Corporate Development moves from desk work to deal-making as follows:
1. Competitive Position
In which industries is the company active? How is it performing relative to competitors? Thorough background work sets the foundation for a successful strategy. Using off-the-shelf sources such as financial analyst reports can speed the process.
The underlying questions during this phase are:
- Does the company need to re-position itself, or would improved execution be enough?
- If re-positioning, what kind?
2. Strategy Formulation
Strategy formulation involves various tools such as market analyses, industry maps, SWOT assessments and financial modeling.
The final strategy should concisely outline business goals, options to achieve them, recommended actions, investments, expected payouts and timing as well as fallback scenarios.
3. Strategy Execution via Strategic Transactions
Strategic transactions are powerful corporate development tools. They can also be dangerous, leading to loss of shareholder value.
- For acquisitions and strategic alliances success will depend on integration and operational implementation. Working closely with selected line managers and other members of your team ensures their commitment.
- For divestitures a “clean break” is called for. SBDG leads the process after gaining commitment from management of the divestment entity.
SBDG has extensive experience with acquisitions, divestitures, strategic alliances and licensing. The process is different for each type of transaction but the elements below are common to all: