Capital strategy

Capital strategy used to be a crucial measure in raising fund or constructing stakeholder's ownership in a company. Recently, it is also used popularly as a succession planning measure for small to medium sized companies in Japan.

A successful succession planning can be attributed to the follows:

1. Identifying and electing successor to fill key business leadership position.
2. Carrying our the election before the key business leader passes.
3. Scheming to offer the successor with the whole ownership.
4. Planning a low-cost purchase of ownership for the successor from the current key business leader.

The capital strategy or "replacement planning" for key roles is the heart of succession planning which should be carried out while the key business leader is still in his/her office. Otherwise, the troubles relating to the replacement of key business leadership position as well as the stakeholder's ownership will take place which will certainly hinder the company's business operation and thus have an negative impact on the company's value.