Industry perceptions regarding manufacturing growth—both domestic and global—remain skewed as leading executives stand on the fence. In the industrial manufacturing sector, only 40 percent of chief executive officers surveyed in a recent PricewaterhouseCoopers (PwC) report expect the sector to decline in the next 12 months. And while nearly four-fifths of industrial manufacturing chief leaders are confident of revenue growth over the next year, only 18 percent believe that the global economy will improve.
Regardless of economic speculation, it’s no secret that numerous factors affect market growth, such as changing tax conditions, changing industry initiatives and standards, room for infrastructure development and even questions whether consumers are driving product demand to impel sales.
Yet, a number of industrial manufacturing CEOs are not just thinking about revisiting their company strategy—they’re doing it by initiating market scans, enacting product lifecycle management (PLM) processes, reevaluating their research and development (R&D) and even discussing the next step in their sales and operations planning (S&OP). PwC’s report cites 71 percent of surveyed CEOs expect to revisit their business strategy this year while 13 percent expect to make “fundamental alterations.” And 67 percent of those who are planning strategic changes are factoring in a slow economy into the plan.
So what does it take to make business growth happen in an economy that is still struggling to recover?
According to David Cote, Chairman and Chief Executive Officer of Honeywell, emerging regions with high growth are the areas where “your next competitor is likely to emerge.” “The only way we’ll be able to compete is if we’re there and doing everything locally and that’s where our big push has been,” said Cote.
Industrial manufacturers are faced with three other challenges that need to be overcome to persevere in local environments:
- Reconfiguring operations to meet local market needs: Building the right portfolio to include the right infrastructure, operating model, strategic alliances, products and services for the right market
- Defending against micro risks and macro disruptions: Managing the consequences of local risks that may become global disruptions
- Getting the right talent: Enforcing the right employees in the right places and managing serious short-term problems
Here are a number of other findings PwC reports this month:
- 35 percent of industrial manufacturers plan to complete a cross-border merger or acquisition in the next 12 months
- 68 percent say they are focusing more heavily on innovations designed to reduce the cost of existing processes
- 59 versus 49 percent of CEOs would like to devote more hours to developing operations outside their home markets
- Almost as many as 47 percent of companies are changing how they do business as a result of macro disruptions and micro risks
To view the full report, visit http://pwc.to/zEbQcz.
Note: This report included information from PricewaterhouseCoopers’ (PwC) 15th Annual Global CEO survey, “Growth and Value in a Volatile World.”