Harvard Business School Press - 2002 - Mapping Corporate Growth Opportunities(1).pdf

VALUE SWEEP
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VA L U E
SWEEP
MAPPING CORPORATE
GROWTH OPPORTUNITIES
MARTHA AMRAM
Harvard Business School Press
Boston, Massachusetts
Copyright 2002 Harvard Business School Publishing Corporation
All rights reserved
Printed in the United States of America
06 05 04 03 02 54321
Requests for permission to use or reproduce material from this book should be
directed to ******@, or mailed to Permissions, Harvard
Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163.
Library of Congress Cataloging-in-Publication Data
Amram, Martha, 1957–
Value sweep : mapping corporate growth opportunities / Martha Amram.
p. cm.
Includes bibliographical references and index.
ISBN 1-57851-458-4
1. Valuation. 2. Corporations--Growth. 3. Investment analysis.
I. Title.
A5 2002
--dc21
2002004560
The paper used in this publication meets the requirements of the American
National Standard for Permanence of Paper for Publications and Documents in
Libraries and Archives -1992.
Contents
Preface vii
1 One Map of Value 1
2 The Look and Feel of Growth Opportunities 17
PART I EXPANDING THE TOOLKIT 31
3 Discounted Cash Flow:
Valuing Sustainable Growth 35
4 Real Options: Valuing Expansion Opportunities 49
5 Decision Analysis:
Designing Growth Opportunities 65
PART II VALUING GROWTH 81
6Tailored Valuation Templates 85
7Valuing Staged Growth 103
8 Growth Value Benchmarks from Venture Capital 121
9 A Close Look at Market-Priced Risk 139
vi Contents
PART III ACROSS THE SWEEP OF VALUE 151
10 Showing Value to Wall Street: Film Studios 155
11 Valuing More than the Idea:
Intellectual Property 171
12 Selecting the Investment:
Information Technology 185
13 Creating the Credible Growth Engine 201
PART IV EPILOGUE 221
14 Leading Growth 225
15 Marking a Spot on the Map of Value 241
Appen