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beyond the simple “classification” of any individual brand and instead explore broad patterns of how archetypal brands work and how they affect multiple criteria for success. It was with that intent that Young & Rubicam’s analysts discovered that the strength of a brand’s association with an archetype makes a significant difference in at least one fundamental indicator of true economic worth: asset valuation. The BAV researchers were working with some pioneering concepts of economic performance developed by Stern Stewart, a highly respected financial consulting firm. Their analysis showed that brands associated with archetypal identities positively and profoundly influence the real asset valuation of their companies. The measures involved are Market Value Added (MVA) and Economic Value Added (EVA). MVA is a measure of how much value a company has added to, or subtracted from, its shareholder investment. In other words, MVA measures whether investors expect that future profits of the corporation will be greater or less than the cost of capital. An increasing MVA indicates that the company is producing (or is likely to produce) higher rates of return than the cost of capital. A decreasing MVA shows that a firm has fallen short of expectations or has committed capital to new investments that the market does not expect to be justified. EVA is the financial performance measure that comes closer than any other measure to capturing the true economic profit of an enterprise and is the measure most directly linked to the creation of shareholder wealth over time. EVA is an estimate of net operating profit minus an appropriate charge for the opportunity costs of all capital invested in the enterprise. As such, EVA is reflective of true economic profit, or the amount by which earnings exceed or fall short of the required minimum rate of return that shareholders and lenders could get by investing in other securities of comparable risk. A positive change in EVA reflects a company’s internal progress in creating real value. These measures are critically important because while most companies appear profitable under conventional accounting, many, in fact, are not. As Peter Drucker put it in a Harvard Business Review article, “Until a business returns a profit that is greater than its cost of capital, it operates at a loss. Never mind that it pays taxes as if it had a genuine profit. The enterprise still returns less to the economy

Profile for Lewis Lafontaine

Mack, Margaret - Hero and Outlaw Archetype  

Mack, Margaret - Hero and Outlaw Archetype