New York: For business next year, the only sure thing is uncertainty, Booz & Company advised its clients today. The consulting firm's annual "Industry Perspectives" predict that industries in 2012 will face challenges ranging from price wars to the evaporation of profit pools to technology-driven disruption. For executives, the best advice is to focus sharply on the capabilities they must have to win in this shaky environment.
The Industry Perspectives cover 12 different sectors and include robust insights and trends for the year ahead, including:
- The aerospace and defence industry will be transformed by the entry of new competitors while defence cuts back and commercial aviation soars.
- The chemical industry will adjust to giant supplies of new raw materials from shale oil and gas in North America.
- Retail banks will feel pain as traditional sources of profitability disappear.
- Wealth management firms will use the Internet to build trust with investors whose patience has worn thin.
- Companies in the healthcare industry will find ways to deal with regulatory uncertainty--by cutting costs their own way.
- Pharmaceutical companies will struggle to get through the post-blockbuster drug era.
- As the Age of Uncertainty continues in 2012, industrial companies must revisit their conservative investment stance, because "sitting on the sidelines" is hurting their growth prospects.
- The disruption caused by mass digitization will set up the winning global technology and telecommunications companies as gateways into the cloud.
- A new wave of innovation-based competition will propel the automotive industry into another year of growth.
- The leading retailers will use social media as their favoured way of reaching new customers.
- Consumer packaged goods companies will continue to split and realign, with the most coherent companies doing best.
"Across all industries, no matter what opportunities and challenges lie ahead, there is one piece of advice that always holds true. The key to success is to know what you're really good at--and matters in the market--and build your strategy from there," says Cesare Mainardi, Chief Operating Officer of Booz & Company and Managing Director of the firm's North American business.
"This means figuring out how best to create value for your customers, identifying the unique combination of things your company does better than anyone else, and then assessing which activities should stay and which should go. The companies that coherently balance these three things will earn the 'right to win' in 2012."