Value in a Digital World: How to Assess Business Models and Measure Value in a Digital World (Francisco J. Lopez; Jose Esteves, 2017)


  • New AIDA: Initial consideration set > active evaluation (information gathering, shopping) [or loyalty loop] > moment of purchase > post purchase experience (ongoing exposure)
  • New digital economy
    • Web business model
    • Merchant and brokerage model
    • Community model
    • Infomediary model
    • Affiliate model
    • Advertising model
    • Manufacturer’s direct model
    • Subscription model
    • Utility model
    • Freemium model
  • Economic value (EV): market value versus book value
    • Opportunity cost
    • Sunk cost
    • Depreciation expenses
    • Allocated expenses
    • Sales of assets
  • Financial tips
    • Initial and successive outlays to meet working capital
    • Liquidation during time limit
    • Ignore sunk cost as they are already paid
    • Do not confuse past and future cash flow
    • Be systematic when analysing cash flow
  • WACC: weighted average cost of capital (operational risk)
  • FCF: free cash flow (financial risk)
  • Innovations: continuity > breakthrough innovation (high market development) > incremental innovation (high technology development) > disruptive innovation
  • Terminal value: the value beyond the forecast period when future cash flows can be estimated
  • Focus on your key value driver (KVD)
  • Digital revenue models:
    • Freemium
    • Advertising
    • Community
    • Infomediary


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