COMM 3040 Blocks 3 & 4 Spring 2021

Strategic Value Creation (SVC) Project Guidelines

The Strategic Value Creation (SVC) project asks you to analyze a focal company and develop a new
corporate-level strategy recommendation that is capable of creating significant financial value for that
firm’s shareholders. Student groups will select a focal firm from a list of publicly-traded companies that
are experiencing negative market sentiment regarding their future prospects. For the purposes of this
assignment, you and your ICE Group should adopt the role of c-suite executives at the focal firm who
will create a stand-alone proposal deck and then a presentation (with slides) to your audience: the firm’s
Board of Directors. You will need to integrate Strategy, Finance and Communication concepts from
3040 and what you’ve learned in the fall to formulate and defend your proposed vision.

Specifically, the SVC project requires groups to:

1) Select a focal company (from the Excel File with company team lists posted on Blackboard). Your
Strategy SGA report is due 2/19, so we strongly encourage making this decision soon.
2) Analyze and identify the business-level factors that are responsible for low market expectations.
3) Analyze and identify the governance and market pressures facing the firm’s executives.
4) Perform an “as-is” DCF valuation of the firm to understand whether current market sentiment
creates opportunities or constraints for changes in corporate-level strategy.
5) After considering the above:
a. Devise a corporate-level strategy transaction that can increase financial value. This may
include the firm:
i. entering new industries (horizontal diversification),
ii. entering new segments of the supply chain (vertical integration), or
iii. entering into new international markets (geographic diversification).
iv. Groups may also propose that the focal firm decrease diversification and increase
financial value by divesting specific units.
b. Identify the best method for executing this proposed change (e.g., acquisition, alliance, internal
development, divestiture).
c. Propose a specific transaction to “your” firm’s Board of Directors via the required
deliverables.
To support the argument for your proposal you’ll:
6) Qualitatively articulate the strategic rationale for your proposal.
7) Quantitatively model the incremental impact of your proposal on operating and terminal cash
flows and earnings per share. Groups should also provide thoughts regarding likely ramifications
for the firm's stock price (using the ‘as-is’ DCF valuation as a baseline). 
8) Formulate an implementation plan that identifies and addresses the most salient implementation
challenges. Incorporate these contingencies into your financial valuation.
9) Adopting the role of c-suite executives, create a client-ready stand-alone deck and then a
presentation deck—both of which effectively communicate your proposed transaction to the Board
of Directors of your firm.
10) Present and defend your new proposal to your company’s Board of Directors during a , 23 minute
scheduled, socially distanced, online Zoom meeting.
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Leverage 3040 concepts to effectively argue for your proposed vision

All groups are tasked with a common challenge: use corporate-level strategies to create and
communicate financial value for shareholders. The guidelines and required deliverables stated above
reflect the core elements of the project. However, specific tools, issues, and forms of analysis will be
more (or less) important depending on the type of change you propose. For example, the issues involved
in taking an existing product to new international markets differs substantially from those that must be
addressed when divesting a business unit. Given this reality, there is no rigid ‘check-list’ of project
components. Groups will be evaluated on their ability to identify and prioritize arguments and analyses
that effectively convey the value of their vision as a strategic option worthy of consideration by their
firm’s board of directors.

Limit your research to publicly available resources as you investigate the deal

You’ll work on the COMM 3040 project with your assigned spring ICE group. You may not consult or
seek guidance from anyone outside your team (other than faculty) in preparing your deliverables. You
may use any publicly available resources or resources available to UVa students (e.g., through
library databases) for the purposes of your research, as long as you properly cite your sources. Do not
use any proprietary information that you may be able to obtain from personal connections or institutions
outside of UVa.

Follow the project schedule of deliverables outlined in the chart below

We’ve provided due dates and times, and shared the project document early, so you can set aside time in
your personal schedules for key work times on the project and so your groups may work out any
potential scheduling issues as soon as possible. COMM 3040 is only a half semester class; the
accelerated pace of work on your project will require strong project management skills and clear
communication of group schedules and expectations. Put the group-work best practices you learned in
the fall into practice this spring.

Date Deliverable Submission method

Friday, SVC Project Upload a pdf to BB. Email the file to Profs. King, Pentz & White.
March 12, Deck Use the file name protocol: “B#G#--SVC Deck-[company name]-
5pm & required group last names”
appendices.
Monday BOD 23 min Presentation: Use 9-10 min. to present your proposal &
March 15 & Videoconference 13-14 min. for Q&A from faculty, students in the classroom, and
Tuesday. Presentation from students on Zoom--all of whom will be acting as board
March 16 members from your firm. Post your presentation slides to BB by
the start of class time on the day you present. Use the file name
protocol: “B#G#--SVC Presentation-[company name]-group last
names”

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Direct your group’s SVC Project stand-alone deck to the BOD at your firm

With the standalone deck deliverable, you will: present the major conclusions resulting from your
strategic and financial analysis of your firm, detail your proposal to address current problems, and
include how the firm would implement your proposal. Your analysis should use the tools and
frameworks that you have learned in ICE so far and in 3040 in particular. The deck is a send-ahead,
stand-alone “slideument,” which blends the visually focused, brevity of slides with the clear narrative
power of a report document. The deck will contain more information than would be appropriate for a
PowerPoint presentation projected in a room, but it also has “higher skim value” than a written report.
We will build on what you learned this fall when creating your stand-alone slide decks. The deck should
address your analysis in an intelligent, researched, and professionally compelling manner. It should
make your “bottom line” clear, model good design strategies. It should be visually compelling, have
easily accessible arguments, use page design as well as data visualization techniques to clarify meaning,
and keep in mind the needs of your firm’s Board of Directors as your audience.

You may create up to 25 argument slides total for the deck. The 25-slide limit includes: your
executive summary (1 slide in deck slide format), your proposal, your persuasive analysis—both
strategic and financial—in support of your proposal, the implications of your proposal for the firm, the
proposal’s intended implementation and potential risks if appropriate, and of course the data you need
throughout to create persuasive arguments for top corporate decision makers. The deck itself should
also include a final closing slide before the appendices with a brief summary of your key message
points.

You also have 3 required appendices. Since your deck is an in-house document, please include the
following:

1) a detailed financial analysis. Exhibit 1 of this project document provides instructions for how
to build the financial slides required for your deck’s financial narrative (up to 7 your possible
content slides) and specifics of the required financial appendix.

2) the press release your firm would send out announcing the new strategy and providing
information about how to connect to a scheduled videoconference your executive team would
hold to discuss the new corporate strategy (if it were to be approved by the board). The press
release should follow the conventions of press releases as laid out in materials posted to the
course’s BB site. The press release should announce the new corporate focus, provide a brief
logical overview of the key next steps investors can expect. Include a quote from one of the
firm’s key decision makers, and specifics for the corporate video conference your firm would
hold and when. You’ll use a logically appropriate—but fictitious—time, date, corporate
headquarters (real) and manner of access to the videoconference.

3) the infographic your firm would post to its corporate website as an easy way to access key and
supplemental information for the videoconference and press release. Use the visual design
elements and approach to infographics you learn about in class and through the resources posted
to BB. The infographic visually captures the most important facts about your proposal, relevant
data, and follows the narrative you’ve created about the proposed change in corporate strategy.

You may include up to 4 additional appendices of your choice.

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Finally a deck also has typical “framing” slides. The framing slides do not count against the 25 slide
limit or the appendix slide limits. The framing slides should include: a title slide, a forward looking
statement slide, a table of contents slide, a “meet the team” slide (with your current “title,” your
department, your executive headshot, and contact information), any section divider slides, your
endnotes, and works cited, and works consulted slides.

Present the SVC project in a 23 min. PPT presentation via Zoom to, and Q&A with, your BOD

The video conference call will take place fully online or possibly in a hybrid model (of some people on
Zoom and some together in a room). The specifics will be determined closer to the due date so we may
take into account the latest developments regarding your safety and university protocol. You’ll prepare
15-20 slides to use during the call. You should decide which of these slides to use during the
presentation and which to have available to use in response to questions. Like the deck, these slides must
have stand-alone sense slide titles, but they must be simpler in design than the standalone deck.

As with project presentations in the fall, you’ll want to keep informed about any developing firm
information that might require you to update your key messages (slides) quickly and develop answers to
new questions during your videoconference call. You’ll plan any revisions to your messages with the
idea that the audience on your call has also heard the news. You’ll want to be strategic about what new
information you share and when.

COMM 3040 deliverables are 25% of COMM 3040’s grade

The COMM 3040 SVC project represents 25% of your course grade. The breakdown of that percentage
for each deliverable is as follows:

 3040 SVC Deck 15%

 3040 SVC Presentation 10%

The overall quality of your proposal with supportive analyses as conveyed in your SVC deck and SVC
presentation conference call will be graded jointly by the COMM 3040 faculty team—Professors King,
Pentz and White.

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Exhibit 1: Communicate firm valuation information according to the guidance provided

here; specifically, we list key financial elements to include in the financial slides
for any SVC deck focused on non-merger strategies

Financial information can be challenging to present, in both reports and slide decks, because the task
often serves two purposes: to provide a high-level overview and to provide evidence supporting the
veracity of that high-level overview. Investment banks and valuation shops all have their own preferred
templates; to this end, Prof. White shares his recommendations/preferences for your final slide deck
slides and appendix below.

In general, there are seven components in a DCF valuation:

1) Pro forma Income Statements

2) Expected Future Cash Flows
3) Schedule of Future Investments
4) Weighted Average Cost of Capital (WACC)
5) Continuing Value
6) DCF Valuation and Derivation of Share Price
7) Explanatory Notes

The example in Figure 1 to the right applies this

format to the Liston Mechanics case we
discussed earlier this semester. Note that a) the
valuation is nicely summarized on one page, and
b) some elements are missing. The missing
elements are an artifact of the Liston case -- both
pro forma income statement items and WACC
were given, and there was little benefit in
repeating them here. A one-page valuation
concisely allows you to get a handle on your
overall logic. A slide deck walks readers or
online audiences through the logic of central
arguments alongside key financial information
by using easy to access, visually interesting
format. Figure 1: DCF Valuation example using Liston Mechanics—use as a model for
your financial appendix slide for the SVC deck.

If the Liston information were being

communicated in a slide deck, you would need no more than 6-7 slides for the DCF valuation. Vital
explanatory notes can appear at the bottom of the relevant slide allowing for easy reference to your
assumptions.  Numbers alone are rarely sufficient to tell a story effectively; it’s the assumptions
behind your numbers that are either compelling or not. The assumptions they serve to make your overall
analysis uniquely persuasive.
If you are choosing to do a valuation analysis based on market multiples, add in another slide for a
"Lucky Seven" presentation. This is it, though -- no more than seven slides for the financial valuation
portion of the slide deck assignment.