Business Strategy and Transactional Models

Strategy is the predominant topic for future value creation in the corporate world and thus also for investors. Ultimately, it refers to business strategy, namely market strategy: Markets are understood as industries, geographies, or socioeconomical segments and their developments and conquest determine the success of enterprises. Markets are the base for any transaction. This is the point where strategy and transactional model connect. In line with the Chandler’s well-known “structure follows strategy”, transactional models as one component of enterürise´s structure must be chosen and run in line with the strategy. Under the assumption of compliance with national laws, manageable tax risks, and avoidance of double taxation in the long run, they determine parts of these structures and processes for the distribution setup of an enterprise. The choice of the transactional model between Direct Business, Merchandize Business or Agency Business is therefore not only a matter of risk management, but also a matter of strategy implementation.