How asset-light strategies and models can boost business growth

Once seen as just a defensive tactic used by underperforming companies, asset-light strategies and business models are now becoming an essential tool to fuel growth and strengthen an ecosystem of partnerships. Recent Ernst & Young LLP research indicates that regardless of market position, an asset-light approach can help companies achieve higher total shareholder returns (TSR),1 among other financial benefits.

An asset-light strategy or business model involves transferring capabilities, such as people, process and technology, to “better owners” in order to enable companies to transition fixed costs to a variable cost structure, enhance agility, and facilitate a shift of resources that allows a focus on core capabilities.

EY Asset-light survey result
Analysis shows asset-light companies have outperformed their peers on total shareholder return over the last five years.

More than half of February 2021 webcast respondents believe that digitization and innovation are the key drivers for considering an asset-light strategy.

How asset-light models can be a strategic tool to build innovative, agile ecosystems
At its core, asset-light is about creating mutually advantageous partnerships that allow all parties to focus and manage the capabilities they are best at while creating greater profits and shareholder value for the benefit of all partners in a business’s ecosystem.

In addition to total shareholder returns, there may be other financial benefits. For example, another recent Ernst & Young LLP study found that companies that transitioned manufacturing ahead of a sale were 17 percentage points more likely to exceed expectations on the valuation of the remaining businesses and were more likely to exceed expectations on the price of the divestment.

Analysis shows asset-light companies outperform peers on total shareholder return

Ernst & Young LLP research of US Fortune 500 public companies across several sectors shows that asset-light companies achieved a greater total shareholder return when compared with their asset-heavy peers. We define asset-light companies as those that have a five-year property, plant and equipment (PPE) to sales ratio average lower than their respective sector mean. On average, the asset-light companies outperformed their asset-heavy peers by four percentage points in the last five years of total shareholder returns. Sample selected sectors are highlighted in the graphic below.

Is an asset-light model and strategy the right answer for your company?

Companies typically begin their asset-light journey by identifying which assets and capabilities are core to delivering value to their customer base right now. For example, sellers may find a path to greater operational agility by transitioning their manufacturing operations to a contract manufacturer rather than carving out an entire business unit and disposing of a valuable brand.

Overall, companies should begin by asking several key questions including:

-Is your company performing at its full potential — on growth, margin, return on invested capital (ROIC) and total shareholder returns metrics vs. peers? Is there an opportunity to perform even better?
-Do you have businesses or capabilities that need to be retained or non-core assets that may have a better owner in the marketplace?
-Can you create a greater focus in your organization by retaining your core capabilities only?
-Is your business model adequate for the products and services you sell in various markets?
-Have you undertaken any significant business model transformations (e.g., third-party partnerships, JVs) in the last two to three years?

Based on the responses to the questions above, companies should conduct a rapid analysis on three levels:

-Markets – determine which markets or geographies to play in
-Product and service – determine the right business model(s) based on respective product position(s) and marketplace offerings
-Capabilities – determine which capabilities are core and which are not

Full Potential Paradigm review
The Full Potential Paradigm is EY-Parthenon’s proprietary tool that provides an objective and quantitative point-of-view to set performance targets, prioritize investments and mitigate risks.

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Accelerating startup success: the role of MVP in agile software Development

In the fast-paced world of startups, the ability to swiftly bring a product to market can often be the key differentiator between success and failure. As entrepreneurs embark on their journey to create innovative solutions, the adoption of a well-structured product development strategy becomes crucial. One such strategy gaining prominence is the minimum viable product (MVP) in startup software development, coupled with the agile SDLC. This dynamic duo has proven to be a game-changer for startups looking to optimize their development processes and deliver value to customers efficiently.
The power of MVP in startup software development
MVP defined
At the heart of successful startup software development lies the concept of the Minimum Viable Product (MVP). An MVP is a strategically stripped-down version of a product that includes only its core features. The primary goal of MVP startup software development is to quickly launch the product into the market to gather valuable user feedback, allowing for iterative improvements based on actual user experiences.
Benefits of MVP in startup software development
The benefits of adopting a Minimum Viable Product (MVP) approach in startup software development extend beyond the initial expedited time-to-market. One of the key advantages is the significant enhancement of cost-efficiency throughout the development lifecycle.
Developing a full-featured product demands substantial financial resources, which may strain a startup’s budget. In contrast, an MVP allows startups to channel their resources strategically.
Furthermore, the MVP strategy establishes a valuable user feedback loop. Early deployment of a product allows startups to garner real-time insights into user experiences and preferences.
MVP startup software development in action
To better understand the practical application of MVP in startup software development, consider a hypothetical scenario where a new social networking platform is being developed. The MVP for this project could include essential features like user registration, profile creation, and basic social interaction functionalities. Once launched, early adopters can provide feedback, guiding subsequent development phases.

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Role of Agile Methodology In Redefining Mobile App Development Industry in 2023

‘Agile Methodology’ - one of those buzzwords that has been in the limelight for quite a few years now. From mobile app developers to testers to professionals with a technical background, they are well of how important the agile practices can be. This is one of the main reasons why we decided to cover this topic of agile app development.
In this article, we will be covering some of the major segments related to the agile scrum methodology including the meaning of agile scrum method, its benefits, as well as, the adoption of this technology.
What is Agile Scrum Methodology?
The term agile methodology can be defined as the practice of promoting continuous iteration of software/application development and testing throughout the complete lifecycle of that particular project. One of the main things that separate agile methodology with the waterfall method is its concurrent execution of activities.
Now, let's talk about the agile scrum methodology which is basically an agile software development method. The scrum methodology is one of the most widely known agile app development methods.
This agile scrum methodology can also be referred to as the method which is a combination of various agile models like the iterative model and incremental model. Due to the functionalities of multiple agile models, agile scrum method is very popular for managing the development of the product.
Differentiating Between Agile And Waterfall Methodologies
As mentioned above, both the agile method and the waterfall method are quite different from one another. So here is the list of some of the main differences between waterfall and agile methodology:
-In comparison to the waterfall method, agile is considered flexible and allows dynamic changes to be made in the software or app development.
-In agile development, the lifecycle of the project development is divided into sprints whereas in the waterfall method a sequential development process is followed.
-In the waterfall, the testing plan is not prioritized but in agile methodology, it is reviewed after completion of every sprint.
-Agile Scrum methodology offers a high degree of coordination as well as synchronization whereas waterfall has a rigid and limited structure.
-The agile methodology is simply a collection of various projects and for waterfall methodology, the software development process is considered as a single project.
-In waterfall, there is no iterative process that means once phases like testing and development are complete there won't be any iteration.
-In agile, we can alter the description of project details anytime during the SDLC process which is not possible in the waterfall development method.
How Agile Methods Helps Companies In Developing High-Quality Mobile Apps
Nowadays, the main aim of mobile app developers is to deliver high-quality applications with respect to their target audience’s preferences. But this high-quality status is not that easy to achieve as there are various hurdles that need to be crossed first. This is the part where agile methodology comes into action.

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