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Formula Won: A new way to measure corporate competitiveness

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The table stakes of competitiveness have changed thanks to digital. It used to be enough for a business to flex its competitive muscle on one or two of three areas: growth, profitability or sustainability and trust. Executing with equal strength against all three was difficult and unnecessary. But now, shareholders and stakeholders expect companies to be growth led and agile with their cost base, with a commitment to sustainability and trust.

Although the game has clearly changed, the need to understand which companies hold the best cards hasn’t. That’s why Accenture Strategy developed a new gauge—the Competitive Agility Index—to discern tomorrow’s leaders.

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Formula Won: A new way to measure corporate competitiveness

  1. 1. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
  2. 2. Shareholders and stakeholders expect winning companies to be growth-led, nimble and agile with their cost base, with a commitment to sustainability and trust. Winners in the future will possess an integrated strategy, featuring equal emphasis on growth, profitability and sustainability and trust. Although the field has clearly changed, the need for understanding which companies are on the inside track hasn’t. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. DISRUPTION IS WHIPSAWING INDUSTRIES
  3. 3. MEASURING THE PAST Traditional gauges are still favored ways to measure performance. But these traditional measurements fail to capture the hallmarks of future competitiveness. MARKETCAP TOTALSHAREHOLDER RETURN (TSR) Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
  4. 4. THE REAL QUESTION IS, “WHICH COMPANIES ARE POISED TO WIN TOMORROW?” Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
  5. 5. MEASURING FUTURE COMPETITIVENESS ACROSS 9 INDUSTRIES FROM OVER350 COMPANIES ANALYZED 5,200DATA POINTS The Competitive Agility Index is a first-of-its-kind measurement that paints a comprehensive picture of future competitiveness. The index looks at three areas: GROWTH, PROFITABILITY, AND SUSTAINABILITY AND TRUST TO CREATE THIS INDEX, ACCENTURE STRATEGY Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
  6. 6. GLIMPSING THE FUTURE Competitive Agility Index leaders were compared to leaders using traditional measures. Companies on top of the market cap and total shareholder return (TSR) lists rank in the middle of the pack—at best—on our index. Leaders in total shareholder return dropped on average 21positions Leaders in market cap droppedon average 8positions Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
  7. 7. FUTURE FORWARD Companies that focus on growth, profitability, and sustainability and trust simultaneously have the potential to yield far greater results on revenue improvement and EBITDA. HOW GREAT? A $30 billionautomotive and industrial company that improves its CAI score by one point, could see its revenues rise 3 percent or almost $1 billion. In the insurance sector, a one-point improvementin CAI could generate a 6 percent improvement in EBITDA. In energy, a one-point improvement in CAI could generate a 4.7 percent improvement in revenue growth. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
  8. 8. THE CAI REVEALED FOUR BROAD CATEGORIES OF COMPANIES: STRIVING TO SURVIVE 28% OFCOMPANIES These companies need aggressive interventions to urgently improve their performance. While the market has correctly valued companies in this quadrant, they must create an interdependent strategy and start by taking action against the pillar which will deliver the fastest results. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. OVER-ESTIMATED 22% OFCOMPANIES These are companies whose value is over-estimated by the market and could be at risk. Companies in this quadrant need to identify in which pillar they are underperforming so they can quickly accelerate their journey to a fully integrated strategy.
  9. 9. THE CAI REVEALED FOUR BROAD CATEGORIES OF COMPANIES: UNDER-ESTIMATED 21% OF COMPANIES These companies have adopted integrated strategies, but their value and competitive positioning haven’t been conveyed to the marketplace. They need to communicate to the market their initiatives across the pillars of growth, profitability, and sustainability and trust, and gain the reputation in the market they deserve. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. DISRUPTIVE COMPETITORS 26% OFCOMPANIES These leading companies are adopters and dominate their respective markets. To maintain their lead, they must continuously reinvent or reposition themselves using an integrated growth, profitability and sustainability strategy.
  10. 10. FIT FOR THE FUTURE erved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. Companies fit for the future simultaneously balance growth, profitability, sustainability and trust. And are rewarded for each point they climb up the Competitive Agility Index. THE QUESTION—OR THE CHALLENGE—IS WHERE WOULDYOUR COMPANY RANK ON THE COMPETITIVE AGILITY INDEX? Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
  11. 11. Copyright © 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. LEARN MORE Download the full report at: accenture.com/formula-won JOIN THE CONVERSATION @AccentureStrat www.linkedin.com/company/accenture-strategy

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