Simmethod measuring and predicting apple risk and performance

SIMMETHOD
A New Way To Measure And Predict
Your Risk And Performance In The
Digital Economy
Apple
C-Level Success Metrics, Leading
Indicators And Risk Alerts
10/2/2015 1www.SIMMETHOD.blogspot.com

SIMMETHOD
Why The Experts Can Not Agree?
• “Morgan Stanley's stock market
guru explains why everything
you know is worthless”. Myles
Udland, Business insider on
September 28
10/2/2015
www.SIMMETHOD.blogspot.com
2

SIMMETHOD
• “In a note to clients on Monday,
Morgan Stanley chief equity
strategist Adam Parker wrote that
the world had changed and
investors looking to old methods for
valuing stocks would come up with
bad answers”.
10/2/2015
3

SIMMETHOD
• “In the US, corporate earnings growth
has been slowing down for months”.
• “It is amazing how forgiving the general
commentary has been on profits and
even the broad economy, Deutch Bank’s
David Bianco said in an email to
Business Insider”.
10/2/2015
4

SIMMETHOD
• “Many seem to celebrate the absence of a
recession. The labor market continues to
tighten…but other than some bright spots
like auto and housing, growth is extremely
weak with underlying drivers like
productivity and investing disturbingly poor
and S&P profits are not growing”. Sam Ro on
Business Insider on September 22
10/2/2015
5

SIMMETHOD
• “Not only are earnings in the US not growing,
but by many estimates, earnings are actually
contracting. Societe Generale's Andrew
Lapthorne has been sounding the alarm on
earnings for a while, and he reiterated this
call in a note to clients on Monday”. Sam Ro
on Business Insider on September 22
10/2/2015
6

SIMMETHOD
• “Shares of the formerly can-do-no
wrong stock are down 19.6% from their
high – putting them just outside the
claws of a bear market. That is much
worse than the 10.7% decline of the
broad Standard & Poor’s 500”. Matt
Krantz on the watch can not save Apple,
USA TODAY, October 1, 2015
10/2/2015
7

SIMMETHOD
• Is APPLE’s future risk and
performance predictable based
on the SIMMETHOD crowd
sourced competitive
intelligence and Strategy and
Execution Performance
Predictive Index?
10/2/2015 8WWW.SIMMETHOD.BLOGSPOT.COM

SIMMETHOD B-I-C Profiles And Risk Alerts
Benchmark Your Business Vs. The B-I-C
To review a case study of Apple Inc., compare
your gap to the Best in Class and set up risk
alerts versus the following profiles:
• Profit profile
• Value profile
• Sales profile
• Human Capital profile
10/2/2015 www.SIMMETHOD.blogspot.com 9

SIMMETHOD Solution
The Way You Measure Determines Your Results
•SIMMETHOD
Methodology and
Algorithms

SIMMETHOD
• The Industrial-age way we
measure and predict
corporate risk and
performance is broken and
disconnected from market
context and the new levers
of value creation.

SIMMETHOD
Problem Definition
The CEO Lament:
• My analytics and
business
intelligence point
North but my
business points
South

SIMMETHOD
Problem Definition
SIMMETHOD
C-suite
success
metrics &
risk alerts
Missing link
between analytics
and the C-suite
Missing link
between analytics
and performance
Industrial era
metrics
disconnected from
the new levers of
value creation
Silo-Metrics
unable to
holistically
measure strategy
and execution
Lack of c-suite
early warning risk
alerts and leading
indicators

SIMMETHOD
Is Business Intelligence And Analytics Failing The C-suite?
SIMMETHOD
C-suite
Success
Metrics And
Risk Alerts
PWC CEOs Survey:
56% of CEOs think
cross-sector
competition is on
the rise and 59%
see more threats
Boris Evelson, VP of BI,
Forrester Research: Only
40% of structured and 31%
of unstructured data
transformed into insights
IBM CFOs Insights: 53% of
CFOs think they are not
effective at measuring and
managing performance
Deloitte CFOs
Concerns & Insights:
Predicting your
competitors’ next
steps & execution
missteps

Why Do Businesses Succeed Or Fail?
SIMMETHOD Premise
SIMMETHOD
premise is simple:
Businesses succeed or fail
primarily due to internal
decision-making rather than
external circumstances
beyond management control.

SIMMETHOD
C-Level Leading Indicators
In spite of billions of dollars
spent on predictive analytics
and business intelligence
Why do companies succeed,
fail to perform or miss their
targets?
3/20/2015
www.simmethod.blogspot.com
16

SIMMETHOD
Strategy & Execution Performance Predictive
Index And C-Level Risk Alerts
Unlike product or process analytics or
industry specific ratios, the SIMMETHOD
algorithms:
Review business data and stockholders
valuation-decisions across business
sectors and
Build industry-agnostic and context-based
holistic indices in order to:
10/2/2015 17www.simmethod.blogspot.com

SIMMETHOD
Index And C-Level Risk Alerts
Identify, measure, correlate and
Predict your strengths and weaknesses versus
your current and future competitors from
inside or outside your industry and
Receive C-level risk alerts linked to a
competitive intelligence database
10/2/2015 18
www.simmethod.blogspot.com

The SIMMETHOD Algorithms
SIMMETHOD
Strategy &
Execution
Performance
Predictive Index
Stockholders
valuation and
management’s
rating
C-level strategy
& execution
Business model
Management’s
ability to
strategize &
execute against
competitors
Competitors
strategy &
execution

30/11/2014 Strategy & Execution Performance Predictive Index www.simmethod.blogspot.com
SIMMETHOD Strategy & Execution Performance Predictive
Index, Competitive Intelligence Database & Risk Alerts
SIMMETHOD: A new industry agnostic
way to measure and predict your risk and
performance in a “world without
industries”, the Internet of Things and
Connected Intelligent Products
BEST IN
CLASS
LOW PERFORMANCE &
MAXIMUM RISK
Global, predictive
strategy/execution
score & risk alerts
Risk &
Performance
aligned to
the B-I-C
Industry agnostic C-
level risk alerts and
leading indicators
Context
rather than
absolute
metrics &
targets
Crowd
sourced
competitive
intelligence
Unable to fend off
future competitors
from different
industries
Lack of holistic
strategy &
execution C-
level metrics
Lack of crowd
sourced self
correcting analytics
Industry specific
rather than market
metrics and C-level
risk alerts
Absolute or
relative metrics
rather than B-I-C
context metrics
Metrics & targets
are industry
agnostic (market
rather than
industry specific)
Risk & Performance
driven by external
circumstances beyond
management control

SIMMETHOD
Index And Risk Alerts
SIMMETHOD’s Strategy
& Execution
Performance Predictive
Indices and Risk Profiles
are not deterministic.
Businesses that act
on their
SIMMETHOD
leading indicators
and risk alerts will
improve their
future
performance.
10/2/2015 www.simmethod.blogspot.com 21

SIMMETHOD Strategy and Execution
Performance Predictive Index
The following C-Level indices
show your ability to:
• Strategize, execute and compete against
peers and the SIMMETHOD industry-
agnostic Best-In-Class and
• Are leading indicators of future business
opportunities, risk and performance.

SIMMETHOD
Best in Class league Table
•SIMMETHOD’s 2015
Strategy & Execution
Index Business
League Table

SIMMETHOD 2015 Strategy & Execution
0
10
20
30
40
50
60
70
80
C-suite Success Metrics, Leading Indicators And Risk Alerts
Single holistic metric to measure and predict the strategy
and execution of the Best in Class

0
5
10
15
20
25
30
35

-25
-20
-15
-10
-5
0

-70
-60
-50
-40
-30
-20
-10
0

SIMMETHOD
The Way You Measure Determines
Your Results
• Measuring and predicting
Apple’s ability to strategize
and execute versus the
SIMMETHOD Best in Class
10/2/2015
28

SIMMETHOD
Apple’s HR Index
10/2/2015
29
0
2
4
6
8
10
12
2012 2013 2014 2015
Avg. B-I-C
SIMMETHOD HR
Index
Apple
SIMMETHOD HR
Index
Although still above B-I-C levels, Apple’s
lower HR Index shows diminishing ability to
perform against the B-I-C

SIMMETHOD
Apple’s Overheads Index
10/2/2015
30
0
1
2
3
4
5
6
2012 2013 2014 2015
Avg. B-I-C
Overheads Index
Apple
SIMMETHOD
Overheads Index

SIMMETHOD
Apple’s Sales Index
10/2/2015
31
0
1
2
3
4
5
6
7
8
9
2012 2013 2014 2015
Avg. B-I-C
SIMMETHOD
Sales Index
Apple
SIMMETHOD
Sales Index

SIMMETHOD
Apple’s Cash/Debt Index
10/2/2015
32
0
2
4
6
8
10
12
2012 2013 2014 2015
Avg. B-I-C
SIMMETHOD
Cash/Debt Index
Apple SIMMETHOD
Cash/ Debt Index
Apple’s Cash/Debt Index is
showing a negative trend
against the SIMMETHOD
Best in Class

SIMMETHOD
Apple’s Value Creation Index
10/2/2015
33
0
5
10
15
20
25
2012 2013 2014 2015
Avg. B-I-C SIMMETHOD
Value Creation Index
Apple SIMMETHOD
Value Creation Index

SIMMETHOD
Apple’s Management Controllable
Resources Index
10/2/2015
34
0
5
10
15
20
25
30
35
40
45
2012 2013 2014 2015
Avg. B-I-C SIMMETHOD
Management Controllable
Resources Index
Apple SIMMETHOD
Management Controllable
Resources Index
Apple’s Management Controllable Resources
Index is trending down while the SIMMETHOD
Best-In-Class are trending up

SIMMETHOD
Apple’s Strategy & Execution
Performance Predictive index
10/2/2015
35
0
10
20
30
40
50
60
2012 2013 2014 2015
Average B-I-C
SIMMETHOD Strategy/
Execution Performance
Predictive Index
Apple SIMMETHOD
Strategy/ Execution
index

C-Level Strategy & Execution Performance
Predictive Indices and Risk Alerts
• When the SIMMETHOD Best in
Class indices and your indices
are moving in opposite
directions, your ability to
compete weakens in proportion
to your widening gap to the
Best-In-Class

SIMMETHOD
Apple’s Risk Index Trend Versus The
SIMMETHOD Best in Class
10/2/2015
37
0
2
4
6
8
10
12
14
2014 2015
Avg. B-I-C
SIMMETHOD Risk
Index
Apple
SIMMETHOD Risk
Index
Apple’s Risk Index against the B-I-C
is slightly increasing

SIMMETHOD
APPLE: RISK AND
PERFORMANCE TRENDS
•From 2012
to 2015
10/2/2015
38

SIMMETHOD
Apple’s Risk And Performance Trends
10/2/2015
39
0
10
20
30
40
50
60
Apple
2012
Apple
2013
Apple
2014
Apple
2015
Apple’s ability to compete
against the B-I-C has slightly
decreased in 2015

SIMMETHOD
Competitive Intelligence Vs. B-I-C
SIMMETHOD Index Vs. Best in Class Apple Alibaba Amazon eBay
Profit Index Pos Pos Neg Neg
Sales Index Pos Pos Neg Neg
Cash/Debt Index Neg Pos Pos Neg
Asset Index Pos Pos Pos Neg
Overheads Index Pos Pos Neg Neg
HR Index Pos Pos Neg Pos
Management Controllable Resources Index Pos Pos Pos Neg
Value Creation Index Index Pos Pos Neg Neg
Minimum Company Business Model Index Pos Pos Neg Neg
Strategy & Execution Predictive Index Pos Pos Pos Neg
Risk Index Pos Neg Neg Neg
10/2/2015
40

SIMMETHOD
And The Barron’s 500 List
• Is there a correlation between
Apple’s score in the 2015
SIMMETHOD Strategy &
Execution Best In Class and the
Barron’s 500 list?
10/2/2015 41
WWW.SIMMETHOD.BLOGSPOT.COM

The Barron’s 500
Based on:
• The 500 largest public companies in
the U.S. and Canada measured by
sales with a $5 Billion cut off and
covering every business sector.
10/2/2015
42

Barron’s 500 Ranking Algorithm
“Barron’s seeks to identify companies
that have done the best job of
investing for growth and compares
them on the basis of three equally
weighted metrics”:
10/2/2015
43

Barron’s 500 Ranking Algorithm
• “Median three-year cash-flow-based
ROI,
• Latest fiscal year change in that
measure relative to the three-year
median and
• Adjusted sales growth in the
last fiscal year”
10/2/2015
44

SIMMETHOD
And The Barron’s 500 List
Apple eBay Amazon
2015 rank (1 to 500) 213 203 212
2014 rank (1 to 500) 202 91 144
Trend Neg Neg. Neg.
Sales growth (A to F) B B A
Median 3-year cash-flow based ROI (A to F) A B B
Last year change in cash-flow ROI vs. 3-year median
(A to F)
F D F
2015 Barron’s Grade Point Avg. (4 to 0) 2.33 2.33 2.33
2014 Barron’s Grade Point Avg. (4 to 0) 2.33 3 2.67
Trend Same Neg. Neg.
10/2/2015
45

SIMMETHOD B-I-C Profiles And Risk Alerts
Benchmark Your Business Vs. The B-I-C
To review a case study of Apple Inc., compare
your gap to the Best in Class and set up risk
alerts versus the following profiles:
• Profit profile
• Value profile
• Sales profile
• Human Capital profile

SIMMETHOD’s Disclaimer
• The purpose of the SIMMETHOD Strategy &
Execution Performance Predictive Index, Best
In Class profiles and risk and opportunities
alerts is not to make a business right or
wrong but rather contribute towards the
understanding of management actions in
comparison to industry’s peers and
the SIMMETHOD Best In Class.

• SIMMETHOD’s Strategy & Execution
Performance Predictive Index, Best in Class
profiles and risk and opportunities alerts do
not seek to be exact (in the financial term)
but rather serve as a conduit to ask better
questions and seek better answers in the
performance improvement, risk minimization
and value creation journey.

• Sometimes, the value of a metric in itself
does not provide the greatest of insights, but
valuable actionable knowledge is gained
from its ability to provide a trend or a
common comparison yardstick with other
businesses across a range of
industries.

• This Presentation is for informational
purpose only and SIMMETHOD shall not be
liable for the contents of the Presentation or
for any damage incurred or alleged to be
incurred to any of the businesses included in
the Presentation as a result of its content.

SIMMETHOD
Makes Your Risk And Performance More Predictable
SIMMETHOD makes your risk and performance
more predictable by aligning your strategy
and execution to the:
• Market forces where the most value is being
created and
• Success metrics of your customers in order to
directly contribute to their results
10/2/2015 WWW.SIMMETHOD.BLOGSPOT.COM 51

Jorge Oscar Tabacman
jtabacman@gmail.com
Twitter ID: SIMMETHOD
SIMMETHOD
A new way to measure and predict
the risk and performance of your
business and alert you of new threats
and opportunities

Simmethod measuring and predicting apple risk and performance

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