TORONTO, Feb. 12 /CNW/ - Leaders of consumer goods companies are less
confident than ever about boosting their revenues. The figures from
PricewaterhouseCoopers' (PwC) Global Annual CEO Survey highlight a significant
reduction in CEOs' optimism - only 27% of consumer goods leaders are very
confident about boosting their companies' revenues over the next 12 months,
compared with 50% of respondents to PwC's survey last year.
The survey of 130 consumer goods leaders indicates that the industry will
undergo further cost-cutting as CEOs struggle to keep their companies afloat.
Over 30% of respondents anticipate redundancies. However, surprisingly, 34%
plan to hire more people, possibly due to the need to maintain a strong skills
base. Almost all respondents rank the retention of key talent as important or
critical to their company's long term success. Despite this, 62% of those
surveyed say that they have problems recruiting and integrating younger
employees, while 56% report difficulties in providing an attractive career
A further aspect of cost-cutting is the shift by CEOs to reduce new
product development initiatives. Less than 20% of consumer goods CEOs intend
to focus on this in 2009. Instead 40% of respondents plan to focus on
penetrating their existing markets more effectively, believing it to be the
best opportunity for growth in the current economic climate. New product
development should remain part of the CEOs strategy, however.
Despite the CEOs intense focus on challenges brought about by the
downturn, they are still concerned about environmental issues. Over half
believe that the world's dependence on carbon-based energy sources will have a
negative impact on their companies and as a result nearly 90% say they are
reducing energy costs through operational improvements.
Consumer goods CEOs also worry about getting access to other natural
resources - particularly fresh water. Three-quarters believe this pressure on
natural resources will intensify. Some consumer goods businesses have already
started to experience raw materials shortages and PwC expects this trend to
increase, so a longer-term outlook is critical.
Supply chain risk is a further challenge. Extending a supply chain,
especially into the emerging markets, brings considerable risks as visibility
and control become significantly more complex. The economic downturn is likely
to exacerbate these challenges, as companies will be trying to cut further
costs. CEOs may also face sudden changes as suppliers go out of business and
may have to be able to scale down as demand falls, without impairing their
ability to ramp up production when consumer confidence recovers.
"Consumer goods CEOs now have to juggle more challenges than ever
before," says Christopher Kong, Leader of PwC Canada's Retail and Consumer
Practice. "They have to contend with immediate problems like the global
recession, while simultaneously taking into account long-term systemic risks
such as climate change and the impact of demographic challenges on the talent
pool. The ability to balance these sometimes conflicting demands is
fundamental to staying competitive in the longer term to create a sustainable
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