Historical Analysis: Understanding Your Company’s Strategic Evolution

The objective of the historical analysis of landmark corporate events is to understand how your company’s leadership approaches value creation using global and corporate strategy. By analyzing historical decisions and what the company’s leaders communicated about these decisions, we can better achieve this aim. This section of the guide will walk you through the process of identifying and critically evaluating the landmark corporate events that have shaped your chosen company’s current strategic direction.

Identifying Landmark Corporate Events

Your task is to identify 3-5 landmark corporate events in your company’s recent history. These events should be significant strategic decisions that have had a substantial impact on the company’s portfolio, scope, or global presence. Focus on events such as:

  • Acquisitions: When the company purchased another company.
  • Divestments: When the company sold off a business unit or asset.
  • Spin-offs: When the company separated a business unit to create a new, independent company.
  • Mergers: When the company combined with another company to form a new entity.
  • Alliances: When the company formed significant partnerships or collaborations with other organizations.
  • New Geographic and Product Market Entries: When the company expanded into new countries or launched significant new product lines.
  • Exits from Geographic and Product Markets: When the company decided to cease operations in a particular country or discontinue a product line.

Tips for Identifying Events:

  • Review your company’s annual reports (10-K filings) and earnings call transcripts for mentions of strategic initiatives and significant transactions.
  • Consult reputable financial news archives (Capital IQ, Mergent, etc.) and business publications for reports (Wall Street Journal,Bloomberg, etc.) on major company announcements and activities.
  • Examine the investor relations section of the company’s website for press releases and historical information.
  • Focus your choices on the most consequential transactions. You can often identify these by paying attention to the volume and intensity of analyst questions and CXO responses in the earnings call transcripts.
  • Ensure a good representation of corporate events and transactions, including both geographic market as well as product market decisions that affect the difference between customer willingness-to-pay and supplier opportunity cost.

Critically Evaluating Rationale and Performance

Once you have identified your 3-5 landmark corporate events, you need to critically evaluate the rationale provided by the company’s management at the time of the event and assess its subsequent performance. For each event, consider the following:

  • Management’s Rationale:
    • What reasons did the company’s management offer to investors and analysts for pursuing this event? This information can often be found in press releases announcing the event, transcripts of earnings calls discussing the decision, and investor presentations.
    • What strategic objectives was the company hoping to achieve? Did they relate to expanding market share, entering new segments, achieving synergies, or some other goal?
    • How did management explain the anticipated benefits of the event in terms of value creation and competitive advantage? Refer back to the concepts of willingness-to-pay (WTP) and supplier opportunity cost (SOC) from your readings.
    • Apply relevant tools such as DDD framework, scope decision, entry mode, location choice, and governance mode analyses,
  • Performance Review:
    • Following the event, how did the company perform relative to the stated objectives? Look for evidence in subsequent financial reports, earnings calls, and analyst commentary.
    • Were the anticipated synergies realized? Did the company gain a stronger competitive advantage?
    • Were there any unintended consequences or challenges that arose from the event?
    • Consider the long-term impact of the event on the company’s strategic trajectory.

Using NotebookLM for Historical Analysis:

  • Add relevant sources (press releases, analyst Q&A transcripts, and news articles) for each event.
  • Highlight management’s rationale and any discussion of expected performance.
  • As you find information on the actual outcomes, highlight and link it to the initial rationale.
  • Use notes to record your critical evaluation of the event, noting any discrepancies between the stated intentions and the actual results.

By conducting this historical analysis, you will develop a nuanced understanding of the corporate portfolio decisions that have shaped your company and the factors that have contributed to their success or failure. This analysis will provide a crucial foundation for the subsequent sections of your project.