Why are Chinese Corporations Putting More Emphasis on Strategy Teams?
At AlphaSights, I speak with people in senior management across Fortune 1000 companies on a daily basis. From these conversations, its come to my attention that an increased number of them, especially those in the tech industry, are in the early stages of building out strategy teams. I wasn't surprised by this since many of the clients we work with rely heavily on the insights gathered by their corporate strategy and internal consulting teams to better prioritize their initiatives. However, I was interested to know why building these strategy teams has become a recent trend among Chinese corporations.
Strategy teams exist to determine what's next for the company – to identify which opportunities to grab, which products, ideas, or processes to let go of, and so on. In the past, technology companies haven't been able to look so far ahead; when they launch a new product or service, the number one priority is to fight for market awareness and market share as fast as possible. Being the first mover is directly correlated to success, especially in China. What matters most is now and thinking about the future has seemed like a luxurious use of their limited time while they should've been shedding blood, sweat, and tears to establish market share and build a customer base. For this reason, many corporations I’ve spoken to have invested in business development and marketing teams but not strategy teams.
Given that 20 years have passed since Baidu, Alibaba, and Tencent were founded, the technology landscape in China has significantly changed. It has evolved rapidly in terms of the variety and versatility of internet-related services, products, and artificial intelligence. Key players have secured their share of the pie and the time has come for them to consider how they can differentiate themselves with their competitors outside of China, and what is next for the company. This is the time to talk about strategy.
What purpose do strategy teams serve?
From my experience with corporate strategy teams, they work as internal consultants where they support various business units by identifying areas of growth. They create action plans for rollout, determine which businesses to invest in, and also handle ad hoc requests directly from the CEOs. The team is often formed from pulling employees from different business units internally and hiring former consultants.
What challenges do strategy teams face?
Many strategy professionals say the biggest challenge they face is collecting valuable insights about target markets, competitors, and customers in order to develop robust and well-vetted strategies. Some companies conduct research heavily through internet searches, trade reports, and conferences, but the process can be challenging and time-consuming. The research is not only broad and general; it lacks a critical competitive advantage because all firms have access to the same information. As a result, corporations are steadily approaching Expert Network Services (ENS) firms like AlphaSights to gain direct access to customers and subject-matter experts.
With an increasing trend in developing strategy teams at corporations in China, the demand for an effective research tool to uncover insights and opportunities is becoming more important – paving a big appetite and a bright future for the ENS industry.
Abby Mak joined AlphaSights in August of 2018 and serves as a Client Development Executive on our Corporate team.