Value Migration occurs when there is a disconnect between customer priorities and existing business design. The flow of economic and shareholder value moves away from obsolete business models to newer and more effective designs that are better able to satisfy customers’ most important priorities.

Types of value migration

·         Value migration across Geographies

·        Value migration within the country

·         Value migration within Industry

o   Weaker to stronger

o   Less adaptable to more adaptable

o   Incumbents’ vs Challengers

·         Value within the Company

o   Digital/Omni channel

o   Disruption

Detecting value migration

Value migration is often detectable in more than just financial parameters e.g. market share movements, customer satisfaction scores, policy changes and the change in innovation leadership. All these over time can mean that either the pace of value migration has gone up or the quantum of value migration has also increased.

In many cases, quantum of value migration may not be visible immediately. It needs a discerning lens. It needs to be discerned through the prism of Terminal Value.

The impact of compounding, the “hockey stick” or “exponential growth” kicks in over the longer term and creates immense value – this value is the Terminal Value (“TV)” i.e., the value beyond the foreseeable horizon.