When was the last time you took the time
to step back and sharpen your axe?
A woodsman was once asked, “What would you do if you had just five minutes to chop down a tree?” He answered, “I would spend the first two and a half minutes SHARPENING MY AXE.”
Let’s start!
The Importance of Strategy
A well-formulated and executed strategy establishes the foundations against which the organization can create, monitor and measure their success. Yet, many people find strategy and its purpose difficult to articulate. Why is strategy important? Strategy is fundamental to the success and sustainability of any organization for the following reasons:
Understanding your organization and sector
Strategy allows organization to develop a clearer understanding of themselves and what is required for them to succeed. It helps organization understand their core capabilities, identify and address weaknesses and mitigate risks. It can help organization better design themselves so that they are focusing on the right things that are most likely to deliver the best performance now and in the future.
Growing in a changing world
Understanding what is taking place within the external environment is important to preparing a fitting strategy, because if you don’t adapt you die. Even successful organization need to realize that what made them successful today is not what will make them successful tomorrow. With the rate of change becoming faster every year, it is increasingly important that we understand what trends are going to impact our sector, and how we are going to respond to them.
Creating a vision and direction for the whole organization
All organization and their staff need to understand their purpose, their destination and the course they are taking to get there. An organization without a strategy is akin to sending your staff into the desert and leaving them to follow mirages in search of water. Without a destination and focus in mind your staff will wander aimlessly from one activity to the other never knowing what to focus on or how to prioritise.
Providing an organization with a common purpose, goals and a set of actions to reach said goals ensures that everyone is working for the same outcome (your organization’s success) and that time and resources are being allocated to the same goals and objectives. Simply put, it streamlines your business and ensures every dollar and minute you spend on the business is in the direction of your sustained success.
While strategy can be difficult for many organization to commence, its benefits are far-reaching and many. From creating new business opportunities, to streamlining the operations and engaging staff, a well-formulated strategy will enable increased growth, productivity and profit both now and into the future.
Whether political, social or technological, we need to identify what changes are going to affect our activities. And we need to know how our organization can respond to them. It enables us to find opportunities for growth and it can help us identify and respond to changes that could make us extinct.
In the same way that the motor vehicle put many horsewhip makers out of business, it is important that you understand what can affect you both in the short term and long term.
Our Approach
Analyses & Solutions
A solution from Strategika is based on a careful analysis of the drivers and levers of the full scope of all the different perspectives, and also of the factors that may otherwise be forgotten and that may backfire later. Our solutions deliver the maximum desired effect with the least effort, using the minimum of resources. It is the solution that is as effective as it is efficient.
Independence of mind
Independent thinking is another core attribute required for an objective situation analysis, the starting point for elegant solutions. We do not roll out standard approaches, as every client situation is unique and has a different context. As our clients do not follow “me too” strategies, they need sparring partners who are not afraid to put forward unconventional approaches, often derived from other environments where they have been proven.
Broad perspective
The fact is that in today’s networked society most factors are interrelated and the best path of evolution is one that is able to consider and balance these in a skilled way. We locate these influencing factors, challenge conventional thinking, and help you see more. This is the key to finding an elegant solution.
The principle of effectivity
Effectivity is about doing the right things, about engaging with the right path, and about lowering the risk of heading in the wrong direction.
At the beginning of an endeavor, there are many options and costs are low; changing course at this stage is not expensive. As time goes on, costs increase rapidly, options decrease and the cost of correction becomes very high.
This is why strategies and projects need to be thoroughly challenged in the set-up phase. The quality of analysis at this stage will inevitably drive the cost of implementation positively or negatively.
We will bring all the necessary skills and experiences together to make sure the principle of effectivity is respected.
What We Do
We work to assist the leadership teams of organization in making the best choices they can to improve the outcomes of their organization for the future.
Assisting a team starts with defining the future outcomes desired. Once the outcomes are identified they are clarified with a series of metrics and targets: this is all about defining the goals and putting them into clear measurable terms and timelines. For us it is very important to work with the team to ensure the objectives are not only desired, yet are actually able to be reached and are within the guidelines and beliefs of the organization, their customers, and the ethical and legal frameworks the organization works within.
We help to build the best possible program including a step by step plan from A to Z for the proposed change and the plans of precisely how we will get there. This includes not only assisting with the processes necessary to design a plan but also is about focusing on the most relevant areas where risks need to be addressed, where information needs to be clarified, where the credibility of the plans need strengthening, and quantifying what the outcomes will look like and when, as well as assessing the investments required and when they will most reasonably produce results.
Strategika provides highly personal and hands-on advisory services to companies’ senior management teams and business owners. Inspired and energized by their entrepreneurial spirit and stamina, we endeavor to bring these same characteristics together with our expertise to work collaboratively on our client’s objectives.
Most of our work is tailored or bespoke in nature – we understand our client’s businesses intimately because we work one to one with the business owners and most senior executives. The common objective is to create value and realize a return on years of hard work and entrepreneurship. Our stewardship of these companies is a responsibility we take with the highest care. Knowing that our advice has a direct impact on the client’s wealth is something that creates and sustains a level of engagement that is both demanding and energizing.
Our services are called on at many different stages of a company’s lifecycle. These include:
- Business establishment
- Growth planning
- Shareholder entry/buy out
- Fund raising
- Business exit
Often we are referred to our clients by their accountants, lawyers and other advisers. We value the trust placed in us very highly and seek to not only service the client to the highest standards, but to also enhance the relationship between the client and referring party. We find that outlook is successful for all parties and results in future referrals – this is the life blood of our business. Naturally, we collaborate and communicate closely with our referring parties in the client engagements referred.
While some standardized processes are required, the majority of our work is based on the highly specific requirements of the companies. Ultimately, we see our greatest differentiation as being a high value adding provider of bespoke corporate advisory advice that is cost effective and compelling for business owners.
Peter Drucker once said, “The greatest change in the way business is being conducted is the accelerating growth of relationships based not on ownership but on partnership.” Like many of Drucker’s insights through the years this one holds true. Many executives, under pressure to find growth in emerging economies or in adjacent industry sectors, are finding that going at it alone or pursing a merger or acquisition is either undesirable or untenable. Instead, they are opting to join forces with a partner via a business partnership.
The 2023 McKinsey survey CEOs’ choice for growth: Building new businesses further validates this emerging trend, finding that “While nine in ten respondents say their organizations have used external partnerships at least to a small extent when scaling their new businesses, respondents from successful builders are nearly twice as likely as others to report using partnerships to a great extent in new-business building.”
Business partnerships are rapidly changing the corporate landscape. They can range from limited licensing or trading agreements to large-scale business alliances involving significant amounts of capital expenditures, management commitment and staffing resources. Business partnerships are becoming core to strategy in a time when innovation capacity will determine future growth prospects and even relevance for many of today’s mainstream businesses.
No company, neither small and mid-sized enterprises nor major corporations, remains untouched by the alliance phenomenon. In the case of smaller-scale companies, alliances are the most common means to confront the challenges of new markets or to undertake intensive technology projects. Larger companies turn to alliances with other organizations in order to jointly carry out activities that lie beyond their core competencies, with a view to increasing their competitiveness or gaining a foothold in markets that prove difficult to access for structural reasons. This is the case, for instance, of some media conglomerates whose global ambitions run parallel to a need to adapt to local or regional consumer preferences.
As competition and market changes intensify, we are likely to see a growing number of companies embracing business partnerships due to the ease with which they can deliver a range of benefits. Organizations that master the art of rapidly and smoothly entering into these types of arrangements will enjoy significant competitive advantage.
Our Services
Strategika can support you from pre-deal strategy and partner identification through to implementation and governance to power up your business partnership. We have global resources to connect you with local relationships and knowledge so that you have a full understanding of the strategic and operational implications of creating and setting up a business partnership. We also help you understand the implications of the business combination on your entire business and ensure your long-term maintenance and exit strategies are an early consideration in the creation phase.
Our integrated team of specialists helps you focus on the key questions through the critical stages from creation to operation of a business combination:
- Understanding the strategy: what are the key objectives for entering into a partnership?
- Options appraisal: Where, how and with whom should I partner?
- Opportunity evaluation: What are the risks and rewards and is this the best way to create value?
- Partnership design: What does the partnership need to succeed?
- Deal execution: How can I negotiate the best deal?
- Plan implementation: How should I plan for a successful implementation?
- Powering up: Am I delivering a successful partnership?
Deliver, optimize, or exit are stages of the lifecycle that a business partnership may go through with significant challenges. To meet the objectives of a business alliance often requires close management of sensitive relationships (often across cultures and borders), in addition to the usual contractual and operating challenges of a business. Using a non-traditional, tailored approach to meet your needs, we can help to preserve maximum value throughout the lifecycle.
Joint venture brokering is the act of putting together an arrangement of mutual benefit between two or more businesses who have complimentary resources.
More and more businesses are entering into joint ventures (JVs). A 2024 Boston Consulting Group research, Capturing the Value of Joint Ventures, found that “business leaders now consider JVs more important than ever, with one in two respondents now saying they believe JVs are becoming more relevant than traditional M&A to their companies’ strategies. A majority (60%) said that compared to outright acquisitions, JVs are more resilient vehicles in times of economic downturn, while 58% said the current geopolitical landscape favors establishing JVs over M&A.”
Joint ventures are poised to continue to grow in the coming years, as interest in corporate partnerships grows. In that research, BCG notes that “JV activity has remained strong over the past two decades, rebounding after the financial crisis and the pandemic shook global markets. The resilience to date may be, in part, a function of the advantages that joint ventures present.”
Not surprisingly, the more experience companies have with joint ventures, the more likely they are to use them. In its JV Survey 2023, BCG found that “Business leaders have also become more satisfied with the level of value creation they are achieving from JVs than they were ten years ago. The vast majority (92%) said they had received at least as much value from their JVs as they contributed, versus 74% in 2014. What is particularly noteworthy is that the level of satisfaction with JVs has nearly converged with that of M&A deals.” Those are promising indicators for companies currently managing joint ventures or contemplating new ones, though there is plenty of room for improvement: “83% of respondents still feel there is room for further improvement—a figure that remains very material even if lower than in 2014, when 92% reported that the value created by their JVs could be better.”
The beauty about a joint venture is that the parties involved get to leverage the strengths their partners bring to the table. But any joint venture is a new third entity created and has to have its own strategy in the same way that any business or business unit does.
Here are some of the drivers behind the surge in interest around JVs:
Access to new/emerging technologies and strengthening innovation: Companies often use alliances to quickly secure new technology and strengthen innovation.
Access to new geographic markets/entry point for emerging markets: The increasing difficulty of rapidly gaining a presence in high-growth and emerging markets, combined with escalating execution risk and regulatory/operational issues, has led to a dramatic rise in the use of alliances in new or emerging markets. In fact, for some emerging markets—China in particular—the only way to gain entry is by partnering with a local company.
Access to new customers: Building and growing a loyal customer base is important to any business. But as competition intensifies, getting through to new customers can be a challenge. Strategic alliances like JVs provide partners with a ready-made and receptive audience.
Access to talent: As companies expand into new areas or develop new products and services, some of the skill sets they need may be in short supply. Rather than training internal personnel – or, worse yet, becoming bloodied in the war for talent – companies may opt to enter into an alliance with a partner rich in required capabilities.
Strengthening brand or reputation: Joining forces with a partner that has a significant reputation in a particular area is a good way to gain “brand equity by association.” It is important to note however that the reverse can also be true…meaning thoroughly vetting your potential partners is a critical step in the alliance journey.
Sharing of risks and resources: Certain alliances are motivated by the need to divide up what are often significant upfront product development risks. They also provide a way for companies to share scarce functional expertise or resources.
Access to new industries: As boundaries of industries blur and converge, CEOs expect cross-industry competition to accelerate. An insight from a PwC’s 2016 CEO Survey: nearly a quarter of CEOs said their business had entered or had considered entering the tech sector within the past three years. But jumping into a new industry can be risky. Joining forces with a partner is one way to test the waters and develop capabilities without having to build them from the ground up.
Our Services
Bringing JV expertise and hands on experience to bear from pre-deal strategy, through negotiation, valuation and implementation planning helps turn a win-win situation and a good deal on paper into something which can sustainably deliver in practice.
We at Strategika
- look for hidden or under-utilized assets within a company;
- create marketing opportunities that are either unrealized or unrecognized;
- exploit customer lists that are not maximized;
- identify relationships that can be optimized;
- determine the type of resources the client needs;
- work with the client to determine what can be offered to joint venture partners who have the aforementioned resources;
- actively and proactively find joint ventures partners, acting as a facilitator of trust between parties.
Also, we can be appointed to just set up the deal.
Tipically Strategika gets involved in:
- Highlighting pros and cons of potential structures to inform decision-making;
- Testing the deal to see how it copes with a range of “what if” situations;
- Advising on specific cultural, regulatory and political hurdles and risks in certain countries;
- Facilitating the agreement of key principles to inform early negotiation and governance;
- Managing the interconnected steps to get to a signed Memorandum of Understanding;
- Designing the venture and developing a robust implementation plan;
- Developing a range of potential exit strategies to inform the detail of the JV agreement.
Some of the roles Strategika can be called on to perform as a joint venture broker, include:
- Managing the complete joint venture;
- Planning the joint venture;
- Reviewing terms of service for the project;
- Consulting with clients on joint venture partners;
- Day-to-day operation, support and advice on the joint venture;
- Reviewing and assessing products/services from a marketing perspective;
- Locating, analyzing and recruiting top producing joint venture partners;
- Screening, reviewing and approving potential joint venture partners;
- Monitoring and motivating underperforming joint venture partners;
- Maintaining contact with joint venture partners, handling all emails/calls;
- Working with joint venture partners on improving conversions;
- Reporting issues and resolving potential problems.
Strategika Consulting is an exploratory venture specializing in high-impact international business for Percipio Group
STRATEGIKA CONSULTING
C/O PERCIPIO GROUP
Largo del Nazareno, 8/11 – 00187 Roma, Italy
info@strategika.consulting