As companies search for new areas of growth post-recession, emerging markets and demographic shifts – once thought to be hot spots for business expansion – likely will not be enough for many companies to bolster the bottom line.
That’s according to a new research summary from Accenture that finds that growth is more likely to come for the companies that can effectively target and respond to variable consumer behavior.
Accenture has also analyzed 20 of the industries and sectors – including fair trade goods, video on demand and low-cost airlines – that are associated with targeting consumer behaviors, according to its survey of 10,000 online consumers in 10 countries.
“When we ran the numbers, we saw that market size for just that group of 20 industries is projected to more than double, from $2 trillion in 2012 to $4.5 trillion by 2016, with an expected compound annual growth rate of more than 20 percent,” according to Accenture. “That’s three and a half times faster than the projected growth in emerging economies, and more than 10 times the projected rate for advanced economies, over the same period.”
To find out if companies are fully prepared to capitalize on this growth potential, Accenture has also studied the world’s 3,000 largest public companies, focusing on those firms whose median revenue growth most exceeded their peers in the previous three, five and 10 years.
Accenture finds companies that have achieved growth by tapping changing consumer behaviors have three common characteristics: an analytical toolkit, an adaptive mindset and an agile culture.
Additionally, the companies embrace advanced analytics to understand their customers and improve the customer experience, according to the research firm.
For example, Accenture points to gaming company Activision Blizzard that uses data analysis to understand the preferences of its customers.
“Activision has also used what it gleaned from analytics to successfully enter the mobile games market. Although many gamers remain loyal to their trusty consoles, the company recognized that mobile gaming has been gaining market share,” according to the report. “To meet this challenge, the company is developing new technologies to tailor mobile games for its customers.”
For companies to effectively create value in the current competitive and economic landscapes, they should embrace strategic risk, the balance between risk taking and business preservation, notes Henry Ristuccia, a partner with Deloitte & Touche.
While many senior executives understand the importance of managing the reputation of the company in a big data world, many only view this through a crisis management lens, according to Ristuccia.
“Instead, they should prepare to get in front of potential adverse events by understanding their supply chain, the risks their operations might be taking, and where they are vulnerable in every aspect of their business,” Ristuccia says. “They should also look for ways to mine big data effectively. Organizations recognize the volume of data available to help manage risk, but they have to separate the meaningful information from the noise. Then they can use the data to build a strategy or communications program that addresses what the public wants and needs from a risk standpoint.”
In addition, businesses can use big data to determine asset allocation, investment strategies and operational changes, all of which fall under risk management, he notes.
“Big data and social media present significant opportunities for companies to change their business models and attendant risks, but not everyone thinks this way,” according to Ristuccia. “Those that don’t miss a real opportunity to leverage the digital age to improve the way they run their businesses. That’s where risk and opportunity intersect.”
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