Survey highlights: Growth | KPMG | BE

Growth

Growth

Projections are highly optimistic, presenting many companies with the challenges of developing the right resources and strategies to support it.

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In contrast to current consumer market trends that show low single digit growth rates, 64 percent of companies expect organic sales growth of greater than 6 percent per annum during the next two years, and 27 percent project growth of greater than 10 percent.

However, all companies may not be set up to deliver on their ambitious growth agendas. Although companies are appropriately focused on building brand equity, other long-term strategies, namely innovation, customer service and multi-channel effectiveness, which are critical for sustaining growth in the long term, fell lower on the list of growth drivers for his year.

All companies may not be set up to deliver on their ambitious growth agenda.

Companies' relatively lower focus on these areas, in addition to a possible lack of the right capabilities—over half of respondents said their capabilities in data analytics, digital technology, customer experience delivery and ability to innovate were ‘moderate’ at best—presents some concern regarding their long term ability to succeed.

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Growth through acquisition

Merger and acquisition (M&A) activity is low on the corporate agenda this year with just over half of companies planning any M&A activity in the next two years. For the companies that are planning M&A, increased market share in existing markets was the top benefit they were looking to achieve, followed by portfolio growth/diversification and access to new geographic markets.

International expansion

Forty-six percent of executives said international expansion would be a 'very' or 'critically' important strategy for their companies in the coming year. But winning in some of these markets requires a long-term focus.

While growth in emerging markets is on average expected to rise by 5.4 percent and 5.5 percent respectively in 2015 and 2016, several big risks – including China's cooling property market, instability in Ukraine and the prospect of tighter global financial conditions over time—still stalk these markets, in spite of a reduction in overall risk levels compared to last year. Yet despite the risks and slowing growth rates, the sheer size of the middle class market in emerging economies simply cannot be ignored.

 

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