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Analyzing business strategy

Alessio Ardenghi

Created on May 12, 2023

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Transcript

ANALYSING BUSINESS STRATEGY

Strategic challenges in the succession phase

Our elaboration from Zellweger, 2017

Leadership vacuum The predecessor is the main contributor to the accumulates competitive resources in the company, if he leaves the company the knowledge capital can be put at risk and so can the motivation of the employees.

Stagnating performance Often due to reduced energy and ability to understand the latest developments of the predecessor.

Diversified product/market strategy A company with a few well-focused business lines is more attractive. Often, however, the tendency for predecessors is to accumulate very large products/market with some unattractive components.

Presence of interconnected non-operational assets (e.g. unneeded cash, real estate) The successor may not be able to buy them (high price = deterrent to IS). Strategically it makes sense to sell them before succession to focus the business and to free up resources to satisfay successors who are entitled (legally or emotionally) to a portion of the family wealth.