Corporate strategy is a proprietary set of actions that enables a company to be worth more than just the sum of its parts. The most critical role of the center is to enable its business unit strategies to achieve leadership positions. The center adds differential value to its business units in four areas: providing a compelling corporate vision and appropriate performance objectives, aggressively managing the portfolio, leveraging a repeatable operating model and executing a balanced financial strategy. Bain holds several core beliefs about the activities of the corporate center. It must:
- Not burden the frontline from delivering results, so "start with nothing, then add back"
- Build a compelling vision and set of concrete financial objectives that are embraced by key stakeholders
- Focus on creating a portfolio of leadership positions to generate superior returns and move to more attractive markets over time
- Determine portfolio priorities (between business units) by assessing competitive position, leadership potential, market attractiveness and economic profit
- Use portfolio priorities to drive differential resource allocation and differential targets across business units
- Strive for system repeatability, which creates competitive advantage from learning-curve effects gained through repetition, reduced complexity by adapting a known pattern, and faster and more reliable decision-making on investments
- Manage a conservative capital structure to support growth and provide flexibility
Over 30 years, Bain has helped thousands of companies to create and fulfill the corporate objectives of high-performance companies. Developing and executing a great Corporate Strategy requires a strong strategic foundation, the rigorous formulation and evaluation of alternatives, and careful follow-through to ensure mobilization.
Our approach begins with a collaborative partnership. We work with our clients to determine the full potential of their current portfolio and to formulate new portfolio, financial and repeatable-model alternatives to sustain profitability and growth. Together, we develop the processes and structures to support the critical initiatives that will drive superior performance. Using rigorous fact-based analyses, we pride ourselves on helping clients create pragmatic and actionable strategic plans that are focused on bottom-line results.
To find out more about Bain's work in this capability area, please contact the Strategy practice.
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