Strategy Development
- Strategy Development (ADSTM and CDSTM)
Organizations seek our advice for innovative approaches to strategy development to cope with the inherent uncertainty in today's business environment. Strategy entails not only the strategic priorities (do's and don'ts) but also the strategic planning process. What is needed from a strategy development and maintenance process is twofold: It needs to provide the flexibility to anticipate and react to changes in the business environment, at the same time as providing long term direction, clear objectives and organizational alignment. Arthur D. Little has developed a range of methodologies such as Ambition Driven StrategyTM (ADS) and Condition Driven StrategyTM (CDS) to answer to strategy development needs both on Corporate level and on Strategic Business Unit (SBU) level. Aligning ambitions, conditions and strategic plans with business plans and budgets is a key part of the work we do. - Strategy by Analogy
Strategic and organizational problems in a specific industry sometimes appear more complex and novel than they actually are. Instead, chances are that another industry has endured the same types of problems already. By drawing on our wide spanning industry competencies, Arthur D. Little can provide insights and solutions that may seem innovative in a specific industry but have been successfully implemented in another. The method of Strategy by Analogy is powerful, as it brings perspective and can help a company avoid pitfalls that other industries have endured. Arthur D. Little can help your organization with relevant analogies, provide the right workshop environment to establish a creative and engaging process and make sure that major pitfalls of Strategy by Analogy such as superficiality (when similarities are too superficial to actually be relevant) and confirmation bias (that management finds evidence in a specific solution although there are other solutions and analogies that are more relevant) are avoided. - Value Based Management (VBM)
Arthur D. Little defines value based management (VBM) as the methodology of creating, measuring and managing for value. The philosophy is simple - the value of a company is defined as its discounted future cash flows. Value is created when capital is invested at returns exceeding the cost of capital. VBM is an approach that facilitates rational decision making and focus of attention on the true value drivers and risk elements of a company. It entails managing the P&L as well as balance sheet. Arthur D. Little applies VBM in a rigorous way by combining industry expertise with VBM expertise and recognizes the difficulties of balancing short and long term priorities.
Strategy Development with special characteristics
- Business Cycle Management
Managing the business cycle is key to sustaining profitability. The ability to grow the organization in an efficient way or to handle macro economical downturns requires an enterprise that is prepared and adaptable in terms of costs, competencies, processes and customers. Management teams often struggle with executing current strategies and at the same time making those critical changes that will significantly improve the competitiveness in the longer run. Companies that can adapt their organization according to these factors are better positioned to seize opportunities in business upturns, and will be able to outperform the industry rivals in stagnating business climates. Arthur D. Little has extensive experience in the field of Business Cycle Management, utilizing our proven concepts and global resources in creating superior competitiveness for our clients in the next business cycle. - Sustainability Strategy
Environmental, Social and Governance issues, commonly referred to as Sustainability, are now firmly on the corporate agenda. Arthur D. Little has worked in the area of Sustainability longer than any other management consultancy firm. In 1905 we were recognized for our waste minimization efforts in the USA. Today climate change is the single most significant Sustainability area, with recent estimates suggesting that 12% EBITDA of the FTSE100 is at risk from emerging carbon constraints. Globally companies are facing increasing levels of corporate disclosure and increasing social responsibility across the supply chain, whether or not it is owned directly by them.
Please visit our Sustainability & Risk and Global Carbon Advisory Service (GCAS) web pages for more information - Family Business Strategy
A large number of enterprises worldwide are family owned businesses. Some studies suggest that family run businesses have a competitive advantage over businesses with other types of ownership. However, many family businesses also fail because of challenges in corporate governance, dispute among family members, dispute with non family employees, high reliance on the owner and/or difficulty of carrying out succession into the next generation.
Arthur D. Little has developed an in depth understanding of family run businesses and the dynamics of the key constituents family, business and ownership. We work actively with the key success factors for running a family run business more effectively: articulation of a family constitution, building of long-term relationships with non family member employees, and the development of a customized family business governance structure. - China Strategy
China is no doubt the most fascinating and powerful of the so called emerging markets, in several aspects the most important of any market. Multinationals, midsized companies and family businesses alike are all exposed to the enormous opportunities and threats of China. Typical strategic issues include not only procurement and manufacturing, but also R&D localization, joint ventures and M&A as well as value chain analyses, product modularization and market penetration strategies. Arthur D. Little is assisting both Western entrants, well-established multinationals and key Chinese corporations, with teams combining the best local and international team members.
Revenue Management
- Market Space Innovation (MSI)
Companies competing in mature markets are always trying to generate new sources for profitable growth. General Electric, IBM, Caterpillar and Ericsson are all well-known examples, trying to increase market share by cutting prices rarely translates into success. Market Space Innovation (MSI) offers a viable alternative - if well performed. MSI is about increasing customer share and geographical market segment shares by augmenting products, extended service offerings and solutions in an efficient and effective way. Important lessons to be learnt about Market Space Innovation include:
- Ignore the service component of your business at your own peril. "Service or no service?", is not the question. If you don't take initiatives in market space innovation, someone else will, gaining at your expense.
- Innovate, don't imitate. You must develop business solutions that are both differentiating and profitable on a sustainable basis. Imitation will not take you there.
- Focus on opportunities to redefine the name of the game in the value chain connecting you and your customer.
- Protect and lock in your market space innovations and prevent copying by a competitor.
Arthur D. Little has worked with numerous clients on MSI topics and has a vast database of past successes and failures from surveys that can be drawn on.
- Customer Relationship Management (CRM)
Many companies fail to maximise their growth because they are not managing their customer base in a good way. The customer base is the most valuable asset of any company. Customers are becoming more professional in their purchasing functions and are increasingly building up their own information database before making informed decisions on their purchasing requirements. This has resulted in the disruption of traditional marketing channels. The traditional marketing channels are to a large extent replaced by the Internet and other alternatives that are rich on information. Furthermore, as competitors learn to interpret the flood of customer behaviour data to create true market-of-one customisation, the warfare to acquire, retain, and develop customers continues to intensify. Arthur D. Little can help you by outlining how to build and implement powerful new customer management and marketing systems. - Sales Force Efficiency
Traditional ways of leveraging the sales force are being widely challenged. Changing customer behavior, re-regulations and Internet are either "friends or foes" for any sales manager and rep - opportunities are large while at the same time risks are high. The ever green balance between capitalizing on current customers and winning new customers is at stake - path dependence is no longer sufficient; recalibration is required. Arthur D. Little has a profound track record working with organizations with improvement programs focused on sales force efficiency in a variety of industries, from retail to telecom operators to big pharmaceuticals. - Low Income Consumer Strategy
With growth opportunities becoming more difficult to find in what is often referred to as developed countries, organisations are trying to explore growth in low income regions. However, selling old products, which is the conventional model, does not work very well as consumers in low income regions have different needs than consumers in high income regions. Arthur D. Little knows what it takes to be successful in environments with low income consumers and can help companies take advantage of these large and often fast growing markets. Serving low income consumers profitably can be a great challenge but is an achievable task with great profit potential. - Pricing Strategy
Pricing is the most powerful lever to profitability in saturated markets and it is too often underestimated. Managers often have insufficient customer insight and competitive information, and limited understanding of customer willingness to pay. In order to make systematically better pricing decisions, both an overall pricing policy and a product-specific price optimization approach are needed. Arthur D. Little has proven concepts in the area of pricing, and long experience from a large number of industries in finding best practice as well as innovative and successful pricing schemes.
Mergers & Acquisitions and Divestment Services
Arthur D. Little can assist your organization with a range of services when it comes to pre and post transactions. Please also visit the Corporate Finance Practice web site for more information about what transaction related services Arthur D. Little offers, e.g. Purchase Price Allocations and Impairment testing
- Commercial and Operational Due Diligences
In Commercial and Operational Due Diligences, both from a potential buyer's perspective and from a vendor's (VDD), Arthur D. Little provides an independent view on the "ability to deliver" of the target organization. Typically industry attractiveness and competitive position of the target are analyzed. Furthermore the strategy of the target and the operational improvement potential (e.g. procurement and capital efficiency) are assessed. Based on our conclusions we provide financial forecasts to investors and financial vendors. Our focus is typically mid-term and we differentiate ourselves from our competitors by our understanding of the commercial and technology environment and by our ability to address and quantify risks and opportunities. - Full Potential Framework
The Full Potential Framework is a proven tool for stretching the limits of a company's revenue and profit potential, encompassing organic as well as M&A growth. Active investors repeatedly turn to us for working side-by-sideTM with the board and management team of portfolio companies to close the gap between aggressive 3-5 year growth plans and the current situation. Arthur D. Little's framework builds on the Condition Driven Strategy methodology but goes further and establishes ways to extend product and service offerings in several dimensions to create new market space for the company. In addition, M&A assessment guidelines are used, which helps to evaluate M&A candidates from three perspectives; industrial, financial, and internal attractiveness or 'fit' - Technology Audit
The technology audit framework can be seen as a third party sanity check on the technologies of a company. Corporations as well as investors turn to us for technology audits, be it for portfolio prioritization purposes or for investment advice. By analyzing subjects such as the feasibility of the technology and the possible market space, we help our clients to get a better understanding of the value of, and the right timing for, a technology. By drawing on a strong background in technology management and the knowledge of how to link technology to strategy, Arthur D. Little is a very well qualified partner in technology audits. - 100 Day Plan
Arthur D. Little acknowledges the importance of facilitating change quickly after the acquisition of a company and/or after changing management. The first 100 days are vital for success. In a large number of cases, we have assisted clients in value creation, with services such as working capital reduction, repositioning of products and sales force efficiency improvements. Our propositions for value creation are always detailed in action plans with clear objectives and activities to follow up for full accountability. Drawing on our wide range of functional and industry competencies, we put together a unique solution for every company. - Post Merger Integration
Mergers and acquisitions are great opportunities for growth, however they are among the most challenging activities companies can undertake. Failures are frequent, risks are high. Post merger integration demands distinct analytical and practical work as well as social and behavioral competence. The PMI process is extremely complex to handle and often a cause of frustration for management, shareholders, customers and employees. To achieve long-term success a disciplined leadership throughout the merger process is essential. The vast number of issues that surface requires strong priority setting, master planning, implementation and follow-up. With Arthur D. Little's long history of successfully supporting companies in mergers, acquisitions and alliances, we help our clients manage post merger integration in line with specific industry and company requirements. - Partnering
More and more business models consider partnering as a fundamental corner pillar for success. In more than one industry one can observe the emergence of network-based competition models, and competition is no longer between companies but between entire networks. To compete successfully in the increasingly networked global marketplace, adequate partnering competence is evident.
Partnering, often referred to as strategic alliances, joint ventures, franchises, networks etc, takes into account that no partner is dominated by another and that technological and financial risks are taken and managed jointly. Partnering aims to build and sustain competitive advantage. Ambitions like expanding service offerings, accessing new markets and technologies and enhancing business know-how are some of the underlying drivers for companies to team up.
Industry/Sector Analysis
- Industrial and Regional Development
Competitiveness of countries, regions and industries change over time as the world is globalizing. Governments, regional development organizations, multinationals, SMEs, investors as well as universities are taking action to grasp the opportunities and offset the risks in order to defend and develop wealth, be it in strategic partnerships or stand-alone. Long term society planning, governance, infrastructure, knowledge & innovation investments, cluster initiatives, industrial development and public-private partnerships are all ingredients in strategies for regional, national and international development. Arthur D. Little has an unparalleled track record in this field since the 1950s in developed as well as developing countries.
- Benchmark Studies
Benchmarking is a tool to measure the performance of an organization against other organizations and define best practice. Benchmarking is a continuous process to measure and compare performance, in terms of practices, quality, systems, functions and processes. For a diverse set of clients and for our own thought leadership, we perform benchmark studies on a large number of topics that are key to our clients and to society. With our vast network of industry practitioners we have unique capabilities for qualitative benchmark studies on top management level through interviews with key opinion leaders. At the same time, we have the size and the knowledge to perform vast quantitative studies to discover best-practice and trends on subjects such as sourcing, M&A activity and working capital reduction. - Value Chain and Value Web Analysis
Moving from the view that value chain improvement is a reactive and operational optimization oriented approach, to the view that it is an active, strategically manageable instrument is crucial in a swiftly changing environment where proactive behavior is needed. Arthur D. Little recognizes the importance of continuously challenging where and how money is made and how it is distributed in the value chain. In times when traditional industry boundaries are dissolved and the pace of convergence of products, services and solutions is increasing, the value chain has become a value web. Clients seek our advice to ensure an aligned view on who the competitors are, who the customers are, and what the vertical and horizontal moves in the value web are. The need of understanding industry dynamics, clearly defining the company role, and mastering the complexity of the value chain or web is ever increasing.
Regulatory Related Services
- Corporate Governance
Corporate governance has become a key topic on the corporate agenda. Management and board members recognize the value of having a coherent and credible governance system in place, first and foremost for clear and transparent decision-making, authority and accountability, but also to mitigate risks and comply with regulatory requirements as stipulated by, for example, by the Sarbanes-Oxley Act. Arthur D. Little has long experience of auditing and creating governance frameworks for organizations that are effective, compliant with regulations, and aligned with business processes. We always strive for minimizing bureaucracy and overhead costs. Our experience spans corporations, mid-sized businesses as well as public sector clients - Corporatization
Arthur D. Little offers strategic and financial advisory services with regards to corporatization of state owned authorities. At corporatization, assets are revalued, debt structures are revisited and interest rates on loans are changed. In order to understand the operational and financial implications of such changes, Arthur D. Little combines scenario planning methodologies and regulatory outlooks with corporate valuation techniques and provides second opinion on what, and what level of, key ratios to apply by owners and management. Allowances of grace periods are frequently discussed to avoid dramatic non desired one-time effects. - Privatization
Arthur D. Little is accustomed to drawing up roadmaps for privatization, working closely together with government bodies. The approach for each object is individualized and based on the regulatory frameworks to which the object is exposed. Whether it is energy, telecom, railways, postal services, airports or healthcare infrastructure, Arthur D. Little puts together a team with vast sector and functional experience including strategy and corporate finance skills to make sure that the full potential value of the object is realized. We know how to attract the most attractive acquirers, how to deal with timing issues and how to make sure that a competitive market is achieved. - Deregulation
Arthur D. Little works with government bodies and institutions on how to optimize deregulation in industries that thrive on competition to ensure sufficient innovation and investments. As an example of our broad base of experience with deregulations, we produced identified priorities for removing non-tariff barriers to trade in the EEC so Europe could become a single enlarged market. Moreover Arthur D. Little produced the first White Paper on deregulation of telecommunications in the European Union already in 1980's on request from the European Commission.
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