Value Creation

“Ten to fifteen percent new revenues or profits streams”

We believe there has been a fundamental shift in how and where brewers will generate future shareholder value. The new digital economy together with the shift towards intangible assets such as brands, culture, market knowledge, customer focus and speed to market are daily changing the competitive landscape.

In an ideal world every senior brewery executive would be able to review, consider and then choose from a list of literally dozens of new strategies and opportunities that would directly improve their Bottom-Line Results.

Unfortunately the real world is very different because most managers, who are focused on day to day problems and issues, do not have the time, personnel, or perspective to stand back, take a fresh look at their business, and then generate such a list.

By sharing knowledge and understanding of each brewery’s special circumstances with First Key’s knowledge and understanding of the world market dynamics and world-class manufacturing, we identify and then develop a series of strategies and opportunities currently not available or under consideration.

First Key has developed a structured “Value Creation Approach” to help senior managers quickly gain a fresh overview of the many options and opportunities they have to choose from.

The assessment is conducted over a 60-90 day period to provide a fast and effective means of identifying and understanding a brewery’s hidden value potential and under-utilized intangible assets.

The Methodology

A small team of First Key specialists supported by a team from the brewing company will study current programs from a wide variety of different perspectives, looking for inter-related synergies and applying a range of ‘what if’ strategies.

Most of our initial research can be undertaken by reviewing documents, talking to people who manage the enterprise systems, looking for the presence or absence of initiatives, the obvious or reported levels of sophistication, and the reported efficiency and effectiveness of each program in terms of its contribution to profit.

In its simplest form profit is a function of 3 strategic drivers, namely revenues, cost savings, and intangible ‘catalysts’:

Profit = Revenues + Cost savings + ‘Catalysts’

A checklist scorecard of 41 programs in these 3 driving areas is used as the basis for discussion of new opportunities. The scorecard and its implications are then further discussed with key brewery executives in brainstorming sessions.

Next, First Key will make a recommendation to management of the 5 to 10 value creation opportunities which look most promising, and what the brewing company would have to do to unlock this hidden value. At the conclusion of this assessment, senior management will have:

  1. A wider overview of their strategic options
  2. A list of 5 – 10 revenue enhancing new value creation opportunities
  3. A “road map” to select, to action, and to implement each opportunity

It is our ultimate objective that when taken together the sum of the chosen new business opportunities and cost savings programs will generate an incremental 10 to 15% new revenues or profit streams.