Strategic Studies

Objective & Purpose

Provide senior management with a critical background to large investment decisions, through comprehensive long-term scenarios from macroeconomic shocks / political assumptions on the client’s respective industry, market and competitors.

Methodology & Tools

Construction of coherent macroeconomic scenarios through macro econometric models and specific industry models allowing long-term projections. This always includes one or more field missions as well as a large range of contact with TAC local networks.

Standard Duration

TAC’s flexibility allows defining a timeframe for such studies that fit exactly with each customer’s specific requirements. Past experience has shown that a minimum of about 3 months is required for such studies.

Description

Country strategy studies are designed to support and incorporate long-term investment decisions in developing and developed countries. This would include investment or acquisition decisions, long-term commercial or partnership policies, and possibly withdrawal or retrenchment processes. Such “strategic decisions” usually need to be based on medium- to long-term scenarios (5 to 25 years time-horizon) to take into account the macroeconomic, social and political environment alongside industry performance and the likely response of competitors. TAC’s country strategy studies are constructed and realized precisely to feed the decision process for such strategic issues.

TAC has developed a specific methodology for such scenario construction and analyses, with a comprehensive and coherent top-down approach combining ad-hoc quantitative developments and a refined qualitative analysis.

This methodology is based on the following steps:

• Identification of the key issues for the country’s medium- to long-term development
• Construction of quantitative instruments able to capture the relationship between the assumptions characterizing the archetypal scenarios and the fundamental economic variables needed for the strategic appraisal.
• Identification of the economic results that are only marginally affected by the passage from one scenario to the other, which we call Anchor Points. Symmetrically, the variables that exhibit radically different values when moving from one scenario to the other are called the Risk Areas. The studies look at the possible way to mitigate or manage such risks.
• The unfolding of the macro scenarios down to the specific industry of the customer, here again through a combination of qualitative analysis and quantitative estimation and coherence building. The resulting output at this juncture of the country strategy allows one to identify the specific nature of the customer’s demand factors and competition issues.
• Last but not least, country strategy studies can look at the different strategic options available and initiate the evaluation process for each option, including valuation of potential targets, cost estimates and stress testing on final corporate results.

TAC has a very strict policy of confidentiality for such studies. No information obtained on the sector, company or any private information obtained by TAC through the assignment, can be used or distributed in any form to any third party. Conversely, the macroeconomic tools and results remain TAC’s intellectual property, unless specific confidentiality restrictions are requested by the customer.