growth team membership 2010 corporate strategy and corporate development priorities survey results

Growth Team Membership™:

2010 Corporate Strategy and Corporate

Development Priorities

Survey ResultsJune 2010

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Table of Contents

Page

Section 1: Survey Purpose and Respondents 4

Section 2: External Factors Shaping Corporate Strategy and

Corporate Development 2010 Strategies 5

Section 2.1: By business model 6

Section 3: Key Corporate Strategy Challenges 9


Section 4: Corporate Strategy Effectiveness and Sociopolitical Issues 14


Section 5: Key Corporate Development Challenges 25


Section 6: Corporate Development Effectiveness and Activities 30


Section 7: Corporate Strategy and Corporate Development

Respondent Demographics 39

The content of these pages are © 2010 Frost & Sullivan. All rights reserved.


Survey Purpose and Respondents

There were 62 survey

respondents

Research Objective

To understand the most pressing

external and internal challenges

shaping corporate strategy and

corporate development executives’

2010 planning.

Methodology

Web-based survey platform

Survey Population

Target respondents were Manager

level and above corporate strategy

and corporate development

executives from companies

throughout North America, Latin

America and Europe.

Note: Due to small response rates, the Americas and European surveys were compiled for this report.


External Factors Shaping Corporate Strategy

and Corporate Development Strategies


Top Three External Factors

N = 54

KEY TAKEAWAY: Corporate Strategy and Corporate Development plans are heavily influenced by customer shifts and

competitor activities

Survey Question: Please indicate the three business environment factors that have the most impact on your 2010 corporate strategy and corporate

development plans.

15%

15%

24%

0% 25% 50%

Changes in customer buying behavior

Intensifying competition

Need for product/service innovation and capabilities


External Factors Impact on Corporate Strategy and Corporate

Development

N =54

Survey Question: Please indicate the impact that each of the following forces have on your 2010 corporate strategy and corporate development plans.

KEY TAKEAWAY: The after affects of the economic downturn—intense competition and changes in customer buying

behavior—are negatively affecting plans for 2010.

Negative ImpactPositive Impact

69%

88%

63%

0%

50%

100%

Need for product/service innovation and capabilities

Intensifying competition Changes in customer buying behavior


B-to-B B-to-C Hybrid

Intensifying

Competition

Tapping into Global

Market Opportunities1 Adjusting to the

Economic Downturn

Need for Product/

Service Innovation

and Capabilities

Changes in Customer

Buying Behavior2Changes in

Government

Regulation

Tapping into Global

Market Opportunities

Need for Green/

Sustainability

Initiatives3 Intensifying

Competition

KEY TAKEAWAY: There is a high level of variability among the top external challenges by business model.

Top Three External Factors (By Business Model)

N = 54


Key Corporate Strategy Challenges


Key Corporate Strategy Challenges Snapshot

All Companies

Top three challenges:

Developing effective

strategy implementation

plans

Aligning financial and

strategic objectives

Identifying new and viable

organic growth

opportunities

B-to-B Companies




plans



Managing and

implementing a global

business strategy

B-to-C Companies


Balancing demands for

short-term profit with long-

term strategic goals

Pinpointing risks to future

revenue growth

Creating a more agile

annual strategic planning

process

1

2

3

1

2

3

1

2

3


Top Five Key Corporate Strategy Challenges

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%)

N = 35

Survey Question: Please indicate the top five challenges shaping your corporate strategy decision-making in 2010.

KEY TAKEAWAY: Corporate Strategists’ key issue is perennial: implementing their strategies effectively.

Challenge 4 Balancing demands for short-term profit and long-term strategic goals (12%)

Challenge 5Developing a system to examine strategy progress and impact, and to give early

warning of problems in strategic initiatives (13%)


Root Cause of Top Five Corporate Strategy Challenges

N = 35

Survey Question: For the top five challenges you selected above, please indicate whether the root cause of the challenge is staff, technology, or

process.

KEY TAKEAWAY: Process and staff are cited as the predominant root causes of Corporate Strategy’s challenges.

Technology25%

Process43%

Process67%

Process50%

Process50%

Process67%

Staff57%

Staff33%

Staff50%

Staff25% Staff

33%

0%

50%

100%

Developing effective strategy

implementation plans

Aligning financial and strategic objectives

Identifying new and viable organic growth

opportunities

Balancing demands for short-term profit

with long-term strategic goals

Developing a system to examine strategy

progress and impact, and to give early

warning of problems in strategic initiatives





plans






plans




revenue growth


revenue growth

Managing and

implementing a global

business strategy

Creating a more agile

annual strategic planning

process




Challenge 1

KEY TAKEAWAY: Key corporate strategy challenges remain the same—but vary in their prioritization between business models.

Top Three Corporate Strategy Challenges (By Business Model)

N = 35

Challenge 2

Challenge 3


Corporate Strategy Effectiveness and

Sociopolitical Issues


Corporate Strategy Sociopolitical Issues and Effectiveness

Snapshot

All Companies

Rank their corporate strategy

effectiveness as “above average”

Environment/Sustainability is the

primary sociopolitical issue

affecting company strategy

Green Innovation is the primary

focus of their sustainability

initiatives

Expect their staffing levels to

stay the same in 2010

Expect their budgets to stay the

same in 2010

B-to-B Companies



Environment/Sustainability is the

primary sociopolitical issue affecting

company strategy

Green Innovation is the primary

focus of their sustainability initiatives

Expect their staffing levels to stay

the same in 2010

Expect their budgets to stay the

same in 2010

Hybrid Companies



Environment/Sustainability is the primary

sociopolitical issue affecting company

strategy

Corporate Social Responsibility is the

primary focus of their sustainability

initiatives

Expect their staffing levels to stay the

same or increase moderately 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.


All Companies B-to-B Companies

Hybrid Companies

Corporate Strategy’s View of Its Effectiveness (By Business

Model)

N = 32

Survey Question: Please assess the overall effectiveness of your corporate strategy function compared to those in other firms within your industry.

KEY TAKEAWAY: The majority of corporate strategists consider their function’s effectiveness to be “above average”.

Below Average4%

Average36%

Above Average52%

Exceptional8%

Below Average6%

Average34%

Above Average50%

Exceptional9%

Below Average16%

Average17%

Above Average50%

Exceptional17%


KEY TAKEAWAY: Respondents are including environmental/sustainability issues in their corporate strategy to create new market

opportunities.

Top Three Sociopolitical Issues and their Primary Benefit

N = 31

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.

Sociopolitical Issue

Environment/Sustainability (45%)

Corporate Social Responsibility (24%)

Local Community Development (11%)

Primary Benefit

New MarketOpportunities (64%)

Enhanced Company Reputation (100%)

Enhanced Company Reputation (100%)

1

2

3


B-to-B B-to-C

KEY TAKEAWAY: Regardless of business model, there is little variation in the sociopolitical issues influencing company

strategies in 2010.

Top Three Sociopolitical Issues (By Business Model)

N = 31

Hybrid

Environment/

Sustainability Healthcare Initiatives1 Environment/

Sustainability

Outsourcing Corporate Social

Responsibility 2 Corporate Social

Responsibility

Corporate Social

Responsibility

Ethical standards for

Advertising and

Marketing 3 Outsourcing


39%

13% 13%

4%

9%

13%

29%

14% 14%

29%

14%

34%

16% 13% 9%

6%

9%

0%

20%

40%

60%

CEO Executive Board Sustainability Department

Health, Safety, and Environment

Corporate Strategy Operations

B-to-B Companies Hybrid Companies All Companies

Ownership of Sustainability Program (By Business Model)

N = 32

KEY TAKEAWAY: The CEO is typically the primary owner of their companies’ sustainability programs.

Survey Question: For your company, please indicate who has primary responsibility for sustainability initiatives.

The red percentages

are for all respondents.


Top Three Focus Areas for Sustainability Initiatives

N =30

Survey Question: Please indicate the Top Three key focus areas for your organization’s sustainability initiatives.

KEY TAKEAWAY: There is only marginal difference between the ranking of top three initiatives.

Sustainability Initiative

Green Innovation (20%)

Government Regulation Compliance (18%)

Corporate Social Responsibility (18%)

1

2

3



Green Innovation

(23%)

Corporate Social

Responsibility (100%)1 Corporate Social

Responsibility (29%)

Product Life Cycle

Assessment (20%)Recycling (100%)2 Alternative

Energy(29%)

Corporate Social

Responsibility (20%)

Community

Development (100%)3 Climate Change (29%)

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.

Top Three Focus Areas for Sustainability Initiatives (By Business

Model)

N = 30

Survey Question: Please indicate the Top Three key focus areas for your organization’s sustainability initiatives.



Hybrid Companies

2010 vs. 2009 Budgets (By Business Model)

N = 32

Survey Question: In comparison to 2009, your 2010 corporate strategy budget will:

KEY TAKEAWAY: Respondents forecast little to no change in their budgets for 2010.

Increase Moderately

41%

Stay the Same41%

Decrease Moderately

14%

Decrease Substantially

4%

Increase Substantially

3%

Increase Moderately

36%

Stay the Same42%

Decrease Moderately

16%


3%


14%

Increase Moderately

29%Stay the Same29%

Decrease Moderately

28%


2010 vs. 2009 Staffing Plans (By Business Model)

N = 32

Survey Question: In comparison to 2009, your 2010 corporate strategy staff will:

KEY TAKEAWAY: Corporate Strategists indicate their staffing levels will remain static in 2010.


Hybrid Companies


3%

Increase Moderately

25%

Stay the Same56%

Decrease Moderately

6%


10%


14%

Increase Moderately

14%

Stay the Same29%

Decrease Moderately

14%


29%

Increase Moderately

31%

Stay the Same61%

Decrease Moderately

4%


4%



Hybrid Companies

Anticipated Company Performance in 2010 (By Business Model)

N = 30

Survey Question: In comparison to 2009, your company’s performance by the end of 2010 will:

KEY TAKEAWAY: Regardless of business model respondents predict an increase in their company’s performance in 2010.


14%

Increase Moderately

57%

Stay the Same29%


10%

Increase Moderately

67%

Stay the Same10%

Decrease Moderately

10%


3%


10%

Increase Moderately

67%

Stay the Same5%

Decrease Moderately

14%


4%


Key Corporate Development Challenges


Key Corporate Development Challenges Snapshot

All Companies


Identifying promising new

targets before competitors

Aligning acquisition

strategy with corporate

strategy

Creating a robust end-to-

end process for post-

merger/acquisition

integration

B-to-B Companies




Aligning acquisition

strategy with corporate

strategy

Identifying the appropriate

level of integration for an

acquisition

B-to-C Companies




Creating a robust end-to-end

process for post-merger/

acquisition integration

Creating a process to

systematically assess the

strategic fit of businesses in

the corporate portfolio

1

2

3

1

2

3

1

2

3


Top Five Key Corporate Development Challenges

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%)

N = 28

Survey Question: Please indicate the top five challenges shaping your Corporate Development decision-making in 2010.

KEY TAKEAWAY: Corporate Development’s top challenges are on issues surrounding M&A activity and strategic partnerships.

Challenge 4Creating a methodology for identifying and evaluating the “right” strategic

partners (17%)

Challenge 5 Improving integration team’s change management capabilities (13%)


Root Cause of Top Five Corporate Development Challenges

N = 28

Survey Question: For the top five challenges you selected above, please indicate whether the root cause of the challenge is staff, technology, or

process.

KEY TAKEAWAY: Process and staff are the primary root cause of Corporate Development’s key challenges.

Technology14%

Process57% Process

75%

Process50%

Process50%

Staff29%

Staff25%

Staff50%

Staff50%

Staff100%

0%

50%

100%

Identifying promising new targets before

competitors

Aligning acquisition strategy with corporate

strategy

Creating a robust end-to-end process for post-

merger/acquisition integration

Creating a methodology for identifying and

evaluating the “right” strategic partners

Improving integration team’s change management capabilities







Aligning acquisition strategy

with corporate strategy

Aligning acquisition strategy

with corporate strategy

Creating a robust end-to-

end process for post-

merger/acquisition

integration

Assessing and balancing

risk across a broad portfolio

of acquisition opportunities

Identifying the appropriate

level of integration for an

acquisition

Creating a process to

systematically assess the

strategic fit of businesses in

the corporate portfolio



Challenge 1

KEY TAKEAWAY: Regardless of business model, respondents are seeking ways to identify new targets before their competitors.

Top Three Corporate Development Challenges (By Business

Model)

N = 28

Challenge 2

Challenge 3


Corporate Development Effectiveness and

Activities


Corporate Development Effectiveness and Activities Snapshot

All Companies

Rank their corporate

development effectiveness as

“average”

Will focus on M&A activities

and expanding into emerging

markets in 2010


stay the same in 2010

Predict their budgets will

increase moderately in 2010

B-to-B Companies

Rank their corporate development

effectiveness as “average”

Will focus on reassessing their

portfolio for inorganic growth and

expanding into emerging markets in

2010

Expect their staffing levels to stay

the same in 2010

Expect their budgets to increase

moderately in 2010

Hybrid Companies

Rank their corporate development


Will focus on developing strategic

partnerships and expanding into

emerging markets in 2010


increase in 2010

Expect their budgets to stay the same

in 2010

Note: Due to small response rates, there is data available for B-to-C Respondents on only some of the questions.



Hybrid Companies

Corporate Development’s View of Its Effectiveness (By Business

Model)

N =24

Survey Question: Please assess the overall effectiveness of your corporate development function compared to those in other firms within your

industry.

KEY TAKEAWAY: Respondents from hybrid companies are more likely to rate their function’s effectiveness as “above

average.”

Below Average5%

Average55%

Above Average35%

Exceptional5%

Below Average8%

Average50%

Above Average38%

Exceptional4%

Below Average33%

Above Average67%


Corporate Development Portfolio Activities 2010 vs. 2009

N = 27

Survey Question: In comparison to 2009, your 2010 corporate development activity for each of the following categories will:

KEY TAKEAWAY: The majority of Corporate Development executives predict an increase in M&A activity, strategic

partnerships, and expansion into emerging markets in 2010.


Decrease Moderately

Increase Moderately


Stay the Same

Conducting

Acquisitions/

Mergers

Assessing

Corporate

Portfolio for

Inorganic

Growth Needs

Establishing

Strategic

Partnerships

and Joint

Ventures

Divesting

Investments

and Assets

Developing

Scale and

Scope in

Emerging

Markets

Seeking

External

Sources of

Acquisition

Capital

26%

16% 19%

4%

40%

7%

30% 48% 44%

19%

30%

11%

41%

36% 37%

67%

30%

78%

3%

3%

7% 4%

0%

50%

100%


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.


Decrease Moderately

Increase Moderately


Stay the Same

Conducting

Acquisitions/

Mergers

Assessing

Corporate

Portfolio for

Inorganic

Growth Needs

Establishing

Strategic

Partnerships

and Joint

Ventures

Divesting

Investments

and Assets

Developing

Scale and

Scope in

Emerging

Markets

Seeking

External

Sources of

Acquisition

Capital

33%

21% 24%

5%

43%

10%

29%47% 43%

14%

33%

10%

33%

32% 33%

67%

24%

76%

5%

5%

9%4%

0%

50%

100%


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.


Decrease Moderately

Increase Moderately


Stay the Same

Conducting

Acquisitions/

Mergers

Assessing

Corporate

Portfolio for

Inorganic

Growth Needs

Establishing

Strategic

Partnerships

and Joint

Ventures

Divesting

Investments

and Assets

Developing

Scale and

Scope in

Emerging

Markets

Seeking

External

Sources of

Acquisition

Capital

40%

20%

40%

60%

40%

20%

80%

60%

40%

60%

40%

100%

0%

50%

100%



Hybrid Companies

2010 vs. 2009 Budgets (By Business Model)

N = 27

Survey Question: In comparison to 2009, your 2010 corporate development budget will:

KEY TAKEAWAY: Respondents expect their corporate development budgets to increase moderately in 2010.


10%

Increase Moderately

47%

Stay the Same43%


7%

Increase Moderately

44%

Stay the Same41%

Decrease Moderately

7%

Increase Moderately

20%

Stay the Same40%

Decrease Moderately

20%


2010 vs. 2009 Staffing Plans (By Business Model)

N = 27

Survey Question: In comparison to 2009, your 2010 corporate development staff will:

KEY TAKEAWAY: Regardless of business model, corporate development staffing levels will remain static in 2010.


Hybrid Companies


10%

Increase Moderately

38%

Stay the Same52%


7%

Increase Moderately

30%

Stay the Same56%

Decrease Moderately

7%

Stay the Same60%

Decrease Moderately

40%


Hybrid Companies


Anticipated Company Performance in 2010 (By Business Model)

N = 25

Survey Question: In comparison to 2009, your company’s performance by the end of 2010 will:

KEY TAKEAWAY: The majority of respondents are optimistic about their company’s performance in 2010.

Increase Moderately

60%

Stay the Same40%


20%

Increase Moderately

60%

Stay the Same20%

Decrease Moderately

20%


16%

Increase Moderately

60%

Stay the Same16%

Decrease Moderately

8%


Corporate Strategy and Corporate Development

Respondent Demographics


Private35%

Venture Capital7%

Public58%

Demographics

N = 57

Over half of the

respondents work in

a public company.

Survey Question: Please indicate the type of enterprise best represents your organization.

Respondents tended to be from public, B-to-B companies whose 2009 revenue ranged from $1 to $11 billion.

Enterprise Type Business Model

Company Revenue

N =57N = 57

B-to-B Company

75%

B-to-C Company

7%

Hybrid Company

18%

19%14% 16%

33%

16%

0%

30%

60%

Below $100 million $100 to $499.99 million

$500 million to $999.99 million

$1 billion to $11 billion

More than $11 billion


Demographics: Top Six Participating Industries

N = 62

Survey Question: Please indicate which of these Industry categories best describes you organization (please indicate all that apply).

24%

19%

15%

13%

13%

13%

0% 15% 30%

Energy and Power Systems

Information and Communication Technologies

Healthcare and Life Sciences

Aerospace and Defense

Automotive and Transportation

Chemicals, Materials, and Food


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growth team membership 2010 corporate strategy and corporate development priorities survey results

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