Is Strategic Capital a Decisive Element in Corporate Strategy?

Is Strategic Capital a Decisive Element in Corporate Strategy?

In the approach and development of the strategy of any company, there is a fundamental aspect, very little treated habitually, that is the strategic capital.

The companies, for their expansion and development, must take into account the influence that the strategic capital and all its components have in the moment of its development and the growth, being one of the first levers to activate and to impel the company forward for success.

The strategic capital is the basis for the development of the company. If the company lacks it, it will slow its progress, but if the company has it and it is strong, it will boost its progress by the leap and bounds. The most notable factors of successful strategic capital are as follows;

  • Shareholders
  • Financial structure
  • High direction
  • Corporate values

A company composed of a shareholder of quality and excellence is supported by the great capacity of investment that the growth needs of the company will demand, linking and projecting the company with the long term to allow the stability of the shareholders.

The balanced financial structure in a company influences in a decisive manner in the strategy, since if the indebtedness is under the possibilities of reaching the strategic objectives, they are more real. On the other hand, having low own funds will only allow the implementation of a survival strategy for the company instead of lifting the graph to the skies.

The senior managers, their experience, knowledge of the sector, global vision, experience and ability to lead the teams, are highly decisive factors when you are implementing an effective strategy for strategic capital.

With respect to corporate values, so often named, must be activated, articulated and lived by the members of the company from the conviction and its implementation will be a differential factor with respect to competing the companies and, logically, a benefit for the business owner and his employees. To put values into practice is the emotional commitment to the company that impresses the character as well as corporate personality.

And, finally, the prestige depends more on the external aspect and it is achieved, thanks to the recognition that the market makes of your company, which is conditioned by its life cycle.

The sum of all these parts makes the muscle of strategic capital a decisive lever in the creation of the future of the company from its strategies. I hope this articles has helped you understand the important of strategic capital.

With the advent of internet technology and boom of online businesses, we all are well aware of the term entrepreneurs now and the younger ones are more willing than ever to become an entrepreneur in the field of their passion with creativity and innovation. In the digital business, we call the strategic capital to the entrepreneurial capital that is accompanied formally by a systematic contribution of knowledge assets that includes the continuous participation in the development of the business. In other contexts, it is also called intelligent capital.

Experience and academic research show that the entrepreneurs are looking for the strategic capital. They hardly agree to sell a significant part of their business and admit a new shareholder who provides only money. The entrepreneurs seek shareholders who contribute to the strategic capital that includes knowledge of markets, technology, significant relational capital and, in general, proven ability to accompany the business.

Depending on the stage of development of a business, the entrepreneur seeks and accepts different types of financing. At the beginning of the business, they use own resources and those of their entrepreneurial partners. They soon resort to family and social environment, as well as operational environment. These initial sources of funding are particularly important when starting a business.

The entrepreneurs seek and are in a position to accept the strategic capital when they have already created a business platform capable of admitting new active partners and of executing the substantial investments of money in the service of growth and expansion of the business. The first sources of financing mentioned above, which come from the environment close to the entrepreneurs, are usually a prerequisite to the possibility of obtaining the strategic capital that is usually provided by a much more distant and formal third party.

The company in developing its strategic capital obtains clarity of the key information to which it must follow, foment the internal processes of generation of information to evaluate the present and future impacts that can affect the economic value of the organization. Likewise, create the future of the company by establishing strategies and action plans that allow us to reach the future definition of the company.

The concrete products that the company obtains for the strategic capital development are as follows;

  • Implementation of the processes of integral intelligence of the company.
  • Professional definition of the company and definition of the future of the company.
  • Strategic Capital Development Plan
  • Capacitation for the innovative development of the organization and the promotion of creative leadership.
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