Consumer and Industrial Products: The Shift Index 2009Industry metrics and perspectives |
Downloadable versions of the individual sector reports for the automotive, consumer products and retail sectors are available in the Attachment section located at the bottom of this page.
Automotive
The automotive sector is among those experiencing the foundational forces of the Big Shift most strongly. Competitive intensity has been driven by greater global competition, supported both by trade liberalization and more robust digital infrastructures that facilitate global production networks.
Financial performance in the U.S. automotive sector, as measured by average return on assets (ROA), has fallen from 10.1 to negative 2.9 percent, despite moderate gains in labor productivity that exceeded those in the U.S. economy as a whole. Higher productivity was itself the result of increased levels of automation and the offshoring of labor-intensive components.
These findings reflect a mature industry undergoing massive change due to globalization of the industry and its markets—resulting in heightened competitive intensity and declining profitability.
Although the entire industry has been affected, the supplier sub-sector, in particular, has seen its returns wiped out. This has culminated in a squeezing out of the bottom performing suppliers over the past few years.
Consumer Products
The consumer products and retail sectors have not yet felt the dual impact of the Big Shift—intensifying competition and declining ROA—but are likely to soon.
Despite a slower relative pace of competition, the consumer products sector is not without its own signs of heightened performance pressure. The winners are barely maintaining position, while the losers are increasingly harder hit.
The gap in asset profitability between top and bottom performers, for instance, has widened rapidly in recent years, with the top quartile performers gradually losing asset profitability, while the bottom quartile performers experience a rapid deterioration in asset profitability. Moreover, the companies that do make it to the top in the consumer products sector are having difficulty staying there.
The rate at which consumer products companies lose their leadership positions (topple rate) has increased more than 25 percent since 1965 and is slightly higher than for the overall economy.
Retail
In the retail sector, the effective use of existing and emerging technologies has been and continues to be a differentiator.
Technology affects almost all aspects of the industry from designing and manufacturing products that are in demand, to moving products efficiently through the supply chain, to providing consumers with more ways to purchase goods (online, through mobile devices, etc.), to collecting and analyzing sales and consumer data and anticipating future behavior.
Although retailers are constantly challenged by the costs of investing in new technology, especially in economic downturns, not investing is not a viable choice. Most large retail organizations have recognized the benefits to be gained from technology, and as a result, investment in retail technologies has risen dramatically over the last decade, in many cases for the first time since the widespread adoption of the bar code scanner.
Additional Industry Resources
Explore Deloitte's industry pages to learn more about our industry programs.
As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.
Last updated
Shift Index Industry Perspectives: Automotive
(1986.13 KB)
