THE CHALLENGE FOR MANAGEMENT

During the past few years, the competitive landscape has changed dramatically. This change will continue and, if anything, will become more pronounced and even less predictable. The constantly changing global marketplace has made precision and speed of paramount importance, but only when coupled with flexibility. There are severe penalties for being late or wrong. However, aiming at unpredictable, moving targets created by change requires planning that incorporates mechanisms for addressing unforeseen situations. Increasing global competition - for customers, profit and capital - are driving the need for senior management to pinpoint where value resides, what it takes to extract the value and where and when resources should be in place. Only then is management able to prioritize and focus on the most valuable markets and opportunities.

MEETING THE CHALLENGE: UNDERSTANDING AND CAPTURING VALUE

Management's most important role is the continuous assessment of the company's total portfolio and building blocks therein. Building blocks are defined by markets on one axis and products or services on the other, resulting in a sizeable number of components to manage. The key questions become:

• What is the value of the portfolio itself?
• How valuable is each element of the portfolio under current company strategy and resource positioning?
• What is the maximum value that can be extracted from each building block?
• What resources does it take to extract that maximum value?

International markets are particularly complex as managements have less experience, information and analytical resources upon which to rely. WKI specializes in international markets and helps management overcome these barriers.

WKI measures the value of an international opportunity not only by sales and profit (offensive value), but also by defensive and informational gains supplemented by linkages that may exist between different markets. Only by looking at total value can a client prioritize opportunities and create a focused strategy that optimizes resource utilization.

WKI'S SERVICE TO MANAGEMENT
Portfolio Construction by Utilizing the WKI Global Valuation Process

The value of each segment of any business is the sum of: Earnings Growth + Risk + Portfolio Value. Earnings growth is clear. Risk depends on the size of the investment, timing of returns and predictability. Portfolio value measures the combined worth of all the segments. In addition, each of the above is determined by the resources applied and the timing of their commitment. WKI has developed the WKI Global Valuation Process, a systematic methodology that combines all these factors into a uniform evaluation. The Global Valuation Process leads to a strategy and follows with an action plan. It results in the clear prioritization of markets and focusing of resources. The incorporation of this process has led repeatedly to a leadership position for many of our clients, all of whom use it continuously.

Five major analytical components comprise the Global Valuation Process. Each analytical component answers a set of questions that management must address before a decision can be reached. These five components are:

• Global vs. Local Industry Analysis
• Opportunity Analysis
• Sales & Marketing Planning
• Product Sourcing Systems
• Strategic Alliance Geopositioning

While all of our projects are carefully designed to meet a client's unique needs, each engagement benefits from this global valuations process. Whether we work with the client on the entire process, or concentrate on only a part, depends upon the corporation's needs and existing situations.

"In the process of formulating a global strategy, it became clear that we did not have the knowledge, experience or contacts with the regions of the world to allow us to sell and profit from our products in the world's key markets. Through the efforts of William Kent International, we have now a roadmap to achieve our international goals which include specific action plans that will guide us on our journey."
J. Michael Hagan, Chairman and CEO
Furon Company

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