STRATEGY & CONSULTING
Forward-Looking Macroeconomic Insights
The foresight you need to anticipate change and understand how major global macroeconomic shifts impact your corporate strategy.
5 MIN READ
August 21, 2023
We offer strategic advice to inform C-suite strategic planning, corporate development, customer strategy and M&A. Our goal is to translate complicated trends into simple, pragmatic recommendations for our clients.
We provide detailed business insights on key economic trends, such as how consumer behavior is changing, corporate finance developments and risk analysis. We help senior executives assess economic risks and monitor key trends, as well as support business-critical modeling and analysis.
We have hubs in the US, Europe and Asia and work across a wide range of industries to help businesses address the most important macroeconomic challenges for their sector. And our macro-analysis helps clients to carry out scenario and impact analysis, track industry value shifts and understand supply chain exposures.
Last year we witnessed an upward trend of activist campaigns, with a growth of over a third compared to 2021. The challenging global macro environment—characterized by rising inflation, high interest rates and geopolitical tension—has made it more attractive for activists to target companies with room for improved returns. Additionally, these investors hold significant capital, which provides them with resources to deploy.
While activist investors may focus on the goal of creating long-term value, their intrusion may be disruptive to the business. These investors use a variety of tactics to pressure management and force them to make changes.
To protect their companies from being targets, management teams should adopt an activist mindset and proactively assess vulnerabilities. Regular reviews of business performance, operations and strategy are essential—especially in a challenging economic environment
To self-disrupt and protect the business from activist capture, corporations should consider the following preventative measures.
1. Stress-test assets to confirm alignment with firm-wide strategy and return expectations.
2. Re-evaluate long-term value creation thesis.
3. Revisit corporate structure and unit economics to improve overall enterprise agility.
4. Put ESG risks on top of mind.
While making changes, transparent communication is key to maintaining clarity and building trust with shareholders. They should be engaging frequently with institutional investors to discuss long-term strategy, gather feedback and address any concerns in a timely manner.
So, while the pace may moderate, the rebound in activist campaigns driven by global economic conditions remains a prominent trend in the corporate landscape. Leaders need to be prepared and “think like an activist.”
Global manufacturing woes continued to drag down growth in major economies in July:
In services sectors, slowing momentum in July is consistent with a fading post-pandemic demand impulse and ongoing consumer belt-tightening. Cooling job growth and lower vacancies in services are further signs that companies may be preparing for more demand softening.
Amidst high interest rates and the ongoing cyclical rotation of global demand away from goods, manufacturing companies and their suppliers should prepare for ongoing revenue headwinds. Though there may be some pockets of demand strength related to industrial policy incentive-funded investments, overall, manufacturers should be considering rationalizing capital budgets and slimming inventories.
Companies should be wary of growing complacent about inflation and shifting their planning baselines to “soft-landing” scenarios. Additional monetary policy tightening, and demand destruction may be needed to squeeze residual core inflation out of the system, and the path to this endpoint may exacerbate financial pressures on highly leveraged and cyclical companies and trigger bankruptcies.
Managing Director – Accenture Strategy, Macro Foresight Global Lead
Senior Manager – Accenture Strategy, Macro Foresight Europe Lead
Principal Director – Accenture Strategy, Macro Foresight North America Lead