The Quantera Global link between corporate strategy and transfer pricing
The management of a business must act with confidence in rapid changing environments. Managing a business becomes more complex and brings more uncertainty than before.
More complex situations require more flexible solutions. In some cases, the management of a company is required to make bold decisions to ensure continuity of the company. As such, management of a company develops a (long term) corporate strategy. The corporate strategy aims to provide guidance to the company in order to create added value and achieve optimal results.
A typical process of developing a corporate strategy:
Analyse the current situation. What are the value drivers of a company? How does the company make the financial results, what are the strengths, weaknesses, opportunities and risks of the business? What is the current position of the business in comparison to the competitors?
Develop multiple strategies to a greater goal. A key aspect is to have a choice of several strategies. A good strategy should have the possibility to roll back into smaller measurable goals. A strategy is – as the environment – not static but dynamic. A strategy is therefore never finished.
How can transfer pricing add value to corporate strategy?
A corporate strategy has to be flexible and dynamic in order to deal with changes (e.g. changes in external or internal environment, business models, operations, supply chain or finance).
For a successful corporate strategy, it is important that transfer pricing aspects are taken into account, both in the analysis phase as in the strategise phase. By aligning the transfer pricing model with the business strategy, the transfer pricing model adds value to the company.
A transfer pricing model adds value when the model supports the identification and optimal pricing of the value adding activities. This leads to an adequate allocation of roles, responsibilities and risks. Furthermore, tax related topics can be identified in an early stage, namely before executing the strategy. This increases a company’s control on tax and transfer pricing topics. At Quantera Global, we call this a “transfer pricing strategy”.
The Quantera Global approach
At Quantera Global we offer the management of a business another perspective on the corporate strategy. As a fully independent firm, we ask a lot of questions about the strategy of a company. The business plans for the coming year(s) and its goals within 5 years will be discussed thoroughly. Our specialists will provide insight from a transfer pricing perspective about any consequences of the company’s strategy.
Are you ready to be challenged on your strategy? Please contact us for a strategic session.