A Time for Bold Moves

Accenture research looks at examples set by industry leaders to identify the strategies that allow companies to emerge as dominant high-performance businesses in their industries.

We are now in a time of unprecedented change in the global economy. While the current economic turmoil presents serious threats to many companies, it also creates enormous opportunities for high-performance businesses. The strategies companies choose to pursue during downturns can dramatically influence their results for the next decade.

While immediate tactical responses to the current environment are necessary and sensible, companies that focus exclusively on survival are missing the big picture. It is during turbulent times that companies can open up the greatest gaps between themselves and their competitors.

The current turmoil in the global economy will unquestionably result in dramatic changes in the competitive landscape. New market entry, global consolidation of industries, new business models, radically altered cost structures and major shifts in the balance of power within industry value chains are examples of the kind of moves that we can expect to see.

Rapid changes in the external market, combined with inward looking, reactive competitors, add up to big opportunities to create durable competitive advantage for companies with the vision and courage to pursue them.

But for many companies, change is difficult, particularly for those that may have developed an array of mechanisms that discourage deviation from the (now outdated) successful strategies of the past. Those capable of orchestrating a timely response, on the other hand, are likely to emerge as the dominant high-performance businesses in their industries.

• Overcoming internal barriers to change will require strong leadership and engagement by all levels of the organization—both in designing the response to the incumbent strategy and executing against it with conviction.
  
  
• New structures and processes can help, for example appointing an executive team with the responsibility and authority to design and deliver the response can help to break up the silos and create momentum for change.
  
  
• Speed is of the essence. At the same time that you are considering your response, your existing competitors and potential entrants to your market are calculating how to take share away from you.
  
  

Questions companies should be asking themselves as they design their response to the downturn include:

• How can we use this window of opportunity to fundamentally restructure and streamline the cost base?
  
  
• How can we strengthen the loyalty and profitability of our existing customer base while growing our share of the most profitable customers?
  
  
• How can we capture a higher share of value versus upstream and downstream partners?
  
  
• How can we take advantage of favorable market conditions to scale the business, acquire new capabilities and enter new markets through acquisitions?