Strategic planning is a vital task for any company, as it is through it that the organization will seek sustainable and competitive growth. Therefore, it is not a trivial activity or one that can be carried out without care, and good legal advice is an important ally to increase the chances of successful planning.

A traditional view of strategic planning is found in the book “Competitive Strategy” by Michael Porter, which presents three different strategies that are commonly used by entrepreneurs:

1. Cost strategyThe goal is to gain a competitive advantage by offering products or services at lower prices than other competitors in the same market. For this strategy to work, the company will seek to reduce its costs (such as labor, raw materials...), achieve greater efficiency in its production processes, and gain economies of scale, for example.
2. Differentiation strategyThrough this strategy, the company aims to offer a unique, unmistakable product or service with high added value. Luxury brands or companies with exclusive and/or innovative technologies are examples of organizations that use the differentiation strategy.
3. Focus strategyThe focus (or focus) strategy, finally, is the one aimed at meeting a specific need in the market, in the most efficient way possible. In the focus strategy, there is a limited number of clients served, through a much more restricted portfolio of products/services (sometimes the company offers only a single product or service), making the company a critical supplier for that market.

Each strategy brings different risks and opportunities, which can be better managed through contractual arrangements, preventive action and integration between the company's business strategy and legal strategy.

Let's look at some examples!

Cost strategy

When a company adopts a cost strategy, it needs to reduce its expenses as much as possible in order to maintain its competitive edge over other competitors with the same strategy.

One of the major risks, then, ends up being the use of suppliers who do not comply with labor legislation, subjecting workers to degrading conditions. It is an unfortunately quite common situation, and it should be properly managed through a procedure ofdue diligenceof suppliers – an increasingly relevant activity given the importance of the ESG agenda, and it is no longer acceptable for companies to simply claim that they were “unaware” of the practices of their outsourced workers or suppliers.

Another risk faced by a company that adopts a cost strategy is the adjustment of its input prices, which often requires passing the increase on to consumers (with the loss of competitive advantage). To prevent situations like these, it is important that supply contracts include clear clauses on price adjustments (using indices compatible with the peculiarities of the business), as well as rules regarding the passing on of exceptional adjustments or the possibility of termination without penalties in case of excessive cost increases for one or both parties.

Differentiation strategy

The differentiation strategy usually requires large investments – whether indesign, whether in Research, Development and Innovation (RD&I), or even in talent acquisition and retention.

For companies that adopt this strategy, legal support will be related to several activities, such as: protection of intellectual property (trademarks, patents,softwares), from registration with the INPI to eventual legal actions to prevent the improper use of the differentiating elements; confidentiality and non-disclosure agreements;partnershipandstock optionsto retain key employees for the success of the differentiation strategy.

Furthermore, it is natural that the company requires large amounts of capital to develop its products or services. At this point, it may be necessary to draft complex contracts with investors, in which legal counsel will assist in choosing the investment modality among the available options in the legislation (such as angel investment, convertible loan, partnership in a joint account, etc.) and will oversee all steps of the investment contract execution, from initial negotiations (which may be regulated through a Letter of Intent) to the drafting and finalization of the contract (with the release of funds and conversion of the investment into equity, for example).

Focus strategy

Through the focus strategy, the entrepreneur ends up attracting risks related to the smaller market niche that he will serve – which can put him at a disadvantage when faced with the risk of new entrants (i.e., competitors that may emerge in the future) and substitute products/services.

Here, in addition to the fundamental protections related to intellectual property, it is important that contracts with clients contain exclusivity clauses with an adequate duration, a well-defined scope of incidence and sufficient penalties to preserve the entrepreneur's investment.

It is also important that contracts contain non-competition clauses, to prevent the company's customers from developing the solution being contracted internally; as well as non-solicitation clauses, in order to prevent customers from hiring employees, partners or service providers of the organization, normally a strategy to internalize that activity.

From the examples above, it is clear that legal advice is an important ally of strategic planning, as long as there is a careful and adequate look at the directions the organization intends to take – and what the real legal needs of that business are.

Sergio Luiz Beggiato Junior is a lawyer at the Rücker Curi law firm – Law and Legal Consulting.

In an increasingly globalized world, in which the exchange of data between countries is constant and necessary for the functioning of various economic and technological activities, the General Data Protection Law (LGPD) imposes strict rules to ensure that the rights of data subjects are respected, even when this information crosses borders.

Regarding this matter, on 08/23/2024, the National Data Protection Authority (ANPD) published Resolution CD/ANPD No. 19/2024 ("Resolution"), which establishes the procedures and rules applicable to international data transfer operations.

Firstly, it is worth noting that international transfer occurs when the agent, from inside or outside Brazil, transmits, shares, or makes access to personal data available outside the national territory. The transmitting agent is called the exporter, while the agent that receives the data is called the importer.

Well, the international transfer of personal data can only occur when it is supported by a legal basis provided for in the LGPD and by one of the following mechanisms: countries with adequate protection, standard contractual clauses, global corporate standards or specific contractual clauses and, finally, protection guarantees and specific needs.

Among the mechanisms described above, the instrument of standard contractual clauses was already known in international legislative contexts (especially in Europe, under the General Data Protection Regulation). In the Brazilian context, it is also possible to foresee a wide use of this instrument in contracts.

The text of the standard contractual clauses is in the same Regulation, Annex II, which provides a set of 24 clauses formulated by the ANPD to be incorporated into contracts involving international data transfer, to ensure that exporting and importing data agents maintain an adequate level of protection, equivalent to that required by Brazilian legislation. Companies have a period of 12 months from the publication to adjust their contracts.

Now, the use of standard clauses brings a series of impacts to the agents' contracts. Among these main impacts, we highlight:

Changes to the terms of the contractIn addition to the standard clause texts not being alterable, the Resolution also stipulates that the original contract text must not contradict the provisions of the standard clauses. In this way, the agent must review and, if necessary, amend the provisions in the contracts to ensure compliance with the international transfer.

Distribution of responsibilities:The clauses clearly define the responsibilities of the parties involved in the processing and protection of personal data, assigning specific duties to both controllers and operators. These responsibilities are divided among proving the adoption of effective measures, transparency duties, respecting the rights of data subjects, reporting security incidents, compensating damages, and complying with various data processing modalities.

Transparency: The controller must provide the data subject, if requested, with the full contractual clauses used, taking into account commercial and industrial secrets, as well as publish on its website, on a specific page or integrated into the Privacy Policy, clear and accessible information on the international transfer of data.

Risk of penalties:Failure to comply with standard clauses may result in severe penalties, including fines, as well as damaging the reputation of the companies involved.

Definition of forum and jurisdiction: any disagreement with the terms of the standard clauses must be resolved before the competent courts in Brazil.

Due to these impacts, contract renegotiations between agents will be necessary in many cases to include standard clauses. More precisely, the ANPD's standard clauses for international transfers of personal data impose a new layer of complexity on business contracts, requiring detailed revisions, clause adaptations, and greater formality in commercial relationships. However, by standardizing practices and ensuring legal certainty, these clauses contribute to creating a safer and more reliable environment for the flow of data across national borders, which is essential in an increasingly interconnected world.