How leading consumer products companies create extraordinary value in good times and bad (and what you can learn from them)
Many businesses believe the recession was a cyclical shift—and that consumer spending will soon return to normal. But what if they’re wrong?
In a recent Deloitte survey of more than 2,000 U.S. consumers, nine out of ten people said they have permanently changed their buying behavior, becoming much more strategic and calculating in how and what they buy. These findings suggest that consumers in the U.S. -- and perhaps in other developed countries as well -- no longer have the ability or appetite to spend at levels most consumer products companies are built to support.
During the recession, consumer products (CP) companies around the world saw their revenues and earnings decline due to competition from private labels and customers trading down. Declining business volume led to increased promotion costs and lower asset utilization, squeezing companies from both ends. Emerging markets may help fill the void, but profitable growth in these new markets can be elusive. So what’s the answer?
Through our research and experience working with leading CP companies around the world, we have observed that earnings growth alone is not sufficient to drive sustainable shareholder value. Lasting value is only created when increased earnings are balanced with efficient use of assets, a concept we are defining as Enterprise Productivity.
This report shows how a few leading consumer products companies have consistently outperformed their peers in good times and bad--regardless of consumer spending trends—and offers specific steps to help you follow their lead.