Company Background
ABC Company is a global independent advisory firm that provides strategic and financial advice to clients across a range of the most active industry sectors and international markets. ABC provide advisory services to a wide range of clients globally, including large public multinational corporations, mid-sized public and private companies, individual entrepreneurs, private and institutional investors, creditor committees and government institutions. The company’s foundation was rooted in a belief, among other considerations, that clients would increasingly seek out deeply experienced advisors who offer independent strategic thinking and who are not burdened by the complicated conflicts that large investment banking institutions may face due to their various businesses.
ABC’s market opportunity lays in advice on complex issues that transcends traditional transaction- related questions. These complex issues included sector-specific transformation and disruption, business growth, challenges for leadership, and rapidly changing political and regulatory landscape. The company seeks to generate business through clients by becoming long-term partners to them, instead of solely transaction focused. In an effort to develop new client relationships, active dialogue with potential clients along with their financial and legal advisors is maintained. New relationships are established with business development initiatives, proprietary client engagement, new senior team previous client relationships, and introductions from network with senior executives, board members, attorneys, and other third parties.
Innovation Issues
The two most innovation problems my company ABC currently face are lack of an organizational innovation culture and agility and speed. The advisory sector of investment banking is not traditionally known for innovation and business structure of being solely an advisory firm was once considered and competitive advantage since they are able to provided unbiased advice without conflict of interest unlike their full-service investment banks. Advisory companies adopt and utilizes innovative products developed by others to enhance their capabilities and to meet our client needs. When innovation is spoken it’s in reference to use existing financial products and historical knowledge to find a customized client solution or new ways to obtain more businesses. There is no expectation or mention of innovation outside of the banking and marketing departments and within these departments little processes exist to capture or dismantle any new ideas. We hire the brightest employees and spend resources but fail to provide the environment and structure for innovation to occur. When sustaining technologies are acquired to enhance processes, they are underutilizing since there is no one or department that is responsible and company culture, “Don’t ask why, this is the way things have always been done.” The advisory market is still hot with a lot of business but lacking to handle sustaining innovation while hinder business growth him the market is down or additional alternatives.
Clients are no longer seeking for traditional defensive advice on boosting earning per shares, but complex advice to be agile for industry technology disruption and to maintain competitive parity (Macmillian, Prakash and Purowitz). Being in an intermediating change industry we relationship depended for generating and growing the business. We need to find new ways to add value to clients in a maturing market, regulatory constraints, and emerging alternatives. Elite experienced bankers are our core assets largest capital expenditure and leverage as a competitive advantage. Relying on the traditional relationship-based model is not a sustainable competitive advantage in this industry trajectory. Technology is changing the nature of dealmaking and proving that much of the M&A value chain can be commodified. In the middle market (deals worth between $10M to $1B in value), private, online networks and SaaS tools are giving smaller company executives and brokers the ability to conduct M&A transactions on their own more quickly and far more affordably (CB Insights). Financial upstarts are currently using technology to win business and cut into long time relationships between banks and companies. Tech companies like Apple and Facebook have done acquisitions without the involvement of banks. Technology will play a larger role in the investment banking future such as automating, software and big data to help bankers with a lot of the manual processes that they do today. Despite technology will be able to produce list of potential buyers for bankers but it will still require the human relement to identify which buyer on the list will be suitable for companies since they are complex. Companies will still want to work with advisory firms but expectations that firms are using technology for to enhance their process. Deloitte recently did a survey with regards to M&A strategies across industries and almost half of participants are looking for offensive M&A strategies (Deloitte). Technology, Media, & Telecommunications was the top industry looking for offensive strategies which is the segment our firm is trying to grow in. All the industry sectors we serve are evolving into technological companies and the product and services offer are secondary.
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