The new imperative for APAC industries
Automotive and industrial equipment companies in APAC know disruption is a given—they see it in their industries every day. They recognize that continuous reinvention is now a necessity if they wish to shape their leading position in the industrial future. A host of global “megatrends”—artificial intelligence, the IoT, robotics and automation, digitally reinvented products and more—are driving profound and permanent change in both technological possibilities and customer expectations.
Three-quarters of all industries have seen increased levels of disruption on multiple fronts since 2011. Accenture’s Disruptability Index 2.0 shows just how vulnerable automotive and industrial equipment companies are to even more disruption in the years ahead.
The implication? Players in these sectors must adapt their traditional product and engineering focus for a very different kind of world—one in which digital and autonomous technology dominates.
The secret to growing business value in APAC
Amid all this change, how can established industrial players in APAC best ensure their companies continue to thrive?
With revenues contracting in their core businesses, they must be prepared to reinvent, adapt, innovate and reinvent their business models—and secure the region's position as an engine of growth in the industrial future.
They need to develop new investment strategies that suit the unique nature of their circumstances while finding the right balance between the timing, scale, and direction of investments in core and new businesses.
Accenture’s three-part Wise Pivot methodology guides a company as it shifts towards new sources of value while continuing to enjoy a strong and profitable core:
How are APAC companies managing the Wise Pivot?
To find out how automotive and industrial equipment companies are managing this challenge, Accenture conducted in-depth research into 313 industrial majors in APAC, assessing them on both investment capacity (liquidity and access to financing) and investment velocity (direction and pace of capital reallocation to the New).
This report sets out our findings.
It’s a complex picture, with a variety of approaches found right across the region and across industrial sub-sectors. In most areas, “determined” companies are the most prevalent (those with high capacity and high velocity).
But a sense of caution is also evident. A quarter of automakers are “reserved” (high capacity but low velocity) and nearly the same proportion are “restrained” (low capacity and low velocity). And over a third of industrial and electrical equipment manufacturers and automotive suppliers are also “restrained.”
The Pivot levers that bridge companies to the New
The good news? The research uncovers a host of trailblazer companies who are showing the way forward—and the qualities that their investment strategies share:
- A strong commitment, from the top, to new business models, new operating models and the digitized enterprise.
- A willingness to unlock synergies between existing and new businesses and fuel growth through smart connected products and experiences.
- A determination to scale the new intelligently, especially through ecosystem partnerships, platform plays and “outside-in” innovation.
- The foresight to rethink operating models, using innovations like the Digital Service Factory to deliver greater innovation agility and faster time to market.
These qualities are evident in five key Pivot Levers our research identifies:
Our report also highlights a selection of these trailblazer APAC companies, diving into the detail of how they’re realising the Wise Pivot and explaining how they’re bringing a uniquely potent combination of innovation mindset and careful investment to their growth strategies.
The APAC industrial future in your hands
The trailblazers, and others like them, are offering a model for the whole industrial sector in APAC.
Ultimately, the automotive and industrial success stories of tomorrow will be written by the companies that know how and when to pivot wisely to the New.
Those who succeed, adapt to thrive. They use widespread disruption to their advantage, harnessing it to accelerate growth. They have the courage to reinvent the business, but in a careful and considered way.
That’s what we call the Wise Pivot—and it’s the secret to shaping the industrial future across the region.
Ready to get started?
Begin by asking these key questions of your own organization...
- How do we balance the need to scale new sources of value with the need to continue growing our core business? What services do our customers value today—and what will they value tomorrow?
- How can we transform our existing organization to release capital for vital investments in the new? How do we prioritize those investments? What do we buy and what do we build? What data can we leverage to create new insights and new value for ecosystem stakeholders?
- Which combination of the five Pivot Levers will best help us make the shift in a careful, considered and sustainable way? What are the operating models and external partnerships that would be necessary to support it?
1Business Wire (26 June 2018)