Subsidiary Data and Growth Strategies For the Future

Lauren Mcmenemy
7 min read

The world’s markets are in a state of flux. They are always fluxing, of course, but right now, it’s a bit of a mess. Between US tariff wars and the impending uncertainty of Brexit, it’s difficult for organizations to plan for the future, to know where your business can go for growth in a safe, reliable and compliant way. That’s if growth is even possible; these uncertain times could actually call for consolidation and rationalization.

Now more than ever, organizations of any size need access to real-time, accurate data. They need to analyze their entity data to see where they’ve come from, where they are now and where they could go if the market was right. This sort of planning used to be done based on experience, by researching the market, even going on the hunches of the guys at the top. Today, though, that doesn’t have to be the case.

Subsidiary Data Informs Growth Strategies

The basics of growth strategy for any startup or new organization are clear. Writing for, Rob Biederman, co-founder and CEO of Catalant Technologies, says a growth strategy “involves more than simply envisioning long-term success. If you don’t have a tangible plan, you’re actually losing business – or you’re increasing the chance of losing business to competitors.”

Biederman lists the essential steps to set fertile ground for growth as:

  • Establish a value proposition.
  • Identify your ideal customer.
  • Define your key indicators.
  • Verify your revenue streams.
  • Look to your competition.
  • Focus on your strengths.
  • Invest in talent.

But what do you do after that? Getting up and running is one thing, but how does any business – new or old – plan for the future when the future is uncertain? Strategists have always turned to data to inform future planning, and today there is a whole world of data at our fingertips. It’s said data is now more valuable to the world than oil, and every person and every business leaves a digital fingerprint with every move they make.

The secret to planning for the future in business, then, is to harness this data, to analyze it and to make informed decisions when planning for the future. Let’s take a look at some growth strategies – as listed by the Business Development Bank of Canada (BDC) – and how subsidiary data could be used in planning.

Growth Strategy: Market Expansion

Searching for new markets is the obvious first choice for growth behind increasing share in current markets. When doing this, organizations should be aware of their current structure to inform decisions about potential new markets. Subsidiary data comes into play here through entity diagramming to visualize the structure and identify potential gaps or new markets, and through the need to securely store documentation relating to any new entity set up to fuel market expansion.

Growth Strategy: Diversification

BDC defines diversification as developing new products to sell to your current market and/or to new customers, leading to a related line of business or an entirely new one. To do this, you may need to set up a new subsidiary in your current markets to keep the lines of business separate – local regulation will drive this – and you will definitely need a new subsidiary if that diversification takes you to new markets (see “Growth Strategy: Market Expansion,” above). Subsidiary data will need to be analyzed to identify the market potential of any diversification scheme, and to lead the decision-makers to the right choice for the long term.

Growth Strategy: Merger and Acquisition

Cases of merger and acquisition, or M&A, are the obvious ones that call for copious subsidiary data and a robust corporate record. Without subsidiary data, those looking into the opportunity will be unable to get shareholders together to make quick decisions; they won’t be able to satisfy regulators’ questions around suitability and conflicts of interest; and they won’t be able to identify whether the opportunity will impact the wider organization negatively. Will the current structure be able to handle a new subsidiary? Will the market be open to this organization merging or acquiring new business? Analysis of subsidiary data is essential to this process.

Growth Strategy: Franchising

Growth could also come through franchising, either acquiring an existing franchise – which comes with name recognition and serious marketing power and support from the franchise owner – or franchising your own business if your success can be easily replicated by others. Franchising is a complex business, though, and subsidiary data becomes essential to operations here. There will be a lot of moving parts in a franchise structure, and if your group structure is already quite large and interconnected, this could pose problems. Analyze your current subsidiary data to identify potential issues, concerns or areas for consolidation before taking on such a hefty task.

Growth Strategy: Strategic Partnerships

Less final than M&A, strategic partnerships are often formed to explore growth in new markets, with each party bringing something to the table. This can be as simple as an informal agreement to refer clients to each other, or it could be a more complex joint-venture to pursue a common project. Either way, the partnership must have documentation, and that documentation must be stored securely and in an easily accessible portal. Subsidiary data is needed both in pursuing the partnership, to see if structures or entities can handle the burden, and both during the partnership and after it’s complete. Any business venture must be backed with documentation, which then forms part of the corporate record, stored as subsidiary data and is used to inform planning for the future.

Growth Strategy: Repositioning, Consolidation and Efficiency

Finally, not all growth is a matter of going full-on into a new venture. Sometimes all that’s needed is an analysis of subsidiary data to identify areas of blockage or redundancy and undergoing an entity consolidation process to get rid of inefficiencies in the group structure. This could be done by repositioning products in a market to bring them under one banner, or by closing down dormant entities that still require regular reporting from the compliance team. Subsidiary data becomes invaluable in aligning the group in an efficient way, making it ready to tackle the future in a more nimble and flexible way.

Harness technology to understand subsidiary data and plan for the future

Digging into myriad systems and services to find data to inform these growth strategies could be a full-time job for a whole department – yes, it’s that cumbersome – especially if the various platforms driving the organization’s data are not integrated in a seamless way. However, those working with robust entity management software can run instant reports and pull subsidiary data from across the organization in a quick and efficient way, helping to inform the big decisions to be made when planning for the future.

Working with entity management software, such as Diligent Entities, helps organizations to centralize, manage and effectively structure their corporate record to improve subsidiary governance and bring it in line with best practices. This not only helps to better ensure compliance, mitigate risk and improve decision-making, it also gives business leaders the robust subsidiary data they need to help them plan effectively for the future.

And when that entity management software integrates seamlessly with other systems within the organization, such as the board portal and secure file-sharing platforms, compliance and governance teams create a governance cloud that can be accessed from anywhere at any time. Diligent’s systems are built to make sure you can integrate other products to create a secure ecosystem to keep that subsidiary data flowing freely around the company.

Get in touch and schedule a demo to discover how Diligent can help get the right subsidiary data in front of the right people at the right time, and help your organization to plan for the future.

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Lauren McMenemy

Lauren has been writing about the world of compliance and governance for half a decade, but she's been a journalist and copywriter for longer '' that's 20 years spent writing for media, for agencies and for businesses across sectors including finance, professional services, healthcare, technology, energy and entertainment. As an editorial strategist, she has set the tone for national and multinational companies, and loves nothing more than getting to the heart of great stories. An Aussie in London for 13 years, and married to a true English eccentric.