Assessing Business Value: Industry Dynamics

Unfortunately, not all businesses participate in a rapidly growing industry that supports high profit margins.  That does not mean, however, that value cannot be created and maintained in what many would describe as old stogy segments of the economy.

Take as an example the transportation industry.  Cars and trucks have been around since Henry Ford created his first ethanol engine in his workshop in 1896.  The core of the industry has been mature and stagnant by almost any measure.  Yet over the last several years, innovation and value creation have come in many forms.

Tesla has changed the way we think about gas powered engines.  Uber has changed the way we think about taxi services and sharing automobiles in general.  Waymo and others are leading the charge to remove drivers from the road.   The impact on our daily lives has been significant and turned the transportation industry upside down.

A mature, stagnant or declining industry may appear to be something that can’t be escaped resulting in a drag on the value of a business.  But don’t overlook that within almost any industry there is an opportunity to cause disruption and create value.

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