For U.S. CEOs in a variety of industries, the next three years will be challenging, exhilarating, and, more than likely, defining.
Last year, KPMG found U.S. CEOs upbeat about the three-year prospects for their companies. This year, two-thirds maintain that positive viewpoint or are even more optimistic about the road ahead.
This confidence, combined with an increasingly competitive business landscape, is driving more U.S. CEOs to pursue aggressive growth strategies that are geared toward inorganic growth and international expansion. These ambitious plans will take place in a tougher operating environment, characterized by:
Featuring the perspectives of 400 chief executives, as well as frontline insights from KPMG partners, KPMG’s U.S. CEO Outlook 2015 is a forward-looking examination of the next three years in business, exploring the most critical strategic issues of today and tomorrow.
65% Business optimism holds steady
Two thirds of U.S. CEOs either have the same level of confidence or increased confidence about their business prospects in the next three years, though one-third are less confident.
48% Competitive environment gets tougher
CEOs are feeling that the competitive environment is escalating. Almost half (48%) are extremely concerned about competitors’ ability to take business away, and almost a third (30%) are anxious about new entrants disrupting their business models.
73% Aggressive growth strategies prevail
For a vast majority of U.S. CEOs (95%) a focus on growth is more important to their company’s well-being than a focus on operational efficiencies. This year 73 percent of U.S. CEOs categorized their growth strategies as very aggressive.
54% Risk appetite increases
Fifty-four percent of CEOs feel that they are not taking enough risk as it relates to their growth strategy. Forty-five percent say they are taking the right amount of risk, with only 1 percent stating that they are taking too much risk.
38% Capital targeted for geographic expansion
Geographic expansion is the top strategic priority over the next three years for the largest groups of U.S. CEOs (38%). Significant capital will be devoted to expanding into foreign markets, say 77 percent of U.S. CEOs.
29% Inorganic growth set to rise
Almost a third of U.S. CEOs say their growth will be mostly inorganic over the next three years, compared with just 5 percent last year. Over the next 12 months 55 percent plan to undergo financial strengthening while, over the next three years, 54 percent say that acquisitions will be the top capital structural change.
55% Customer demand triggering transformations.
Customer loyalty is top of mind for CEOs, with more than half (55%) saying they are extremely concerned about it. To this end, customer demand is the top trigger for transformations.
69% Regulatory climate continues to have major impact
For a vast majority of U.S. CEOs, global economic growth (73%) and the regulatory environment (69%) are the two issues that have the most impact on their companies.
84% CFO tabbed as gaining most clout in the C-suite
Asked to identify the C-suite officer who will become more important to their organization over the next three years, CEOs name chief financial officer (84%), chief operating officer (71%), chief information officer (52%), and chief marketing officer (45%).
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