wipro and forbes insights' global cxo outlook: growth strategies for 2012 and beyond
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Global CXO outlookGrowth Strategies for 2012
and Beyond
© 2011 Wipro Ltd - Confidential
Agenda
3
4 Going green for business growth
1 Introduction
2 Key findings
Seeking the key differentiator
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4 Going green for business growth
5 Developing opportunities in the developing world
6 Methodology
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Global CXO OutlookAn Introduction
IntroductionWhat are your company’s current top business
priorities?Wipro in association with Forbes Insights, conducted an exclusive survey in Feb 2011 of more than 300 CEOs and other C-level
executives at global enterprises
Areas of focus of the study
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Strategic Innovation
Sustainable Development
Emerging Markets
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Key Findings A snapshot of insights from the survey
Strategic innovation
• Strategic innovation is more important than ever to driving growth• C-level executives see innovation as a way to differentiate their businesses, particularly following the 2008-09 recession
• Speed-to-market is necessary for successful innovation• Cost remains the biggest hurdle to fostering innovation• Paying attention to best practices is the most effective way to foster innovation
Key Findings
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Sustainable development
• Executives see a very clear business case for using “green” business practices• Embracing green business practices as part of a corporate innovation strategy is essential to their success• Green IT is a priority for more than three quarters of companies• Executives see investment and expansion into emerging markets as crucial to their strategies today and in the near future
Emerging markets
• Expansion into emerging markets is being driven by lower costs and a higher rate of growth, according to executives surveyed
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Strategic InnovationSeeking the Key Differentiator
Strategic Innovation : the growth engine
Did the economic downturn of 2008-09 change your company's approach to innovation?
Importance of innovation
More than 90% of respondents to thesurvey who wholeheartedly agreedon the importance to business ofinnovation in products and services,and business practices
“It is critical to our customers’ success that we continue to push the boundaries of the unknown.”- Sophie Vandebroek, Xerox
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your company's approach to innovation?
• Disruptive approach to the market
• Partnership with customers
LightRadio
Towards effective innovation
• Three out of four respondents say that
robust data should underpin all decisions and
competitive intelligence to drive business
innovation
• Toyota practices kaizen or “continuous
improvement,” in which teams get together not
only to problem-solve the weak points, but also
to look at what are considered the strong points
Focusing on effective innovation Case-in-point:
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• Partnership with customers
• Partnerships with suppliers
to look at what are considered the strong points
• 81% agree that getting a product or service
swiftly out to market is a critical business tactic
Getting customer input
Innovation requires getting products and/or services to the market quickly
“When there’s a big problem, we know have to change, but when there isn’t a problem, we still want to innovate.”
Norm Bafunno, Toyota
Product and service innovation is less important in developing markets than mature markets, according to 67% of senior executives surveyed.
39% of respondents point to cost as the biggest hurdle to fostering innovation
Cost is seen as bigger challenge than talent recruitment and restrictive regulatory environments
Barriers to innovation
What are the biggest barriers your company currently faces regarding fostering
innovation?
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and restrictive regulatory environments
“One way to go beyond pure technical innovation is to work
together, between research and R&D and key suppliers, to define new
approaches to be the first to market with innovative products. This is one
of the main elements of our strategy” – Jean-David Calvet,
CPO, Alcatel-Lucent
Tools for innovation
How effective do you believe the following tools and tactics are fro business
innovation?
80% of the surveyed respondents believe that attention to best practices is the premier technique
Best practices
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The next most-effective tool for business innovation is technology, rated effective by 79% of respondents
Technology
Data-based decision-making ranks third, tied with and in collaboration with customers
Data
Case-in-point: Xerox
The Xerox hub has adopted Open Innovation and is using the hub to expand partnerships with leading Indian technical and business schools
A partnership with Another partnership
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A partnership with the well-known Indian Institute of Technology, Madras (IIT Madras) to use on-demand cloud computing to improve the efficiency and economics of document-services delivery
Another partnership with IIT Madras’sRural Technology Business Incubator to develop innovative solutions to improve workflow at small technology-based businesses in rural India
A collaboration with the Indian Institute of Science on a project on machine-learning and game-theory principles to improve the performance of online service marketplaces
A project with the Indian Institute of Technology, Bombay to develop linguistic databases to provide automated translation of documents
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Sustainable Development
Going Green for Business Growth
Focusing on return rather than cost
Which of the following practices are most important to your company’s use of green
business practices?“Companies can become believers in carbon-emission reduction if they understand that by cutting their carbon output they are taking the waste out of their systems and are driving efficiencies—efficiencies that can then be converted into cost
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can then be converted into cost savings better used for growth and
expansion” - Justin Barrow, co-founder and chief innovation officer of China-
based Climate Action
Green practices are the way forward, and make a great marketing tool as they highlight the “engaged”
side of a company.
• The focus on coal created a dilemma for CLP Holdings when it debated its climate-change strategy
• CLP balanced its generation portfolio, and moved towards de-carbonization by offsetting the emissions from coal-fired generation in part with non-fossil-fuel generation and renewable energy.
• The company also changed its business approach to be compatible with global objectives for stabilizing greenhouse gas emissions to limit climate change.
Case-in-point: CLP Holdings
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stabilizing greenhouse gas emissions to limit climate change. • In 2007, CLP developed Climate Vision 2050, which sets a group-wide target of reducing
carbon-emission intensity by 75%, by 2050
“We are balancing the economic, social, and financial goals that sustainability is
all about” –Andrew Brandler, CLP
Holdings
Worldwide demand for electricity is expected to grow by 2.2% annually
through 2035, with more than 80% of that increase coming from non-OECD
countries.-World Energy Outlook 2010
Green Innovation
100% APAC region linked green practices to innovation
• Compete with western counterparts in the sustainable business
• Need to ramp up green practices to meet customers’ requirements, enhanced rules
• Tighter control on environmental degradation by Asian governments
• Heavy taxes and penalties
Reducing IT’s carbon footprint
• Data centers are the key energy consumers
• Reducing data center footprints -common element of their green IT strategies
Creating an eco-friendly framework
• Companies need an organizational framework to spur green business practices.
• What it takes to focus on environment – Strong executive leadership that is prepared to make decisions
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• Heavy taxes and penalties imposed on polluters
As part of your innovation strategy, has your company embraced "green" practices?
Is green IT a priority for your company?
Green Innovation
Which of the following elements are a part of your company’s green IT strategy?
Tackling climate challenges requires greater
collaboration across business sectors and between business, government,
academia and civil society.--World Business Council for Sustainable Development, a
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Sustainable Development, a CEO-led, global association of
about 200 companies.
After laying out sustainable-development targets in its Climate Vision 2050 strategy paper, CLP carriedout an exercise to educate its 6,000 employees
about the targets.
Establishing a framework
Companies need an organizational framework to spur green business practices
Green initiatives by companies cannot be successful without the support of national and local governments
China, for example, has set significant targets for low-carbon energy, energy efficiency, and
Case-in-point: After laying out sustainable-development targets in its Climate Vision 2050 strategy paper, CLP carried out an exercise to educate its 6,000 employees about the targets
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without the support of national and local governments
Carbon taxes will soon become widespread globally
Three out of four respondents were convinced carbon taxes would soon become widespread globally
for low-carbon energy, energy efficiency, and clean technology in its 12th Five-Year Plan covering 2011-15
India has boosted allocations for clean environment schemes in the 2011-12 budget
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Emerging Markets
Developing Opportunities in the Developing World
Emerging markets
Venturing into developing markets
• Faster and higher growth potential compared to more mature markets.
• Greater purchasing potential of consumers
Challenges
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China and India are the most popular investment spots
Challenges
• Poor distribution channels
• Skill shortages
• Volatile political climates
• Strong local and international rivals
The corporate mood appears buoyant heading into 2012
The trick for foreign entrants may be to formulate business plans that consider the socio-economic trends in those emerging markets, and correctly identify the
opportunities and challenges there.
Emerging Markets
In which emerging markets does your company see greatest opportunities for
growth in the next two years
“For companies to grow fast organically, it is necessary to grow fast in emerging markets where the rate of growth is
quicker” -Wong Wai Ming, senior vice-president and CFO of Lenovo
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Importance of investment/expansion into emerging markets
president and CFO of Lenovo
Emerging Markets: the driving forces
What are the key drivers for your company to target emerging markets?
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Lower cost continues to be the key driver for
targeting emerging economies
Emerging markets: the detractors
What are the key drivers for your company to target emerging markets?
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Poor distribution channels and
political instability continue to hinder
geographical expansion
• Lenovo has launched its LePad and IdeaPad but only within China, its strongest market.
• The initial focus is always on China – it accounts for about 46% of its worldwide sales, and where it has strong brand recognition
Protect and attack strategy
• This involves staggered launches in which it protects the core business in China and mature
Case-in-point: Lenovo
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• This involves staggered launches in which it protects the core business in China and mature commercial markets, and attacks in fast-growing emerging markets such as India, Russia and Brazil.
“We plan our business on a global basis but when we launch, we identify a market that will give us the best chance of success.”
–Wong Wai Ming, Lenovo
Case-in-point GAP
“With regard to new countries, we take a different approach depending on the market. For instance, first we identify large markets, like China and Italy, with significant long-term upside for our brands and decide to make the
investment to own and operate our own stores, whether it’s full-priced brands or our
outlet models” -- Gap spokesperson.
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• Opened four flagship stores in Shanghai and Beijing• Offers stylish, quality products at accessible prices, all tailored to the Chinese fit• Strategy for global growth - Leverage core brands across multiple platforms, channels and
geographies
outlet models” -- Gap spokesperson.
GOAL
Gap’s goal is to improve top-line revenue, and to increase the percentage of its online and international revenue to 30% of total revenue by 2014, up from 22% of total revenue in 2010.
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Methodology
Methodology
Wipro, in association with Forbes Insights surveyed 308 C-level executives at large global enterprises with annual revenues of more than US$500 million.
About a third worked for companies with annual revenues of $US5 billion or more.
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All respondents had C-level titles, including CEO (40%), COO (10%), CFO (13%), CIO (15%), CMO (10%), and other C-level executives (13%).
They represented a wide range of industries, including manufacturing (28%), banking/financial services (23%), retail (10%), telecommunications (10%), insurance (7%), and energy (7%)
Geographically, 37% of respondents were located in the U.S., 6% were located elsewhere in the Americas, 39% were from Europe/Middle East/Africa, and 18% were from Asia Pacific
To read the complete report please visit the link belowhttp://www.wipro.com/insights/cxo_report.htm
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http://www.wipro.com/insights/cxo_report.htm
Wipro set up the Council for Industry Research, comprised of domain and technology experts from the organization, to address the needs of customers. It specifically surveys innovative strategies that will help customers gain competitive advantage in the market. The Council, in collaboration with leading academic institutions and industry bodies, studies market trends to help equip organizations with insights to facilitate their IT and business strategies.
About Wipro Council of Industry Research
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strategies.
For more information on the Research Council visit www.wipro.com/insightsor mail [email protected]
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