Valuation Using The Market Penetration Model
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Valuation Using The Market Penetration Model
Valuation using the Market Penetration Model (MPM) or the growth potential of a company is a method of estimating the value of a company by calculating the depth of its market penetration as evidenced by its customer base and industry niche. The process consists of: * profiling a company's type of customer and analysing which complementary companies share these customers. * valuing the barriers to entry into the industry niche that the company operates in. Valuation overview The Market Penetration Model focuses on the synergy and opportunities for fast growth between the target company and the acquiring company. It prioritises ability to exploit future customer opportunities over previous financial performance. Many of the web 2.0 start up successes are valued using this method, due to the perceived value of customer attention over past profit. Advantages/disadvantages Advantages MPM has some advantages over other valuation methods: * Values intangible factors: such a ...
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Market Penetration
Market penetration refers to the successful selling of a good or service in a specific market. It is measured by the amount of sales volume of an existing good or service compared to the total target market for that product or service. Market penetration is the key for a business economic growth, growth strategy stemming from the Ansoff Matrix (Richardson, M., & Evans, C. (2007). H. Igor Ansoff first devised and published the Ansoff Matrix in the ''Harvard Business Review'' in 1957, within an article titled "Strategies for Diversification". The grid/matrix is utilized across businesses to help evaluate and determine the next stages the company must take in order to grow and the risks associated with the chosen strategy. With numerous options available, this matrix helps narrow down the best fit for an organization. This strategy involves selling current products or services to the existing market in order to obtain a higher market share. This could involve persuading current cust ...
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Customer Base
The customer base is a group of customers who repeatedly purchase the goods or services of a business. These customers are a main source of revenue for a company. The customer base may be considered a business's target market, where customer behaviors are well understood through market research or past experience. Relying on a customer base can make growth and innovation difficult. Companies with a customer base consisting mainly of large companies may increase their customer base by pursuing small and mid-size companies. Legal issues From a legal point of view, the customer base is an accessible collection of confidential data on entities buying goods or using services of a particular entrepreneur, actually or contractually related to that entrepreneur (customers), of measurable economic value, enabling the conclusion or execution of contracts with those customers. Customer base within this meaning generally satisfies the conditions for recognizing it as a type of non-technica ...
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Web 2
Web 2.0 (also known as participative (or participatory) web and social web) refers to websites that emphasize user-generated content, ease of use, participatory culture and interoperability (i.e., compatibility with other products, systems, and devices) for end users. The term was coined by Darcy DiNucci in 1999 and later popularized by Tim O'Reilly and Dale Dougherty at the first Web 2.0 Conference in 2004. Although the term mimics the numbering of software versions, it does not denote a formal change in the nature of the World Wide Web, but merely describes a general change that occurred during this period as interactive websites proliferated and came to overshadow the older, more static websites of the original Web. A Web 2.0 website allows users to interact and collaborate with each other through social media dialogue as creators of user-generated content in a virtual community. This contrasts the first generation of Web 1.0-era websites where people were limited to vie ...
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Facebook
Facebook is an online social media and social networking service owned by American company Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes, its name comes from the face book directories often given to American university students. Membership was initially limited to Harvard students, gradually expanding to other North American universities and, since 2006, anyone over 13 years old. As of July 2022, Facebook claimed 2.93 billion monthly active users, and ranked third worldwide among the most visited websites as of July 2022. It was the most downloaded mobile app of the 2010s. Facebook can be accessed from devices with Internet connectivity, such as personal computers, tablets and smartphones. After registering, users can create a profile revealing information about themselves. They can post text, photos and multimedia which are shared with any ...
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Instagram
Instagram is a photo and video sharing social networking service owned by American company Meta Platforms. The app allows users to upload media that can be edited with filters and organized by hashtags and geographical tagging. Posts can be shared publicly or with preapproved followers. Users can browse other users' content by tag and location, view trending content, like photos, and follow other users to add their content to a personal feed. Instagram was originally distinguished by allowing content to be framed only in a square (1:1) aspect ratio of 640 pixels to match the display width of the iPhone at the time. In 2015, this restriction was eased with an increase to 1080 pixels. It also added messaging features, the ability to include multiple images or videos in a single post, and a Stories feature—similar to its main competitor Snapchat—which allowed users to post their content to a sequential feed, with each post accessible to others for 24 hours. As of Janu ...
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ABC News
ABC News is the news division of the American broadcast network ABC. Its flagship program is the daily evening newscast ''ABC World News Tonight, ABC World News Tonight with David Muir''; other programs include Breakfast television, morning news-talk show ''Good Morning America'', ''Nightline'', ''Primetime (American TV program), Primetime'', and ''20/20 (American TV program), 20/20'', and Sunday morning talk shows, Sunday morning political affairs program ''This Week (ABC TV series), This Week with George Stephanopoulos''. In addition to the division's television programs, ABC News has radio and digital outlets, including ABC News Radio and ABC News Live, plus various podcasts hosted by ABC News personalities. History Early years ABC began in 1943 as the Blue Network, NBC Blue Network, a radio network that was Corporate spin-off, spun off from NBC, as ordered by the Federal Communications Commission (FCC) in 1942. The reason for the order was to expand competition in radi ...
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American Broadcasting Company
The American Broadcasting Company (ABC) is an American commercial broadcast television network. It is the flagship property of the ABC Entertainment Group division of The Walt Disney Company. The network is headquartered in Burbank, California, on Riverside Drive, directly across the street from Walt Disney Studios and adjacent to the Roy E. Disney Animation Building. The network's secondary offices, and headquarters of its news division, are in New York City, at its broadcast center at 77 West 66th Street on the Upper West Side of Manhattan. Since 2007, when ABC Radio (also known as Cumulus Media Networks) was sold to Citadel Broadcasting, ABC has reduced its broadcasting operations almost exclusively to television. It is the fifth-oldest major broadcasting network in the world and the youngest of the American Big Three television networks. The network is sometimes referred to as the Alphabet Network, as its initialism also represents the first three letters of the ...
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Social Media
Social media are interactive media technologies that facilitate the creation and sharing of information, ideas, interests, and other forms of expression through virtual communities and networks. While challenges to the definition of ''social media'' arise due to the variety of stand-alone and built-in social media services currently available, there are some common features: # Social media are interactive Web 2.0 Internet-based applications. # User-generated content—such as text posts or comments, digital photos or videos, and data generated through all online interactions—is the lifeblood of social media. # Users create service-specific profiles for the website or app that are designed and maintained by the social media organization. # Social media helps the development of online social networks by connecting a user's profile with those of other individuals or groups. The term ''social'' in regard to media suggests that platforms are user-centric and enable communal ac ...
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Smart Phone
A smartphone is a portable computer device that combines mobile telephone and computing functions into one unit. They are distinguished from feature phones by their stronger hardware capabilities and extensive mobile operating systems, which facilitate wider software, internet (including web browsing over mobile broadband), and multimedia functionality (including music, video, cameras, and gaming), alongside core phone functions such as voice calls and text messaging. Smartphones typically contain a number of metal–oxide–semiconductor (MOS) integrated circuit (IC) chips, include various sensors that can be leveraged by pre-included and third-party software (such as a magnetometer, proximity sensors, barometer, gyroscope, accelerometer and more), and support wireless communications protocols (such as Bluetooth, Wi-Fi, or satellite navigation). Early smartphones were marketed primarily towards the enterprise market, attempting to bridge the functionality of standal ...
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Google
Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. It has been referred to as "the most powerful company in the world" and one of the world's most valuable brands due to its market dominance, data collection, and technological advantages in the area of artificial intelligence. Its parent company Alphabet is considered one of the Big Five American information technology companies, alongside Amazon, Apple, Meta, and Microsoft. Google was founded on September 4, 1998, by Larry Page and Sergey Brin while they were PhD students at Stanford University in California. Together they own about 14% of its publicly listed shares and control 56% of its stockholder voting power through super-voting stock. The company went public via an initial public offering (IPO) in 2004. In 2015, Google was reor ...
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