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Business PulseDual perspectives on the top 10 risks andopportunities 2013 and beyondSnapshot presentation

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Are you confident that your company is well placed to meet the risks and challenges currently on the horizon?Page 2 Business Pulse

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How can you really know that opportunities aren’t passing you by?Page 3 Business Pulse

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Start exploring now The top 10 risks and opportunities What lies ahead?Page 4 Business Pulse

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What is Business Pulse about?Business Pulse explores the top 10 risksand opportunities faced by global Business Pulse key findingsorganizations over the next few years. ► There has been a shift in thinking among companies this year. RatherErnst & Young’s Business Pulse report than waiting for developed marketsis based on a large sample survey to recover, they now accept that theof companies in 21 countries and across duration of the downturn is uncertain.various industry sectors. ► Companies continue to focus on controlling costs and optimizingThe report takes the pulse of: agility to survive in an intensely competitive market.► Current thinking on risks and opportunities and emerging challenges ► What is different, compared with two years ago, is that companies are► Dual perspective on the themes arising once more looking for growth from the top 10 lists opportunities, both geographically, i.e., in rapid-growth economies, and► Expectations from industry executives in innovation across products, and Ernst & Young specialists services and operations.Page 5 Business Pulse

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What is the Ernst & Young risk andopportunity radar? At the center of the radar are the risks and opportunities that our survey respondents felt were having the biggest impact on major organizations worldwide. Arrows indicate the extent to Cost Stakeholder which the ranking is expected to increase, decrease or remain competitiveness confidence the same between 2013 and 2015. The radar is divided into four sections, corresponding to Ernst & Young’s Growing Beyond model. The sections are: ► Sustaining companies’ economic Cost competitiveness viability ► Allowing companies to build Stakeholder confidence stronger relationships with stakeholders ► Maximizing potential market Customer reach opportunity for products and services Customer Operational reach agility ► Improving organizations’ ability Operational agility to deliver effectively in a quickly changing marketPage 6 Business Pulse

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Are these your top risks?Page 7 Business Pulse

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Global business risks(2015 expected ranking in brackets)Cost Stakeholder 1. Pricing pressure (1)competitiveness confidence 2. Cost-cutting and profit pressure (2)Political shocks 3. Markets risks (3) 4. Macroeconomic risk (4) Expansion of government’s role 5. Management talent and skillSovereign debt Market risks shortages (5) 6. Expansion of government’s role (7)Macroeconomic risk Regulation and compliance 7. Regulation and compliance (6)Cost-cutting and profit Pricing pressure 8. Sovereign debt (10)pressure 9. Emerging technologies (8) 10. Political shocks (9) Managing talent and skill shortages Emerging technologies 2013 ranking and expected 2015 rankingCustomer Operational Up in 2015 Same in 2015 Down in 2015reach agilityPage 8 Business Pulse

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Are these your top opportunities?Page 9 Business Pulse

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Global business opportunities(2015 expected ranking in brackets)Cost Stakeholder 1. Innovation in products, services andcompetitiveness confidence operations (1) 2. Emerging market demand growth (2) Excellence in investor 3. Investing in process, tools and training relations to achieve greater productivity (3) Leveraging CSR and 4. New marketing channels (4) public confidence 5. Improving execution of strategy across business functions (5) Investing 6. Investing in IT (6) in cleantech 7. Excellence in investor relations (8) Innovation in products, Investing in process, tools services and operations 8. Leveraging corporate social responsibility and training to achieve greater productivity (CSR) and public confidence (7) Emerging market demand growth 9. Investing in cleantech (9) Investing in IT New market channels Improving execution of strategy 10. Global optimization and relocation of key across business functions functions (10) Global optimization and relocation of key functionsCustomer Operational 2013 ranking and expected 2015 rankingreach agility Up in 2015 Same in 2015 Down in 2015Page 10 Business Pulse

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Plan your risk and opportunity agenda Relevant business risks Specific areas of concern What would you like What would you like and opportunities and risk to achieve? to achieve? identified (short term) (mid term) 1 2 3 4 5 6 7 8 9 10Page 11 Business Pulse

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Start preparing your business by askingthese questions The following slides detail The risk and opportunity a series of self-assessment self-assessment questions relate questions relating to the to the four radar quadrants. top 10 risks and opportunities. They give a snapshot of which To access the full list of questions risks and opportunities are most and insight into each risk and relevant to the following themes: opportunity: ► Cost competitiveness ► Stakeholder confidence  Download the report at ey.com/businesspulse ► Customer reach ► Operational agilityPage 12 Business Pulse

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Cost competitivenessTo see the full list of self-assessment questions, download the full reportCost competitiveness covers: Self-assessment questions Risks 1. How do you ensure you focus on the right strategic relationshipsPricing pressure has become the biggest risk noted by companiesthis year, up from fourth place in 2011. (e.g., encourage innovation to design the right products from theCost cutting and the related pressure on profits is cited by best materials and secure criticalrespondents as the second-biggest risk they face. supply)?Market risks have risen to third place as companies accept that the 2. How do you sustain marginsincreasing reliance on emerging markets for growth brings new risks. and operating results in the faceMacroeconomic risk is ranked fourth as the shocks of 2008–09 of increased global competition?continue to reverberate. 3. What factors should you considerSovereign debt and the impact of austerity enters the top 10 list when expanding globally?for the first time.Political shocks is also new to the top 10 list, with uncertainty and 4. Which supply markets andeconomic volatility affecting not just emerging markets but also Europe. categories should you target? Are you sourcing from the right locations to be cost competitive? Insights 5. How do you preserve value whileErnst & Young estimates that cutting costs by just 1% can help improve minimizing costs?bottom-line results by as much as a 10% boost in sales.Firms are using technology to improve productivity, introducing moreflexible working practices and re-engineering supply chains to serviceemerging markets growth.Page 13 Business Pulse

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Stakeholder confidenceTo see the full list of self-assessment questions, download the full reportStakeholder confidence covers: Self-assessment questions Risks 1. How do you develop insights into the possible impacts of shifts inRegulation and compliance is listed as the seventh-biggest risk facingcompanies and remain a concern to the next few years. government regulations on business strategy and performance?Expansion of government’s role is cited as the sixth-biggest risk.This is driven in part by tightening regulation. 2. How do you evaluate the way in which new regulations or laws can create new markets for specialized products or services? 3. What capability do you have in scenario analysis and taking pre- emptive action to offset any impact Opportunities of changes in a government’s role?Excellence in investor relations is ranked seventh, highlighting the 4. With whom do you collaborateimportance of a broad funding base in today’s relatively tight credit to track changing regulations andworld. seek compliance assistance?Leveraging CSR and public confidence is ranked eighth overall and 5. How do you reduce your exposureexpected to rise to seventh in the coming years. This is especially true to share-price volatility?in developing markets. 6. How do you identify cleantechInvesting in cleantech is placed as the ninth opportunity, emphasizing investment opportunities thatthat institutional investors now demand greater transparency. are supported by proprietary technologies and multiple partnerships to minimize risk?Page 14 Business Pulse

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Customer reachTo see the full list of self-assessment questions, download the full reportCustomer reach covers: Self-assessment questions Risks 1. How do you effectively evaluate rapid-growth markets to ensureEmerging technologies are still narrowly considered a top 10 risk,ranked ninth, down from fifth in 2011: they remain a worry for many that they fit with your competenciesfirms due to the disruptive capabilities of ongoing technological and strategic objectives?development. 2. How is innovation embedded in your business model? 3. How can you work more effectively with channel partners to ensure the value proposition is easy for the market to understand? 4. How are you tracking t he risk Opportunities and adoption rates of emergingInnovation in products, services and operations is ranked in first technologies? Which ones are likelyplace. This is especially important for finding unexploited gaps in to have limited value or highexisting markets, but it is also becoming increasingly important within deployment risk?major rapid-growth markets. 5. How do you assess changesEmerging market demand growth is the second-biggest overall in factors such as adoption of IT,opportunity. workforce demographics andNew marketing channels ranked fourth, a sharp increase from 2011, the rise of social media in orderas companies see increasing opportunities in this area. to identify which emerging technologies are having the most impact?Page 15 Business Pulse

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Operational agilityTo see the full list of self-assessment questions, download the full reportOperational agility covers: Self-assessment questions Risks 1. How do you minimize variability in your supply chain whileManaging talent and skill shortages is a perennial challengefor those seeking to expand and innovate. This risk fell to fifth overall introducing more cost effectivefrom third in 2011. processes and solutions? 2. How do you plan and prepare for the increased volatility of the market you operate in? 3. Have you effectively consolidated and standardized global activities – including using a shared service Opportunities center?Investing in processes, tools and training to achieve greater 4. How do you ensure you have theproductivity is cited by executives as the second-biggest opportunity,ahead of growth in new markets. right people with the right skills in the right roles?Investing in IT is a crucial element of strategy implementation andoverall performance, and is seen as the sixth-greatest opportunity. 5. How do you ensure you have the right solutions and integratedImproving execution of strategy across business functions is systems and processes in placeconsidered more important by respondents in mature markets than their to increase collaboration?peers in rapid-growth markets. This opportunity is ranked fifth overall.Global optimization of key functions is a new opportunity on the top10 list, as companies rethink operations from a global perspective tohelp ease the pressure on skills shortages.Page 16 Business Pulse

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For more information For more information and contacts go to www.ey.com/businesspulsePage 17 Business Pulse

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Ernst & YoungAssurance | Tax | Transactions | AdvisoryAbout Ernst & YoungErnst & Young is a global leader in assurance, tax, transaction andadvisory services. Worldwide, our 167,000 people are united by ourshared values and an unwavering commitment to quality. We makea difference by helping our people, our clients and our widercommunities achieve their potential.Ernst & Young refers to the global organization of member firmsof Ernst & Young Global Limited, each of which is a separate legalentity. Ernst & Young Global Limited, a UK company limited byguarantee, does not provide services to clients. For more informationabout our organization, please visit www.ey.com.About Ernst & Youngs Advisory ServicesThe relationship between risk and performance improvement is anincreasingly complex and central business challenge, with businessperformance directly connected to the recognition and effectivemanagement of risk. Whether your focus is on businesstransformation or sustaining achievement, having the right advisorson your side can make all the difference. Our 25,000 advisoryprofessionals form one of the broadest global advisory networks ofany professional organization, delivering seasoned multidisciplinaryteams that work with our clients to deliver a powerful and superiorclient experience. We use proven, integrated methodologies to helpyou achieve your strategic priorities and make improvements thatare sustainable for the longer term. We understand that to achieveyour potential as an organization you require services that respondto your specific issues, so we bring our broad sector experience anddeep subject matter knowledge to bear in a proactive and objectiveway. Above all, we are committed to measuring the gains andidentifying where the strategy is delivering the value your businessneeds. It’s how Ernst & Young makes a difference.© 2013 Ernst & YoungAll Rights ReservedEYG no. AU1454This publication contains information in summary form and is therefore intendedfor general guidance only. It is not intended to be a substitute for detailedresearch or the exercise of professional judgment. Neither EYGM Limited norany other member of the global Ernst & Young organization can accept anyresponsibility for loss occasioned to any person acting or refraining from actionas a result of any material in this publication. On any specific matter, referenceshould be made to the appropriate advisor.ED NoneEMEIA MAS 1427.0213