Corporate development

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, plans for phasing in or out of certain markets or products, establishing relationships with strategic business partners, identifying and acquiring companies, securing financing, divesting of assets or divisions, 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. 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. Often the corporate development executives come from a legal background, due to the complex contractual issues associated with many transactions. When focused on product or financial issues, corporate development executives often have MBA, CFA or CPA credentials.

For example, if a company is looking towards non-organic growth expansion, a corporate development group will evaluate potential target companies. The acquisition of small or private companies by a large corporation is usually not conducted with the assistance of investment bankers, but executed by the corporate development team themselves.

One of the more common 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. 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 1980’s and 1990’s slowly phased out their core business and began to focus more on computer parts and accessories as a way to continue operations.

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.

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:

See also

External links


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