CORPORATE DEVELOPMENT
Corporate Development refers to the
planning and execution of a wide range of strategies to meet specific
organizational objectives.
The kinds of activities falling
under corporate development may include initiatives such as recruitment of a
new management team,
1.
Plans for phasing in or out of certain markets or
products,
2.
Considering a partner for a strategic alliance,
3.
Establishing relationships with strategic business
partners,
4.
Identifying and acquiring companies,
5.
Securing financing,
6.
Divesting of assets or divisions,
7.
Increasing intellectual property assets and so on.
There is no formula for "corporate development" and the activities
encompassed are often the role of the CEO
or other executives or experienced business consultants. However, particularly in larger companies, corporate development is provided as a charter for a particular executive or team.
In these cases, the opportunities and initiatives are numerous enough to justify specialists, instead of being delegated to the office of the CEO and line of business executives.
When focused on product or financial issues, corporate development executives often have MBA, CFA or CPA credentials.
Often the internal corporate development executives come from a legal background, due to the complex contractual issues associated with many transactions.
The process of corporate development can also be applied to the task of growing the company through mergers and acquisitions.
In this scenario, the project development will involve identifying potential target companies for acquisitions or unions resulting in a new and more aggressive corporation.
The team will consider all possible outcomes from any given potential merger or acquisition and attempt to project if the action is likely to result in positive growth or could possibly impair the company permanently.
One of the manifestations of corporate development has to do with reshaping the management arm of the corporation.
This may involve a process of phasing certain management positions out of the existing structure or creating new positions in an effort to strengthen the management team.
As part of this type of approach, corporate development may also demand that one or more current managers are released from the company and replaced with people who possess skills required to move the company forward.
When this is the case, the corporate development team will handle the functions of recruitment and evaluation of potential hires.
Just as a management team may be revamped, corporate development may also be employed to change the current focus for clients.
This may mean looking into the potential for breaking into new markets with existing products or developing complementary products that will allow this type of expansion.
Corporate development strategy would monitor the trends associated with a corporation's products or services and helps the corporation establish strategies to find more customers.
In addition, corporate development works to maximize the profits of a corporation by figuring out the appropriate pricing for a given good or service.
A corporate development team also
leads discussions with sales department heads regarding how to
1.
Market corporate goods,
2.
Organize marketing campaigns,
3.
Analyze market research and
4.
Incorporate any customer advice or
5.
Complaints into marketing strategies in such cases;
6.
Extensive industry specific business experience is
often preferred which is why companies may hire an external firm to help them
engage in such moves.
Depending on the status of the base market, corporate development may also
look at shifting away from a shrinking consumer market while seeking market
share in a different consumer market with newer products.For example, many typewriter manufacturers during the 1980s and 1990s slowly phased out their core business and began to focus more on computer parts and accessories as a way to continue operations.
Process
There is no one tried and true formula for the process of corporate development.The actual structure of the corporate strategy will depend greatly on the current circumstances of the company and the area where the development is desired.
In most cases, the process will not be of short duration;
Corporate development is usually a process that takes place over an extended period of time and
May be adjusted or refined as the project moves forward.
Companies with large corporate development groups
Some
notable large corporations with active Corporate Development teams include:
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