Devant Inner Circle Legal Update

November 2020

Welcome to this month’s newsletter. As always, do get in touch if you have any questions or comments about the content. Feel free to share this article within your company and if you have any suggestions for next month’s legal update let me know. Thanks again for being part of the Devant Inner Circle.

Tiffany Kemp
CEO Devant Limited
portrait of tiffany Kemp

What is a ‘Commercial Strategy’ (and why do you need one)?

Arguably the most important piece of your overall business strategy – it sets out how you will go about achieving your vision for your company – and includes things like how you plan to:

  • grow your turnover
  • drive profitability
  • manage your business effectively.

Maybe you have managed without one before, so:

  • why do you need one now?
  • what value is it going to add for the effort?

Take a little example, based on a real client.

Time For Plan BFabTech is a team of very smart engineers. They design and build clever and complicated electronic equipment used by big utilities worldwide to reliably serve millions of customers.

They were not sure how best to focus and push their business forward, and so they worked through the process of developing their Commercial Strategy. 

First, they worked out their vision, which is to:

  • Become the market leading provider of this technology
  • Develop their presence in a specific number of target countries
  • Grow their business in a scalable way, increasing turnover and profitability. 

Second, they made the high-level strategy decisions that would deliver this – the overall approach, objectives and required outcomes. This required answering 3 simple questions:

  1. What is your risk appetite? This will inform how aggressive you are, who you do business with, the projects you take on, and the contracts you will sign up to, plus many other management decisions. Do you: 
  • avoid risk, by doing ‘safe’ deals, or
  • take more risk to achieve faster growth? 
  1. What is your timeline? This will also inform how long you have to achieve your targets, which might feed into your risk appetite.  For example, are you wanting to:

– grow fast by leveraging, such as raising finance, or partnering with other companies to maximise the shareholder value drivers, then aiming to sell in X years, or

– grow more slowly, but retain more of the value, aiming for year on year long term growth and increased profitability?

  1. How do you want to achieve growth? This will be high influenced by your answers to questions 1 and 2, and could include options like:
  • acquisition of complimentary companies to buy market share or technical capability
  • re-sell 3rd party technology, products or services
  • sell through 3rd party distribution channels
  • invest in your own research and development to build on your own products

A well thought out, clearly defined, and properly communicated Commercial Strategy gives you the structure and direction to confidently drive your future. By translating this into your day to day decisions, you’ll be sure that marketing, sales, bids and proposals, negotiating contracts with suppliers, partners and clients, are all working together towards achieving your desired strategic outcomes.

FabTech? They decided that they needed to take a mixed approach – part acquisition, part investment in research and development, part joint venturing with complimentary companies. They translated this into allocating the time and resources they had available with specific focussed outcome targets. They now have clarity of what they want, how they will go about it, and who is going to do what.

That is why everyone needs a Commercial Strategy. Talk to your Devant consultant about scheduling in a strategy session, to get 2021 off to a flying start!


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