CEO Outlook - Tougher operating environment

Tougher operating environment

In today’s world, success is not a given. Companies that have been profitable for decades are fighting to remain relevant as the business environment changes dynamically around them. New technologies, new sales channels, new business models: what might present opportunities for entrepreneurial companies are posing serious challenges for other organizations. To grow and be sustainable, companies need to recognize the complexities of doing business today and alter their strategies and thinking accordingly.

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While the growth expectations of CEOs are positive, their ability to achieve aggressive targets will likely depend on their ability to recognize and respond effectively to a complex array of operating challenges. The reality is that there’s no single issue keeping CEOs up at night. From more traditional risks (e.g. regulatory environment, geopolitical risks) to emerging risks (e.g. disruptive technologies), CEOs need to  understand how every aspect of their operations might be affected by and what they need to do to mitigate any impact on their organization.

In addition to higher-level risks to their operations, CEOs have to recognize specific and evolving operational risks that may be unique based on their customers, industry, or region of operations. In many industries, customers are becoming more knowledgeable and demanding, making their spending less predictable. At the same time, digital and e-commerce technologies are offer new sales and communications channels, allowing new competitors to take advantage of lower barriers to entry and come in and overturn more traditional business models.

In such a complex and constantly evolving operating environment, companies need to re-evaluate every aspect of their operations to ensure they can remain competitive.  They need to refocus on addressing what their customers want and need, even if it means rethinking what their business does. And, when it comes to competition, companies need to recognize that sometimes the toughest strategic decisions are determining which companies to compete with and how to compete with them. A company’s main competition in the past may not be its primary competition in the future.

© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

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