Accenture using a “new way” of measuring corporate competitiveness
Industrial companies, such as automotive manufacturers, could unlock billions of dollars in revenue by adopting a more “holistic strategy”, according to a new report by Accenture.
The business management consultant conducted a survey into competitiveness in industry and found that the best approach is one that places equal emphasis on growth, profitability, sustainability and trust.
This “inter-dependent” strategy “yields massive growth potential”, says Accenture, which bases its conclusions on analysis of 47 automotive and industrial companies’ performances.
Accenture says a typical $30 billion company which adopts this interdependent strategy could see revenues rise by almost $1 billion and a 2 percent increase in earnings.
Identifying new growth areas are crucial, adds Accenture.
For example, Automotive companies “will need to immediately emphasize growth by capitalizing on ride-sharing services, electric cars and changing sales channel structures, while still prioritizing sustainability at every step”.
One of the companies Accenture highlights as having an inter-dependent, successful strategy is automaker BMW, which scored high marks on its “Strategy Competitive Agility Index”.
“BMW is a leader,” says Accenture. “BMW landed a score of 63.8 – nearly double the industry average of 34.6 – in large part because it includes environmental commitments throughout its entire value chain.”
Companies Accenture highlights as having particularly successful strategies include:
Mark Pearson, senior managing director, Accenture strategy, says: “While these leaders each have unique business strategies, they’ve all prioritized the three competitiveness dimensions.
“They are investing for growth in new digital capabilities, focusing on cost and implementing tighter profitability measures, and exploiting their brands to position themselves as trusted suppliers in the digital age.”
Interestingly, says Accenture, the leaders highlighted by its report are in stark contrast to the leaders in market cap or total shareholder return – the more traditionally used metrics for success.
Bill Theofilou, senior managing director, Accenture strategy, says: “Traditional metrics are backward looking and only shed light on part of a company’s operations, failing to register how strong a company is in areas like sustainability and trust.
“Companies that don’t adopt an interdependent strategy that integrates the three competitiveness dimensions are at risk for being over estimated by the market or worse, succumbing to the competition. The good news is every company can start improving their performance immediately – the key is knowing where to start.”
Moreover, the competitiveness dimension that automotive and industrial companies need to put immediate emphasis on is growth.
“The dramatically changing sales channel structures, as well as the emergence of whole new mobility business models like car and ride sharing and electrification of cars, will offer enormous opportunities for the automotive company of the future in terms of growth. And those that do not seize these opportunities on time will be simply left behind,” added Pearson.