- Strategic analysis of a company
- Development and implementation of strategies
- Mergers and Acquisitions
- Due Diligence
- Restructuring and management of change
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Strategic analysis of a company: contemporary turbulent environment, creating a great risk for companies operating in it, requires a new approach to management. Each company to function smoothly and be successful should conduct regular tests of their surroundings, so that on time recognize and avoid hazards arising from it, as well as make use of emerging opportunities. Strategic management, including strategic analysis is an example of the proper approach to the new challenges set by the environment of the company. Strategic analysis is a comprehensive assessment of the external and internal factors specifying current condition and development potential of the company, which consists of:
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study of the organizational and operational potential of the company: diagnosis of the current state and the potential of the company, strategic balance, analysis of key success factors, value chain analysis, product life-cycle analysis, analysis of human resources and other,
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study of the financial potential: balance sheet analysis, analysis of profit and loss account, cash flow analysis, analysis of efficiency use of current assets, analysis of rate of return on assets, return on investment analysis. These activities are supported by workshops for key workers from the financial management field,
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the study of macro-environment of company: a study of macro-economic factors: political, legal, economic, demographic, social, technological, in which the organization operates,
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study of micro-environmental factors (sector) of the company: analysis of competitors and the competitive structure, customers and demand, suppliers, partners, substitutes, and also assess of the industry attractiveness based on the parameters observation determining the profitability and risk for all industries, as well as on the basis of various factors influencing the degree of attractiveness of the industry: formal barriers, capital and other inputs to the market.
Strategic analysis (diagnosis strategy) - the most common mistakes:
- excluding the stage of strategic analysis,
- too narrow perspective of analysis,
- unreliable analysis,
- bad choice of diagnostic tools,
- too many diagnostic tools used.
Development and implementation of the strategy: strategic thinking has many dimensions. One of them is the ability to look from the place where our company is at present into the future – to a place where we want our company to be. Second, look from a distance on the company so as to be able to see all of its elements, not just fragments. Strategic management is a way of management, using strategic thinking, which links the current position and future situation of the company with future position. And it all boils down to developing a strategy and strategic plan. Can without a strategy organization function? Maybe. However, this company does not know exactly what are the long-term objectives and therefore the road to achieve success is prolonged or is at the mercy of chance. Seneca said: ‘If a person does not know to which port he is steering, no wind is favorable to him’. The company without a strategy is like a ship drifting at sea. In the market the existence of the company without the vision, mission and action strategy can cause chaos in the functioning of the company, where its particular elements, ignorant of the common pattern of action, are guided only to the obvious directions, which are not always consistent with the direction of the entire company. Only the direction compatibility of working of particular divisions, departments, units of company (or companies forming part of a larger company) can provide long-term success in the market. Simple Solution helps customers to take the future of the company into their own hands through assistance by:
- building and implementing business strategy (statement of mission and vision, determining the key success factors as well as key strategic objectives of the company, specifying the measure and their size, establishing the targeted actions),
- prepare the company to implement the strategy,
- preparing the strategic plan with allocation of resources,
- monitoring the implementation of the strategy assumptions,
- searching new areas of development with the use of Blue Ocean Strategy (BOS)
The above actions constitute the unique method of developing and implementation of strategies as well as changes in the organization: Step by Step Strategy©.
Creation and implementation of the strategy - the most common mistakes:
- overestimation of their own resources and competencies,
- incorrect vision/mission,
- errors in the process of formulation of strategic objectives,
- incorrect choice of the strategy,
- lack of a link between strategic objectives and operational objectives,
- absence of the control over the effects of implementation,
- lack of consistency in following according to the plan,
- poor organization structure,
- incorrect financial management - lack of budgets for the implementation of strategic objectives,
- incorrect people management - employees do not understand the strategy and do not have motivation for its implementation.
Mergers & Acquisitions: mergers and acquisitions are the foundation of corporate development for over a hundred years. Achieving economies of scale and increase in market share were the main determinants of the development of most companies. The main objective of mergers and acquisitions was to reduce risk through diversification of business in which the company had shares. Today, a combination of enterprises, whether in the form of mergers or acquisitions, may facilitate access to new markets. Acquisition of another company is primarily a way less time-consuming and often less expensive than creating a new business. However, despite the great popularity of this path of development, over 30% of a merger or takeover process turns out to be a total failure, which usually means a loss for the company and its owners. Only 30% of companies consolidation gives the expected effect of synergies and overstate the shareholders.
Our company focuses on offering advisory services within the scope of mergers and acquisitions, and in particular at:
- searching for facilities of the acquisition,
- analysis of the pre-buyout / acquisition (Due Diligence),
- choosing the legal form of enterprise acquisition and merger of limited companies,
- formulating the sale contract of the company,
- acquisition and sales processes,
- transaction of management buyouts,
- joint ventures and strategic alliances,
- negotiating and managing the transaction process,
- Post Merger Integration (PMI).
Mergers & Acquisitions - the most common mistakes:
- poorly performed Due Diligence analysis,
- unethical and hidden motives of mergers/acquisitions,
- poorly formulated contract of mergers/acquisitions,
- outgrowth - creation of too extensive organization, which is difficult to manage,
- overconfidence - too enthusiastic approach of the management to the expected benefits from the merger,
- the lack of schedule and performing the Post Merger Integration Processes.
Due Diligence: it is a study aimed at gathering as much as possible information and a comprehensive assessment of the current state of business in key areas of its operation. Due Diligence allows the estimation of opportunities and risks associated with the development of the company and for diagnosis of the overall situation in the industry. Due Diligence is usually performed to provide independent, objective and complete information about the current situation to the potential investor or the management board and supervisory board, to facilitate making a strategic decision. Due Diligence service of Simple Solution may include the following areas:
- economic (position in the market, dependence on suppliers and buyers, market development prospects, the security of market),
- financial (maintenance of liquidity, the demand for sources of financing, the profitability of the various assortments of production, budget analysis, etc.),
- formal-legal ( current legal status of the company, legal status of property, property rights, ongoing legal proceedings and disputes, the analysis of commercial contracts, permits resulting from the activities, obligations to financial institutions and tax warranties, guarantees and other off-balance sheet commitments, the correctness of registry documents, etc. .),
- organization (organizational structure and its effectiveness, as well as evaluation of information flow within these structures - communication audit),
- human resources (analysis of the structure of employment in terms of education, skills, competencies, age, salary package, etc.).
Restructuring and change management: restructuring means changes made in the company and aimed at improving the organizational structure and operating principles of the company. The restructuring involves a number of related processes and activities, usually causing change in the scope of the company action, its capital structure or internal organization, and also sometimes the ownership structure. Depending on the conditions of this process, we can distinguish between repair restructuring (recovery programme) and the development restructuring (development programme), within which we offer the following types of activities:
- structure of strategic actions - creating the company's strategy,
- organizational restructuring, organizational culture - adapting internal structure and culture of the company to strategic activities,
- restructuring of human resources - to increase the efficiency of employees and executives,
- product restructuring - changes in the assortment of products and services,
- restructuring of marketing - increased sales, the company strengthen its position in the market,
- operational restructuring – optimization of processes essential for the company to be more efficient and cost effective,
- technical and technological restructuring - a combination of changes in the offer of the company and the method of manufacturing products in one coherent process,
- financial restructuring - changes leading to increased financial capabilities.
Management of change is related to the appropriate preparation of management and employees to make changes and is one of the most important elements related to the implementation of corporate strategy. Failures at this stage, mostly due to ignorance of the phenomenon of resistance to change among people who are faced with having to participate in new ventures (projects), or necessity to change their habits related to the implementation of routine tasks (processes) in the initial period will be doing everything to not give in changes and prove that the change is unnecessary. Appropriate preparation of the company (managers and employees) allows to avoid unnecessary tensions, which results in a decrease staff motivation, lower efficiency, and finally the lack of effects of changes and desired return to the previous system of work. Several major activities associated with managing of change: a test of readiness to change among employees, an analysis of potential sources of resistance, preparing a plan for prevention and communication of changes for employees, periodic monitoring.
Restructuring and change management - the most common mistakes:
- self-satisfaction of the team and management,
- failing to inform workers about the planned changes,
- absence of preparation of staff to changes,
- underestimation of the strength of vision,
- failure to create a sufficiently strong 'coalition of change',
- incorrectly identified problems,
- erroneously set goals,
- incompatibility of the methodology/actions to the situation,
- too late planning and implementation of the restructuring,
- absence of activities preparation prior to coming to their implementation,
- absence of action plan,
- excessive focus on immediate solving of problems without indication of the assumptions for the future,
- declare victory too quickly,
- absence of monitoring activities,
- omission of ingrained changes in the organization culture of the company.
