All things have an inherent value that fluctuates with many variables. For example, a fast food place that is working has an inherent value – it is nearly never at 100% efficiency resulting in a 100% possible value. The resulting problem lies in the fact that the value is reliant upon those efficiencies. The risks involved are the employee problem, the structure problem, the services problem and the problems that limits efficiency for example the infrastructure problem. In the problem with the employee, it is linked to the fact that employees more often times than not have different agenda’s than that of management, where the structure problem is the management that is implemented have problems. The services problem is that the utililties used by and for the employees isn’t stream lined nor is it possible to stream line it. The infrastructure problem is simply the problem that is caused by the infrastructure being mismanaged and leading to huge inefficiencies that run down the entire leghnth of the management. This leads to greater efficiency problems and can only be fixed from the top down.
Because of this, all businesses have an intrinsic value. Depending on the industry, market conditions, and other external forces – a business is only worth so much. But, within the same industry, there are internal problems that make the businesses worth more or less based on certain aspects of what is spoken of from above. Analyzing the corporate structure and how these inefficiencies are managed can result in an arbitrage situation where you are able to restructure management and cause an increase in it’s intrinsic value.
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