Story Behind a Valuation
@SG 88：
Value Creation In any successful business, comes with their “sauce of success”. Its amazing to understand the simple logic behind it Create more value than you can consume In any successful outcome, be it in life, career or business, creating value touches every walks of life. Take example, $Amazon.com(AMZN)$ was created for a simple reason, having an “enduring franchising” model by unlocking the power of internet, offering low prices, vast selection, fast delivery on top of that save customers time and effort. It took 14 years (58 quarters) after May 1997 initial public offering for $Amazon.com(AMZN)$ to make cumulative of $1.86 billion net income on fourth quarter 2017. Online purchase save consumer time, effort and convenience where a typical visit to the stores would at least an hour if not more which translate to economic value to be better spend on more productive activities. Its said that by 2026, e-commerce sales would reach $8 trillion. Differential make the difference What make a business grow and survive in the long term? Some say its how the business operates, others would say its the way they do things around here (Culture). No matter what’s the reasons behind it, be who you are and thrive to make life better. The saying goes that If you build, they will come or perhaps Steve Jobs famous quotes It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them meant that products or services is being created to cater for future use leveraging on infrastructure changes. Simplicity When Steve Jobs unveiled $Apple(AAPL)$’s first iPhone on 9 Jan 2007. Since then iPhone has grew from $1.8 Billion to $191.9 Billion in 2021, representing 52% of Apple’s Total Revenue $ 365.8 Billion. By focusing on its core business model, a consumable company and delivering products and services with simplicity in mind, Apple manage to create amazing products from Apple Watch, Apple TV, iPad, MacBook and AirPods. Constant innovation is crucial especially in tech industry. Operational Efficiency Creating product that required have improvement elements attached would greatly in high demand especially when the outcome surpass the normal way of production improvement. $Velo3D, Inc.(VLD)$, enable additive manufacturing complex geometric structure used by industry giants like SpaceX, Lockheed Martin, and newcomers like Astra and Launcher to print rocket engines and other mission-critical parts for orbit to give it light-weighted higher performance textures. It indirectly reduces the cost of manufacturing, outweighing the traditional way of manufacturing creating a better product solution at a fraction of its costs. Lifestyle Convenience Amazon has created internet user the convenience of purchasing products at the lowest cost and save time to physically in store to purchase the product. Google search that enable one to get information so long as key words search is entered. This has been shown by their exponential growth Amazon 35 times growth, Google 11 times growth rate from 2009 until 2021. Tasty fulfilling Since the birth at a soda fountain in downtown Atlanta, Georgia, in 1886, Coca-cola’s distinguish refreshing taste bring to it sustainable revenue throughout the years. In a hot weather, nothing beat the cold drink of Coke. Coca-cola portfolio drinks: Sparkling Soft Drinks Brands: Coca-Cola, Sprite and Fanta Hydration, Sports, Coffee and Tea Brands: Dasani, smartwater, vitaminwater, Topo Chico, BODYARMOR, Powerade, Costa, Georgia, Gold Peak and Ayataka Nutrition, Juice, Dairy and Plant-Based Beverages Brands: Minute Maid, Simply, innocent, Del Valle, fairlife and AdeS Being sold throughout more than 200 countries and territories globally. Continuously innovate to deliver better not only in taste but also healthy product mix such Coca-cola Zero Sugar, goes to show that product differentiation play an important role for future sustainability in any business operation. Necessity Oil consumption drives any countries economy. Business that produce oil greatly depend on global oil price to sustain its business operation. Though Electric Vehicles maybe the the alternative toward sustainable consumption in minimising impact toward climax change with lesser greenhouse footprint aftermath; the adaptation would greatly depend on infrastructure maturity and economy of scale to ensure affordability to the mass market. Companies like Occidental Petroleum Corporation (OXY), ExxonMobil (XOM) and Chevron Corporation (CVX) are some that focusing on producing oil for mass market consumption. Optimising turnaround time, improving extraction process would greatly reduces friction in terms of costs as well as resources. Content Creation Google’s Youtube, ByteDance’s TikTok, ShapChat and the likes are few platform provider that allows universally content creation to showcase their work to the world. As they say “the power is within your hand”. So long as the content created is of “interest” it would be consumed with abundance. The most popular platform among sharing videos marketers: What portfolio you currently held that could withstand in time of recession as well as fend off (to certain extend) macro-economic changes? Would you go all in on few businesses or prefer to have a well diversified portfolio? How do you value a business? Base on the numbers behind its financial results, its exaggerating fianncial forecast or the story how it all begin and the management persistency in maintaining the story behind any number? @TigerStars @MillionaireTiger
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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