by Bravin Arvazaganand Raju Sarma and Sashin Lula
The largest American companies have a deficit of 9 trillion dollars in the value of shareholders. This is the gap between the market value of the S&P 500 quantities in January 2025 and the value that these companies need to achieve a total growth of first-class shareholders at least 15 % until 2029, according to the Ey-Parthenon analysis (Figure 1). This group excludes the wonderful SEVEN Tech shares and huge growth features, as well as banks and real estate investment funds (Reits), with different capital structures.
Figure 1: The inevitability of growth: Companies need to determine, consent and finance 9 trillion dollars of the fundamental value.
1. Based on the & P 500 components as of January 14, 2024.
2. “Banks” include various banks, regional banks, investment and mediation banking services, asset management and nursery banks, consumer financing, and various financial services (Capital Intelligence Sector Categories).
3. The wonderful seven is a group of high -performance and influencing companies in the United States.
Source: Eyp Analysis, S & P Capital IQ
How can the 432 companies currently make up a $ 9 trillion deficit? Building the corporate project is an essential way to increase the growth of the P&L and the company’s market.
Yes, building a new project may be difficult. Companies need to find the suitability of the appropriate products market, develop a strategy to go to the market, enable a team of the mentality of organizing appropriate projects to distinguish themselves in the market and gain this rise.
But companies created have an advantage over startups: endowments, or distinct assets, as they have already developed them, including customer relationships, intellectual property and their supply chain system. These endowments can help builders of corporate projects in creating a company that can provide great returns quickly.
But the endowments can also differ from one company to another, which leads to distinctive ways to build the corporate project.
Based on the construction of more than 70 projects, Ey-Parthenon Corporate Venture Builders has classified new projects into four preliminary models (Figure 2), taking into account the operators that drive the need to develop a new project and stand the specified company. Companies that start building the project must harmonize their efforts with these four models to help increase success opportunities to the maximum.
Figure 2: Four Models of Companies Projects
The four models
1. Corporate launch companies
OperatorThe company determines an internal problem and uses its endowments to solve it – and create solutions that it can sell. By becoming its first customer, the company can test the product or solution before its launch.
Endowment: The capabilities with commercial capabilities, such as talents, capital and industrial intelligence; “The first agent” is ready within his private company; The ability to try and custody of the project internally.
benefit: Solve its challenge and create a new P&L to enhance growth. Through the test internally, it can issue a solution on the market with more certainty of success and a faster growth path.
exampleAn industrial company witnessed that the lack of transparency and high costs in insurance rates led to the frustration of its customers. The company has developed an insurance project to address customer concerns about transparent prices and high costs.
The company can access data inputs such as customer behavior and equipment health, which helps it more effectively to assess insurance risks and generate more accurate and transparent prices, which may be a competitor. The new project allows the company to improve product packages, increase “isolation”, embody a greater share of the total cost of ownership, and reduce the total cost of customers.
2. Technology striker
Operator: To develop a sabotage company that focuses on technology that will lead its old competitors, the company is looking to enter a new company or a region that does not contain a market share.
Endowment: The ability to experiment and custody in basic works; Customer and other owned relationships.
benefitThe ability to use technology to disable the market as it gets a low market share.
example: The housing and commercial industrial equipment manufacturing company has requested a new growth in the solutions of smart connected products, provides energy management, actual time monitoring, leakage discovery alerts and fleet management. The company used its firm heritage for products to innovate with normative electronic controlled electronic controls.
Customer partnerships were also used to create digital revenue flows, such as subscription revenues from fasteners to provide high -quality strands for spare parts, service, maintenance and replacement. The large installed base of the company also allowed the construction of new partnerships with demand complexes and utilities companies to compensate for loads during peak periods, generating new revenues from facilities and passing savings to their consumers.
3. IP IGNITE
OperatorThe desire to increase the complications of the market by losing its technology or intellectual property (IP) to a new company that can obtain the highest possible complications.
Endowment: Royal ip, search and development (R&D), products, pricing power, value chain experience and data; The capabilities with commercial capabilities.
benefit: IP reshape, including a dormant IP, to create a work that can get a higher heart.
exampleThe company’s global growth rate was the plateau, as contractors sought to obtain pricing agreements and a better service level. The company used the base of purchases and large suppliers, the power of pricing and the large customer base to convert the purchasing function to the B2B market to generate revenue, with better pricing for contractors and the size committed to suppliers.
4. Customer x
OperatorSigns of stagnation across current products.
Endowment: Deep customer and other owned relationships; Channel and distribution partners.
benefitThe ability to quickly expand new offers using customer relationships and the current ecosystem in new ways.
exampleConsumer Products Company has faced a long -term decrease in demand for its basic products. But she had relationships with millions of consumers and thousands of retail outlets. Using these relationships, the company has developed a new retail sales services platform, as independent brick and mortar retailers provide analytical tools and added value services to help increase growth and profitable efficiency.
The original models may overlap
These original models are not mutually exclusive. Multiple original models can play in a new project. The company can create a launch platform for companies and make itself the first customer, and ignited the current IP to do so. Or you can use the current IP address in new ways, and to re -imagine what you can do for existing customers.
However, to successfully use the project to find a completely new P&L and increase the total shareholders ’revenues, companies can start identifying what these advantages are and what is the original model for building the project.
Learn more about how to-Parthenon Companies project building The team helps companies to create, build and expand new business and re -perceive their basic business.
Bravin Arvazagan It is the chief project construction company and Ey-Parthenon Amerthas Corporate Venture Starious, Ernst & Young LLP.
Raju Sarma He is one of the major facilities and garage leader in La Venture for Ey-Parthenon and Ernst & Young Llp.
Sashin Lula Is Eyicas Consulting Products Products Leader, Ernst & Young LLP.
Charlotte Clark, Ey-Parthenon Venture Builder, Ernst & Young LLP, contributed to this article.
The views that are reflected in this article are the views of the authors and do not necessarily reflect the opinions of Ernst & Young LLP or other members of Global Ey.
