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Growth Team Membership 2010 Corporate Strategy and Corporate Development Priorities Survey Results
 

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Growth Team Membership 2010 Corporate Strategy and Corporate Development Priorities Survey Results.

Growth Team Membership 2010 Corporate Strategy and Corporate Development Priorities Survey Results.

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    Growth Team Membership 2010 Corporate Strategy and Corporate Development Priorities Survey Results Growth Team Membership 2010 Corporate Strategy and Corporate Development Priorities Survey Results Presentation Transcript

    • Growth Team Membership™:2010 Corporate Strategy and Corporate Development Priorities Survey Results June 2010 Contact us at GTMResearch@frost.com
    • What is Growth Team Membership™?Growth Team Membership™ (GTM) is an annual subscription program that offers research, events and services designed toincrease the effectiveness, productivity, and impact of executives in the functions that support the CEO’s growth strategy. Growth Team Membership™ Research. 2
    • Table of Contents PageSection 1: Survey Purpose and Respondents 4Section 2: External Factors Shaping Corporate Strategy andCorporate Development 2010 Strategies 5 Section 2.1: By business model 6Section 3: Key Corporate Strategy Challenges 9 Section 3.1: By business model 13Section 4: Corporate Strategy Effectiveness and Sociopolitical Issues 14 Section 4.1: By business model 15Section 5: Key Corporate Development Challenges 25 Section 5.1: By business model 29Section 6: Corporate Development Effectiveness and Activities 30 Section 6.1: By business model 32Section 7: Corporate Strategy and Corporate DevelopmentRespondent Demographics 39 The content of these pages are © 2010 Frost & Sullivan. All rights reserved. Growth Team Membership™ Research. 3
    • Survey Purpose and RespondentsResearch ObjectiveTo understand the most pressingexternal and internal challengesshaping corporate strategy andcorporate development executives’2010 planning.MethodologyWeb-based survey platformSurvey PopulationTarget respondents were Managerlevel and above corporate strategyand corporate developmentexecutives from companies There were 62throughout North America, Latin surveyAmerica and Europe. respondents Note: Due to small response rates, the Americas and European surveys were compiled for this report. Growth Team Membership™ Research. 4
    • External Factors Shaping Corporate Strategy and Corporate Development Strategies Growth Team Membership™ Research. 5
    • Top Three External Factors KEY TAKEAWAY: Corporate Strategy and Corporate Development plans are heavily influenced by customer shifts and competitor activities Need for product/service innovation and 24% capabilities Intensifying competition 15% Changes in customer buying behavior 15% 0% 25% 50% Survey Question: Please indicate the three business environment factors that have the most impact on your 2010 corporate strategy and corporate development plans.N = 54 Growth Team Membership™ Research. 6
    • External Factors Impact on Corporate Strategy and Corporate Development KEY TAKEAWAY: The after affects of the economic downturn—intense competition and changes in customer buying behavior—are negatively affecting plans for 2010. Positive Impact Negative Impact 100% 88% 69% 63% 50% 0% Need for product/service innovation Intensifying competition Changes in customer buying behavior and capabilities Survey Question: Please indicate the impact that each of the following forces have on your 2010 corporate strategy and corporate development plans.N =54 Growth Team Membership™ Research. 7
    • Top Three External Factors (By Business Model) KEY TAKEAWAY: There is a high level of variability among the top external challenges by business model. B-to-B B-to-C Hybrid 1 Intensifying Competition Tapping into Global Market Opportunities Adjusting to the Economic Downturn Need for Product/ Changes in 2 Service Innovation and Capabilities Changes in Customer Buying Behavior Government Regulation Need for Green/ 3 Tapping into Global Market Opportunities Sustainability Initiatives Intensifying CompetitionN = 54 Growth Team Membership™ Research. 8
    • Key Corporate Strategy Challenges Growth Team Membership™ Research. 9
    • Key Corporate Strategy Challenges SnapshotAll Companies B-to-B Companies B-to-C CompaniesTop three challenges: Top three challenges: Top three challenges:1 Developing effective 1 Developing effective 1 Balancing demands for strategy implementation strategy implementation short-term profit with long- plans plans term strategic goals2 Aligning financial and 2 Aligning financial and 2 Pinpointing risks to future strategic objectives strategic objectives revenue growth3 Identifying new and viable 3 Managing and 3 Creating a more agile organic growth implementing a global annual strategic planning opportunities business strategy process Growth Team Membership™ Research. 10
    • Top Five Key Corporate Strategy Challenges KEY TAKEAWAY: Corporate Strategists’ key issue is perennial: implementing their strategies effectively. Challenge 1 Developing effective strategy implementation plans (20%) Challenge 2 Aligning financial and strategic objectives (18%) Challenge 3 Identifying new and viable organic growth opportunities (12%) Challenge 4 Balancing demands for short-term profit and long-term strategic goals (12%) Developing a system to examine strategy progress and impact, and to give early Challenge 5 warning of problems in strategic initiatives (13%) Survey Question: Please indicate the top five challenges shaping your corporate strategy decision-making in 2010.N = 35 Growth Team Membership™ Research. 11
    • Root Cause of Top Five Corporate Strategy Challenges KEY TAKEAWAY: Process and staff are cited as the predominant root causes of Corporate Strategy’s challenges. 100% Staff Staff 25% Staff 33% 33% Staff Staff 50% 57% Process 50% 50% Process Process 67% 67% Process Process 50% 43% Technology 25% 0% Developing effective Aligning financial and Identifying new and Balancing demands Developing a system strategy strategic objectives viable organic growth for short-term profit to examine strategy implementation plans opportunities with long-term progress and impact, strategic goals and to give early warning of problems in strategic initiatives Survey Question: For the top five challenges you selected above, please indicate whether the root cause of the challenge is staff, technology, or process.N = 35 Growth Team Membership™ Research. 12
    • Top Three Corporate Strategy Challenges (By Business Model) KEY TAKEAWAY: Key corporate strategy challenges remain the same—but vary in their prioritization between business models. B-to-B B-to-C Hybrid Developing effective Balancing demands for Developing effective Challenge 1 strategy implementation short-term profit with long- strategy implementation plans term strategic goals plans Challenge 2 Aligning financial and Pinpointing risks to future Pinpointing risks to future strategic objectives revenue growth revenue growth Managing and Creating a more agile Balancing demands for Challenge 3 implementing a global annual strategic planning short-term profit with long- business strategy process term strategic goalsN = 35 Growth Team Membership™ Research. 13
    • Corporate Strategy Effectiveness and Sociopolitical Issues Growth Team Membership™ Research. 14
    • Corporate Strategy Sociopolitical Issues and EffectivenessSnapshotAll Companies B-to-B Companies Hybrid Companies Rank their corporate strategy Rank their corporate strategy Rank their corporate strategy effectiveness as “above average” effectiveness as “above average” effectiveness as “above average” Environment/Sustainability is the Environment/Sustainability is the Environment/Sustainability is the primary primary sociopolitical issue affecting company strategy primary sociopolitical issue affecting sociopolitical issue affecting company company strategy strategy Green Innovation is the primary focus of their sustainability Green Innovation is the primary Corporate Social Responsibility is the initiatives focus of their sustainability initiatives primary focus of their sustainability initiatives Expect their staffing levels to Expect their staffing levels to stay stay the same in 2010 the same in 2010 Expect their staffing levels to stay the Expect their budgets to stay the same or increase moderately in 2010 same in 2010 Expect their budgets to stay the same in 2010 Expect their budgets to increase moderately in 2010 Note: Due to small response rates, there are only data available for B-to-C Respondents on some of the questions. Growth Team Membership™ Research. 15
    • Corporate Strategy’s View of Its Effectiveness (By Business Model) KEY TAKEAWAY: The majority of corporate strategists consider their function’s effectiveness to be “above average”. All Companies B-to-B Companies Below Average Below Average 4% Exceptional 6% Exceptional 9% 8% Average Average 34% 36% Above Average Above Average 50% 52% Hybrid Companies Below Average Exceptional 16% 17% Average 17% Above Average 50% Survey Question: Please assess the overall effectiveness of your corporate strategy function compared to those in other firms within your industry.N = 32 Growth Team Membership™ Research. 16
    • Top Three Sociopolitical Issues and their Primary Benefit KEY TAKEAWAY: Respondents are including environmental/sustainability issues in their corporate strategy to create new market opportunities. Sociopolitical Issue Primary Benefit 1 Environment/Sustainability (45%) New Market Opportunities (64%) 2 Corporate Social Responsibility (24%) Enhanced Company Reputation (100%) 3 Local Community Development (11%) Enhanced Company Reputation (100%) Survey Question: Please indicate the top three sociopolitical issues influencing your corporate strategy in 2010 and indicate the primary benefit—operational efficiencies, brand loyalty, enhanced company reputation, new market opportunities, avoiding regulatory risks, or workforce efficiencies.N = 31 Growth Team Membership™ Research. 17
    • Top Three Sociopolitical Issues (By Business Model) KEY TAKEAWAY: Regardless of business model, there is little variation in the sociopolitical issues influencing company strategies in 2010. B-to-B B-to-C Hybrid 1 Environment/ Sustainability Healthcare Initiatives Environment/ Sustainability 2 Outsourcing Corporate Social Responsibility Corporate Social Responsibility Ethical standards for 3 Corporate Social Responsibility Advertising and Marketing OutsourcingN = 31 Growth Team Membership™ Research. 18
    • Ownership of Sustainability Program (By Business Model) KEY TAKEAWAY: The CEO is typically the primary owner of their companies’ sustainability programs. The red percentages 60% are for all respondents. 34% 39% 40% 29% 29% 20% 16% 13% 9% 9% 13% 13% 14% 14% 6% 13% 14% 9% 4% 0% CEO Executive Board Sustainability Health, Safety, and Corporate Strategy Operations Department Environment B-to-B Companies Hybrid Companies All Companies Survey Question: For your company, please indicate who has primary responsibility for sustainability initiatives.N = 32 Growth Team Membership™ Research. 19
    • Top Three Focus Areas for Sustainability Initiatives KEY TAKEAWAY: There is only marginal difference between the ranking of top three initiatives. Sustainability Initiative 1 Green Innovation (20%) 2 Government Regulation Compliance (18%) 3 Corporate Social Responsibility (18%) Survey Question: Please indicate the Top Three key focus areas for your organization’s sustainability initiatives.N =30 Growth Team Membership™ Research. 20
    • Top Three Focus Areas for Sustainability Initiatives (By Business Model) KEY TAKEAWAY: Given the consumer marketplace B-to-C and Hybrid companies’ serves, it’s unsurprising that these firms are prioritizing corporate social responsibility for their sustainability initiatives. B-to-B B-to-C Hybrid 1 Green Innovation (23%) Corporate Social Responsibility (100%) Corporate Social Responsibility (29%) 2 Product Life Cycle Assessment (20%) Recycling (100%) Alternative Energy(29%) 3 Corporate Social Responsibility (20%) Community Development (100%) Climate Change (29%) Survey Question: Please indicate the Top Three key focus areas for your organization’s sustainability initiatives.N = 30 Growth Team Membership™ Research. 21
    • 2010 vs. 2009 Budgets (By Business Model) KEY TAKEAWAY: Respondents forecast little to no change in their budgets for 2010. All Companies B-to-B Companies Decrease Decrease Substantially Increase Substantially 3% Substantially 3% 4% Decrease Decrease Moderately Moderately 16% 14% Increase Increase Moderately Moderately 36% 41% Stay the Same Stay the Same 42% 41% Hybrid Companies Increase Substantially 14% Decrease Moderately 28% Increase Moderately Stay the Same 29% 29% Survey Question: In comparison to 2009, your 2010 corporate strategy budget will:N = 32 Growth Team Membership™ Research. 22
    • 2010 vs. 2009 Staffing Plans (By Business Model) KEY TAKEAWAY: Corporate Strategists indicate their staffing levels will remain static in 2010. All Companies B-to-B Companies Decrease Decrease Increase Substantially Substantially Decrease Substantially 4% 10% Moderately 3% Increase Decrease 4% Moderately Increase Moderately 6% Moderately 31% 25% Stay the Same Stay the Same 56% 61% Hybrid Companies Increase Decrease Substantially Substantially 14% 29% Increase Moderately 14% Decrease Moderately Stay the Same 14% 29% Survey Question: In comparison to 2009, your 2010 corporate strategy staff will:N = 32 Growth Team Membership™ Research. 23
    • Anticipated Company Performance in 2010 (By Business Model) KEY TAKEAWAY: Regardless of business model respondents predict an increase in their company’s performance in 2010. All Companies B-to-B Companies Decrease Decrease Increase Substantially Increase Substantially Substantially 4% Substantially Decrease 3% Decrease 10% 10% Moderately Moderately 10% 14% Stay the Same Stay the Same 10% 5% Increase Increase Moderately Moderately 67% 67% Hybrid Companies Increase Substantially Stay the Same 14% 29% Increase Moderately 57% Survey Question: In comparison to 2009, your company’s performance by the end of 2010 will:N = 30 Growth Team Membership™ Research. 24
    • Key Corporate Development Challenges Growth Team Membership™ Research. 25
    • Key Corporate Development Challenges SnapshotAll Companies B-to-B Companies B-to-C CompaniesTop three challenges: Top three challenges: Top three challenges: 1 Identifying promising new 1 Identifying promising new1 Identifying promising new targets before competitors targets before competitors targets before competitors 2 Aligning acquisition 2 Creating a robust end-to-end2 Aligning acquisition strategy with corporate process for post-merger/ strategy with corporate strategy acquisition integration strategy 3 Identifying the appropriate 3 Creating a process to3 Creating a robust end-to- level of integration for an systematically assess the end process for post- acquisition strategic fit of businesses in merger/acquisition the corporate portfolio integration Growth Team Membership™ Research. 26
    • Top Five Key Corporate Development Challenges KEY TAKEAWAY: Corporate Development’s top challenges are on issues surrounding M&A activity and strategic partnerships. Challenge 1 Identifying promising new targets before competitors (29%) Challenge 2 Aligning acquisition strategy with corporate strategy (14%) Challenge 3 Creating a robust end-to-end process for post-merger/acquisition integration (16%) Creating a methodology for identifying and evaluating the “right” strategic Challenge 4 partners (17%) Challenge 5 Improving integration team’s change management capabilities (13%) Survey Question: Please indicate the top five challenges shaping your Corporate Development decision-making in 2010.N = 28 Growth Team Membership™ Research. 27
    • Root Cause of Top Five Corporate Development Challenges KEY TAKEAWAY: Process and staff are the primary root cause of Corporate Development’s key challenges. 100% Staff Staff 29% 25% Staff Staff 50% 50% Staff 50% 100% Process 57% Process 75% Process Process 50% 50% Technology 14% 0% Identifying promising Aligning acquisition Creating a robust end- Creating a methodology Improving integration new targets before strategy with corporate to-end process for post- for identifying and team’s change competitors strategy merger/acquisition evaluating the “right” management integration strategic partners capabilities Survey Question: For the top five challenges you selected above, please indicate whether the root cause of the challenge is staff, technology, or process.N = 28 Growth Team Membership™ Research. 28
    • Top Three Corporate Development Challenges (By Business Model) KEY TAKEAWAY: Regardless of business model, respondents are seeking ways to identify new targets before their competitors. B-to-B B-to-C Hybrid Identifying promising new Identifying promising new Aligning acquisition strategy Challenge 1 targets before competitors targets before competitors with corporate strategy Creating a robust end-to- Assessing and balancing Aligning acquisition strategy end process for post- Challenge 2 with corporate strategy merger/acquisition risk across a broad portfolio of acquisition opportunities integration Creating a process to Identifying the appropriate systematically assess the Identifying promising new Challenge 3 level of integration for an strategic fit of businesses in targets before competitors acquisition the corporate portfolioN = 28 Growth Team Membership™ Research. 29
    • Corporate Development Effectiveness and Activities Growth Team Membership™ Research. 30
    • Corporate Development Effectiveness and Activities Snapshot All Companies B-to-B Companies Hybrid Companies Rank their corporate Rank their corporate development Rank their corporate development development effectiveness as effectiveness as “average” effectiveness as “above average” “average” Will focus on reassessing their Will focus on developing strategic Will focus on M&A activities portfolio for inorganic growth and partnerships and expanding into and expanding into emerging expanding into emerging markets in emerging markets in 2010 markets in 2010 2010 Expect their staffing levels to Expect their staffing levels to Expect their staffing levels to stay increase in 2010 stay the same in 2010 the same in 2010 Expect their budgets to stay the same Predict their budgets will Expect their budgets to increase in 2010 increase moderately in 2010 moderately in 2010 Note: Due to small response rates, there is data available for B-to-C Respondents on only some of the questions. Growth Team Membership™ Research. 31
    • Corporate Development’s View of Its Effectiveness (By Business Model) KEY TAKEAWAY: Respondents from hybrid companies are more likely to rate their function’s effectiveness as “above average.” All Companies B-to-B Companies Exceptional Below Average Exceptional Below Average 4% 8% 5% 5% Above Average Above Average 38% 35% Average Average 55% 50% Hybrid Companies Below Average 33% Above Average 67% Survey Question: Please assess the overall effectiveness of your corporate development function compared to those in other firms within your industry.N =24 Growth Team Membership™ Research. 32
    • Corporate Development Portfolio Activities 2010 vs. 2009 KEY TAKEAWAY: The majority of Corporate Development executives predict an increase in M&A activity, strategic partnerships, and expansion into emerging markets in 2010.100% 3% 4% 7%  Decrease Substantially 3%  Decrease Moderately 30% 36% 37% 41% 67% 78% 30% 50% 30% 48% 44%  Stay the Same 40% 26% 19% 11%  Increase Moderately 16% 19% 4% 7%  Increase Substantially 0% Conducting Assessing Establishing Divesting Developing Seeking Acquisitions/ Corporate Strategic Investments Scale and External Mergers Portfolio for Partnerships and Assets Scope in Sources of Inorganic and Joint Emerging Acquisition Growth Needs Ventures Markets Capital Survey Question: In comparison to 2009, your 2010 corporate development activity for each of the following categories will:N = 27 Growth Team Membership™ Research. 33
    • Corporate Development Portfolio Activities 2010 vs. 2009 (By Business Model: B-to-B) KEY TAKEAWAY: Respondents in B-to-B companies predict an increase in activities to reassess their portfolio for inorganic growth, develop strategic partnerships, and expand into emerging markets in 2010.100% 4%  Decrease Substantially 5% 9% 5% 24%  Decrease Moderately 32% 33% 33% 33% 76% 67%50% 29% 47% 43%  Stay the Same 43% 33% 10%  Increase Moderately 21% 24% 14% 10%  Increase Substantially 5% 0% Conducting Assessing Establishing Divesting Developing Seeking Acquisitions/ Corporate Strategic Investments Scale and External Mergers Portfolio for Partnerships and Assets Scope in Sources of Inorganic and Joint Emerging Acquisition Growth Needs Ventures Markets Capital Survey Question: In comparison to 2009, your 2010 corporate development activity for each of the following categories will: Growth Team Membership™ Research. 34
    • Corporate Development Portfolio Activities 2010 vs. 2009 (By Business Model: Hybrid) KEY TAKEAWAY: Corporate Development executives in hybrid companies forecast an increase in developing strategic partnerships and expanding into emerging markets in 2010.100%  Decrease Substantially 40% 40%  Decrease Moderately 60% 60% 80%50% 20% 100%  Stay the Same 60%  Increase Moderately 40% 40% 40% 20%  Increase Substantially 0% Conducting Assessing Establishing Divesting Developing Seeking Acquisitions/ Corporate Strategic Investments Scale and External Mergers Portfolio for Partnerships and Assets Scope in Sources of Inorganic and Joint Emerging Acquisition Growth Needs Ventures Markets Capital Survey Question: In comparison to 2009, your 2010 corporate development activity for each of the following categories will: Growth Team Membership™ Research. 35
    • 2010 vs. 2009 Budgets (By Business Model) KEY TAKEAWAY: Respondents expect their corporate development budgets to increase moderately in 2010. All Companies B-to-B Companies Decrease Increase Substantially Increase Moderately Substantially 7% 7% 10% Stay the Same 43% Stay the Same Increase Increase 41% Moderately Moderately 44% 47% Hybrid Companies Decrease Increase Moderately Moderately 20% 20% Stay the Same 40% Survey Question: In comparison to 2009, your 2010 corporate development budget will:N = 27 Growth Team Membership™ Research. 36
    • 2010 vs. 2009 Staffing Plans (By Business Model) KEY TAKEAWAY: Regardless of business model, corporate development staffing levels will remain static in 2010. All Companies B-to-B Companies Increase Increase Decrease Substantially Substantially Moderately 7% 10% 7% Increase Stay the Same Moderately 52% Increase 30% Moderately Stay the Same 38% 56% Hybrid Companies Decrease Moderately 40% Stay the Same 60% Survey Question: In comparison to 2009, your 2010 corporate development staff will:N = 27 Growth Team Membership™ Research. 37
    • Anticipated Company Performance in 2010 (By Business Model) KEY TAKEAWAY: The majority of respondents are optimistic about their company’s performance in 2010. All Companies B-to-B Companies Decrease Increase Decrease Increase Moderately Substantially Moderately Substantially 8% 16% 20% 20% Stay the Same 16% Stay the Same 20% Increase Moderately Increase 60% Moderately 60% Hybrid Companies Stay the Same 40% Increase Moderately 60% Survey Question: In comparison to 2009, your company’s performance by the end of 2010 will:N = 25 Growth Team Membership™ Research. 38
    • Corporate Strategy and Corporate Development Respondent Demographics Growth Team Membership™ Research. 39
    • Demographics Respondents tended to be from public, B-to-B companies whose 2009 revenue ranged from $1 to $11 billion. Enterprise Type Business Model HybridOver half of the Companyrespondents work in Private 18%a public company. 35% B-to-C Company Public 7% N = 57 58% N =57 B-to-B Company Venture Capital 75% 7% Company Revenue 60% 33% 30% 19% 14% 16% 16% 0% Below $100 million $100 to $499.99 $500 million to $1 billion to $11 More than $11 billion million $999.99 million billion N = 57Survey Question: Please indicate the type of enterprise best represents your organization. Growth Team Membership™ Research. 40
    • Demographics: Top Six Participating Industries Chemicals, Materials, and Food 13% Automotive and Transportation 13% Aerospace and Defense 13% Healthcare and Life Sciences 15%Information and Communication Technologies 19% Energy and Power Systems 24% 0% 15% 30% Survey Question: Please indicate which of these Industry categories best describes you organization (please indicate all that apply).N = 62 Growth Team Membership™ Research. 41
    • Contact UsIf you have any questions or comments, please contact us at GTMResearch@frost.com or visit us at http://www.frost.com/prod/servlet/growth-team.pag Growth Team Membership™ Research. 42