Automotive & Industrial Companies Could Unlock $1 Billion Each in Revenue, According to Accenture
August 01 2017 - 6:59AM
Business Wire
The Competitive Agility Index identifies future
corporate leaders across nine industries based on strategy for
growth, profitability, and sustainability and trust
Too many companies have one-dimensional business strategies for
growth or driving profit, with little or no emphasis on
sustainability and trust, and no integration of the three,
according to Accenture (NYSE:ACN). A new and unique performance
index – the Competitive Agility Index – identifies the corporate
leaders of the future across nine industries, including automotive
and industrial, consumer goods and services, retail, life sciences,
communications, electronics and hi-tech, energy, insurance and
utilities.
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Accenture Strategy conducted the analysis and built the Index
from a set of nine separate performance measures to create a
forward-looking view on potential future competitiveness. The
analysis shows that the companies best positioned for
competitiveness have an interdependent strategy focused equally on
growth, profitability and sustainability and trust.
The opportunities uncovered in the Competitive Agility Index
include the massive growth potential for automotive and industrial
companies. The Index shows that companies in these sectors have a
tremendous revenue growth opportunity – in the range of $1 billion
per company – that can be achieved by an interdependent business
strategy with equal focus on all three competitiveness
dimensions.
Among the top automotive and industrial companies on the Index
are:
- BMW, based in Munich, Germany
- Schneider Electric, based in
Rueil-Malmaison, France
- Honeywell, based in New Jersey,
U.S.
- Daikin, based in Osaka, Japan
“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,” said Mark Pearson, Senior Managing Director,
Accenture Strategy.
The Competitive Agility Index shows that this interdependent
strategy can yield far greater revenue and EBITDA improvement than
one that focuses on just one or two of the dimensions. For example,
according to analysis of a sample set of 47 automotive/industrial
companies, a $30 billion company that adopts this strategy could
see revenues rise almost $1 billion and a two percent increase on
EBITDA.
Take BMW for example, with a Competitive Agility Index score of
63.8 (compared to the industry average of 34.6), the company has
adopted the interdependent strategy with equal emphasis on
sustainability and trust – something that some automotive companies
have neglected. BMW factors in consideration of the environment
along the entire value chain, and has a clear commitment to the
preservation of resources embedded in its approach.
Interestingly, the leaders identified by the analysis are in
stark contrast to the leaders in market cap or total shareholder
return – the more traditionally used metrics for success.
“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,” said Bill
Theofilou, Senior Managing Director, Accenture Strategy. “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.
About the Research
The Competitive Agility Index includes more than 350 companies
across nine industry segments. To create the Index, Accenture
Strategy analyzed a unique blend of publicly available data
including historical and future consensus data and information on
sustainability and trust efforts to determine company performance
across three dimensions: growth, profitability and sustainability
& trust. The Index gives each company a score on a scale of 1
to 100, based on performance across the three dimensions, relative
to its industry peers.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With more than 411,000
people serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives. Visit us
at www.accenture.com.
Accenture Strategy operates at the intersection of business
and technology. We bring together our capabilities in business,
technology, operations and function strategy to help our clients
envision and execute industry-specific strategies that support
enterprise wide transformation. Our focus on issues related to
digital disruption, competitiveness, global operating models,
talent and leadership help drive both efficiencies and growth. For
more information, follow @AccentureStrat or
visit www.accenture.com/strategy.
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Accenture StrategyMaggie Nolan, + 1 845 661
0952margaret.d.nolan@accenture.com
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