earnings, disguised as value in direct contrast to the concepts laid out by the proponents of shareholder value, including the management consulting firms Marakon Associates, Stern Stewart & Co and Alcar, together with the academics that stood behind them such as Dr Bill Alberts, Joel Stern and Professor Al Rappaport.
It is the view of Alpine Consulting that a restatement of the governing objective is required. That is, the real goal is not to create shareholder wealth per se, but to build an organisation with the capability to create wealth for shareholders on an ongoing basis.
- The source of value is created at the product/customer interface.
While measured in the capital market by share price changes and dividend flows, shareholder wealth is actually created in the products and services market, through the development and delivery of appropriately priced products or services that create value for customers. What this means is that companies need to be able to measure value at a product/customer level.
Alpine Consulting can help build the capability in our client organisations through the development of models and thinking processes that will encourage innovation and development of customer value, whilst being able to test the shareholder value created.
In particular we can assist with:
- Business Unit Strategy (including value models at product/business level)
- Value chain analysis (Looking at the way value is created and then shared by the various stakeholders in the business)
- Pricing models (special case of a value model).