Growth Strategies for Business
Deloitte and Australian Industry Group Survey, October 2010
The latest Australian Industry Group/Deloitte Private CEO survey Growth Strategies for Business has identified strategies that businesses are adopting to ensure growth at a time when many business sectors are coming under increasing pressures from the higher dollar, skill shortages, wage rises and the expectation of hikes in interest rates. The survey also identifies actions that governments can take to facilitate business growth and profitability.
The ability for businesses to improve their market share, form alliances, take part in mergers and add value to existing products and services are among the key growth strategies business are implementing. In addition to these strategies, the almost 400 companies surveyed have also identified a number of priority areas where they are seeking external assistance to achieve their growth ambitions. These include strategic planning, people management and process improvement.
Businesses across construction, manufacturing and services continue to face challenging conditions with close to one-third of small businesses recording negative growth over the past twelve months. Cash flow restraints, weak consumer sentiment, the strong Australian dollar together with labour constraints continue to restrict growth across industry.
Encouragingly, most companies anticipate a lift in profits over the next year with the services sector the most optimistic, despite recent sluggish conditions. Also, three-quarters of all businesses surveyed expect to add additional staff over the next couple of years with public companies ranking people management & human resources as the highest priority area for growth.
Australian Industry Group/Deloitte Private CEO survey Growth Strategies for Business key findings:
- Businesses report that improving their market share, forming alliances, taking part in mergers and adding value to existing products and services are among the key growth strategies
- Strategic planning is seen overall as the area most needing attention in preparation for an economic upturn and this is highly supported by construction companies. However talent management & human resources is the highest priority for public companies (more than 20% of respondents). This is also seen as the key focus for the services sector. Businesses in manufacturing view improving processes as key to preparing for an upswing
- Cash flow restraints (74.5% of respondents), weak consumer sentiment (50%) as well as the strong Australian dollar and labour constraints continue to restrict growth across industry
- Almost one-third of small businesses recorded a reduction in profits over the last year
- During the past twelve months the services sector has performed the strongest with almost half of respondents in that sector recording a 10% profit growth and one quarter recording a more than 20% lift
- Most companies anticipate stronger profits over the next twelve months, with the services sector the most optimistic
- Almost 80% of all companies surveyed view skills shortages as an important constraint to business growth, manufacturing (75.5%), construction (84.3%) and services (77.2%)
- Three-quarters of all businesses expect to hire new staff in the next couple of years
- Managing the economy and protecting it from recession was identified as the key priority for government (28.2% of respondents).
Download the full report and media release below.