Corporate strategy validation

A company’s strategy is derived from its vision and mission. It sets the path for the direction the company should take and is often designed to last for several years. However, are deviations from this path permissible once the strategy has been designed? The answer to this is simple: Yes!

There are various possibilities for validating the corporate strategy – both internally and externally. An internal validation option, which does not require specific reasons to be executed, can be realized in the form of a strategy meeting. In this case, the strategy is evaluated retrospectively once a year with the people responsible. In particular, the focus should be on the achievement of strategic goals and the evaluation of the strategic measures implemented to achieve them. The following questions can provide helpful insights and identify potential needs for action: Were the implemented measures able to achieve the planned effect? Why were the goals achieved or not achieved? In addition to analyzing the past, it is mandatory to apply the findings to the corporate environment and the future: What general conditions have changed? What needs to be changed to ensure that the goals are achieved in the future?

Carrying out a corporate strategy validation with external support is especially recommended if major strategic changes are planned, more detailed strategic planning is desired or the general conditions in the corporate environment have changed significantly.

Farbig (12)

The following advantages of an external assessment can be highlighted:

  • Comprehensive analysis of the industry environment with a high level of detail: The analysis of the business environment is executed by industry experts with many years of experience, specific knowledge and a selected team.
  • Objectivity of the analysis results: An external perspective ensures the necessary objectivity – distorted results due to internal bias are prevented.
  • Increased focus: An objective and goal-oriented approach prioritizes goals and measures with particular focus on profitability and future viability, executes analyses and prevents primary focus on “favorite projects”.
  • Prevention of resource shortages: Internal assessments are usually carried out during day-to-day business. Consequently, an external assessment team can prevent a lack of personnel resources

In addition to the aspects already mentioned, regardless of whether the corporate strategy is validated internally or externally, it is important to ensure that the orientation of the strategy is always long-term. Urgently required short-term adjustments, for example, due to external shocks, should always be analyzed by means of scenario planning before implementation in order to estimate long-term effects.

To sum it up, validating the strategy can ensure the profitability and future viability of a company. Nevertheless, one must be aware that strategic changes can have a strong impact on one’s own company. Each adjustment must be analyzed in detail in terms of implementation and possible effects, to not be harmed by opposite effects. With our extensive knowledge in a wide range of industries, we at Vindelici Advisors would be delighted to advise you on the validation of your corporate strategy and guide you towards its economic, future-oriented alignment with your core values.

Howson (2006): Commercial Due Diligence: The Key to Understanding Value in an Acquisition, 1. Aufl., Routledge.
Niederdrenk, Ralph (2017): Commercial Due Diligence: Die Königsdisziplin (Haufe TaschenGuide 10733) (German Edition), 1. Auflage 2017, Haufe.

Chris Schultheiß_Senior Consultant
Chris Schultheiß
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