Market approach

Stage 3 Identify technology value

Market approach methodInfo Cubos

Diego Armando Marulanda Castro

Group Number: 212032_15

2004

Definition

The market approach is a general way of determining a value indication by comparing the subject company or ownership interest to similar businesses, business ownership interests, securities, or intangible assets that have been sold

Market Approach Methods

The two main valuation methods that are used under the market approach are: 1. Public Company Comparables The Public Company Comparables Method entails using valuation metrics from companies that have been traded publicly, which are considered to be rightly similar to the subject entity. 2. Precedent Transactions The Precedent Transactions Method involves deriving value using pricing multiples that are based on observed transactions of companies in the industry of the subject company. It is based on the perception that comprehensive company financial data is not easily available, but there is an availability of transaction value.

Processes related and mathematical formulas

The market approach is a general way of determining a value indication by comparing the subject company or ownership interest to similar businesses, business ownership interests, securities, or intangible assets that have been sold EnterpriseValue=NetEarnings×Price/EarningsRatio

How can companies create value from their innovation?

It consists of "using a marketing method not used before in the company that may consist of significant changes in design, packaging, positioning, promotion or pricing, always with the aim of increasing sales". Therefore, the goals pursued by the company when developing a marketing innovation are: Increase or maintain market share. Enter new markets.