As the name suggests, Corporate Development is a business function that involves good planning, sound decision-making, accurate forecasting, and efficient strategy formulation to achieve organizational goals and implement the same. Once the goals and objectives are set, the next step involves initiating action toward achieving those goals.
For result-oriented actions to be taken, employees need a good course of action, a sound management system, better supervision by superiors, and risk-taking leaders. That is when a company can truly achieve its target.
Why do we need Corporate Development?
A business organization works in a highly uncertain and competitive environment. Nowadays, due to India being an open economy where international firms and business organizations can enter; on the one hand, there is a lot of competition, and on the other hand, due to regular changes in tastes and preferences, and market trends, there is a lot of uncertainty.
In such situations, a firm needs corporate development to have an advantage over its competitors. Only then can a firm expect to grow and increase its profits.
Due to rapidly changing technologies and methodologies businesses use, firms may function differently in the current environment. Hence, a corporate development practitioner must develop effective policies so that a firm can adapt to continuously changing conditions in the market. The primary reason why companies need corporate development is to adapt better to changing market trends.
Corporate Development and Business Development
Many people often confuse corporate development with business development when these two are entirely different concepts.
Business development deals with various activities and functions, leading to better business outputs. Business development is a broader concept as compared to corporate development. It will focus on business expansion, recruitment and training process, manufacturing and production, improving sales, and increasing profits and revenue of a firm.
On the other hand, corporate development, also known as ‘corp dev,’ is the process of making a business grow and reorganize. It means developing sound strategies to have an early mover advantage. An early mover advantage can help a firm recognize market opportunities and use them to have the upper hand over a company’s competitors.
It focuses on how a business firm can grow and stay ahead of its competitors to increase its sales and profits.
Benefits of Corporate Development
Corporate development can be very beneficial for firms when used at the right time and in the proper manner. The benefits of corporate development include the following-
1. Reshaping the management.
By reshaping the management, we mean reorganizing the management circle of a firm. It may involve recruiting one or more managers in a firm, and the process may replace some unequipped managers to improve the organization’s structure and strengthen it further.
2. Need for experts in large firms.
Experts with good experience, accurate forecasting methods, and sound decision-making techniques are required to give a firm a competitive edge over others in the industry. Experts provide a framework within which all the activities and actions are performed to ensure increased outputs.
3. Better financial performance.
With the help of experts and updated methodologies, it becomes easier to keep financial performance in check. There is a direct relationship that a firm will perform very well financially because of adequate decision-making and well-devised strategies.
4. Good image.
Corporate development further helps with improving the image of a company in society. In addition, it helps an organization get a reputed and stable position in the market. A firm gets an honorable position with goal-oriented actions, wise decisions, and early mover advantage. A good image builds public trust and helps a firm grow.
Public trust is crucial when it comes to high levels of competition and uncertainty in an environment.
5. Job satisfaction.
Job satisfaction among the employees at lower and middle levels of management is vital. Corporate development ensures peace and cooperation on the part of employees. They are more motivated and inspired to work for a company with a well-defined corporate development policy.
Job satisfaction among the employees means better working conditions and support for the high levels of management. When there is in-build trust in corporations, it tends to grow both externally and internally.
6. Customer satisfaction.
With a good image and public trust comes customer satisfaction. Practical and well-implemented strategies and policies are extremely helpful in increasing customer satisfaction.
7. Increased owners’ trust.
The owners of the company are equity shareholders. Owners of a company also include preference shareholders and debenture holders who invest considerable money in a firm.
The owners’ confidence and trust increase with a healthy management system and the high adaptability of a firm to its surroundings. They think of the organization as something they can trust for better investment returns. The promised returns further influence them to invest more money in the organization. With more investments, a company can work for its betterment without worrying about sources of finance.
Conclusion
To wrap up, corporate development is of great significance when it comes to the growth of a firm in all spheres. It gives businesses the best chance of advancement per current market trends.
