Resource-based Valuation or RbV is a strategy process. Value planning and stakeholder communication is transformed by focussing on the ‘physics’ of the business - those critical resources that must be acquired, integrated and managed to build value. RbV explicitly describes and quantifies these resources over future time periods, using a simple but complete business architecture - the value cycle.

The value cycle is based on the underlying premise that cash and knowledge only are the only fundamental company resources - and that all other resources continually build from, and ultimately revert back to cash and knowledge. The value cycle provides the vital link between strategic planning and corporate valuation.

RbV is based on three core building blocks:

Resource-based strategy

Resource-based strategy emphasises that only resources (or capabilities) can generate sustainable long term value. These resources - tangible or intangible - are the value generating engine of any company. This resource-based view of strategy has a logic and coherence that places it well ahead of other strategic planning methods.

Corporate valuation

Corporate valuation principles and tools are well established and are not challenged. Where RbV differs is in its focus on the underlying assumptions behind any valuation model. The business physics prevail and valuation is conducted at the level of individual resources. This addresses the vexed issue of ‘intangible valuation’.

System dynamics

System dynamics (SD) is a scientific approach to understanding the behaviour of complex systems over time using simulation. SD provides a natural (and physical) value planning and communication architecture. It describes and quantifies the ‘physics’ of any business by reference to a rigorous (and consistent) resource-based language.

All three building blocks have been proven in practical application over many decades - in isolation. Through its value cycle architecture Valculus has integrated all three methods. The outcome is a unified approach to value planning and communication - synchronising existing approaches to strategic planning and corporate valuation. Simulation provides the underlying engine.

RbV benefits

• Long term value becomes the explicit focus of strategic planning
• Common language used for all stakeholder communication
• Unified strategic and financial planning processes
• Process for aligning short term action with long term value objectives.