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Corporate Development: Typical Challenges for Companies
March 27, 2019

Corporate Development as Business Process to Drive Value

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Framework for Corporate Development

Corporates have various reasons to drive corporate development. Some are triggered via digitalization, changes in market and/or customer demands. Others are influenced by the change in labour market trends.
Warren Buffett summarizes “it is all about competitive advantage, not only for today and tomorrow but for the next 10 or 20 years from now” the objective of corporate development to shape companies future.

It is all about competitive advantage, not only for today and tomorrow but for the next 10 or 20 years from now.

Warren Buffett

However, in a more and more dynamic environment driven by volatility, uncertainty, complexity and ambiguity it becomes difficult to get a clear and reliable vision on future developments.
Again and again assumptions have to be made and tested in reality. The cycles to do so become shorter and the range of options becomes larger. On the other hand, most changes are creeping but continuous and most seem disruptive only if ignored.

Stages of Corporate Development

The conditions mentioned before mean that corporations know why they need to evolve. There are also clear ideas and measures for what should be done. One of the most important models for such measures is that of Bleicher (Hohmann “Methoden der Unternehmensentwicklung”, 2012). This distinguishes six stages, from the pioneering phase, through market development to diversification. Here, companies are able to grow out of their own resources.

In the course of external corporate development, companies can merge with others via M&A activities or cooperations. Last but not least, as part of the restructuring process, the company may shrink or be split up into individual parts and sold.

Problems and Challenges within Corporate Development

As described above, the complexity in the enterprise development arises, by a higher number of activities, more and more persons/partners involved and, at the same time, rather smaller volumes and shorter cycles. This brings current approaches to their limitations.

These may be grouped into:
  • Value: No transparency and success measurement, customer change/market needs often missed.
  • Speed: Manual work, uncoordinated different internal and external activities, duplication, internal resistance.
  • Scale: too late involvement of employees, information islands, the too narrow focus of possible alternatives. No evaluable database.

Corporate Development in times of Digitalization

For the reasons mentioned above, those responsible in Corporate Development questioned, value the support through an integrated software solution benefits, that maps the entire process of enterprise development and thus leads to more agility.
Thus theory, e.g. also Hagen, Müller and Wieben (2018) describe that changes are faster and often unpredictable, especially in times of digitization. Therefore, in the course of developing their corporate strategy, it is expedient for companies to reach a digital maturity as quickly as possible.
(Source: Hagen, Müller, Wieben: "Corporate Development and Strategic Corporate Management")

A digitally supported Process in Corporate Development

Besides science even well-known strategy consultancies e.g. The Boston Consulting Group (2018, Most Innovative Companies Report: "Whichever path they take, ... companies want to digitize their innovation operations processes ..."), describe the need to establish a digitally supported and continuous business process in the company's corporate development.
The target is continuously developing and validating alternatives for action, to improve internal processes, design new or better offers for customers as well as to find new markets.

This process involves a wide variety of employee groups, data is processed by external service providers up to strictly confidential information handling. In addition, from a company's point of view, company development is important, but from an employee's point of view, it is often not urgent compared to their other activities.

Corporate Governance guides Corporate Development

For more complexity, there are requirements from the corporate governance environment to control, document and understand the corresponding measures and steps along the internal guidelines.

Requirements for digitized Corporate Development

From this complex requirement profile, the following key functionalities result in a corresponding solution:

  • Implementation of the internal data protection guidelines including data retention
  • requirements for confidential information
  • Simple operation but the right information at the right time.
  • Easy integration of internal and external stakeholders
  • Central entry point for all functions and information
  • Mapping and monitoring the entire process of enterprise development
  • Open interfaces for the integration of information sources and IT systems
  • Audit Trail Ability to understand all actions

The basic procedure model for the introduction is influenced by the current status of the company development as well as its objective. Basically, this can be from bottom to top, e.g. Start in an area such as Innovation Office or Top Down based on the management e.g. as a building block of a cultural change.

This results in different requirements and an increased internal need for coordination. It is advisable to use external consulting know-how for definition and moderation in order to focus on the objective (reduce costs, increase sales, secure positioning) and to involve and take along the employees.


In order to shape the future and companies, continuous development is necessary. On the one hand, this requires alignment, control and constant adjustments (see also Corporate Development, Melzig-Thiel, Joos).

In order for the increasingly division-based process, with a wide variety of stakeholders, which must be controlled and corporate governance requirements, to function sustainably, digital support makes sense.

Strong innovators understand, that successful digital transformation requires excelling in three fundamental areas: speed, scale, value.

Boston Consulting Group (2018)

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