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  • EY Profit or lose - EY - Global
    we overcome them How effective do you consider your localmanagement team to be at managing the following aspects of its business Chart shows percentage who believe they are very effective Profitable growth close 8 Create a culture that mandates disciplined execution The new importance of Asia s emerging markets means that the ability to execute in Asia is now critical to the overall corporation s long term health This also means that local execution is now more scrutinized Some Western multinationals are establishing a second home in Asia by relocating category leadership to the region Companies should focus on creating a culture that prioritizes execution and places it within a robust framework of repeatable processes and governance models Questions for management Do we have the right metrics in place to track and measure execution performance and are they sufficiently granular Can we respond quickly enough when changes in the external environment require a different approach to execution Do we have the right oversight at a senior level to embed a focus on execution into the company s culture How effective do you consider your local managementteam to be at managing the following aspects of its business Profitable growth close The center of gravity for consumer products has shifted to Asia Almost every major consumer products and retail company has already taken steps to capture the huge growth opportunity presented by Asia s emerging markets But for most profitability has been a secondary consideration The role of these markets has changed and they are now at an inflection point In the past companies were comfortable to focus their efforts on driving revenue growth and capturing market share Today as economic growth in Asia s emerging markets decelerates companies need this growth to be profitable Emerging markets now must become the engines of profitability as well as growth The scale of Asia s rapidly emerging middle class remains the number one opportunity for profitable growth for consumer products and retail firms By 2016 emerging Asia will account for one quarter of the global consumer products market and generate 38 of total consumer products growth However making growth profitable in emerging Asia is far from straightforward Consumer expectations are diverse and changing Competition is intense The complexity of doing business in the region is significant Key input costs such as labor are high and rising even further To overcome these challenges companies need to walk a tightrope between several contradictions They must Be flexible but also efficient Embed local autonomy but benefit from global scale Seek out both short term gains and long term opportunities Resolving these contradictions is not easy but it will be essential if companies are to profit rather than lose in emerging markets This report presents the findings from our survey of more than 250 senior Asia based executives at multinational consumer products and retail companies We also describe a set of eight business imperatives that we believe companies need to implement to achieve profitable growth in emerging Asia In this study we have focused specifically on emerging Asia but the principles apply equally to other emerging regions of the world including Latin America and Africa Only the local execution will need to differ As economic weight shifts to emerging economies achieving profitable growth in these markets has become essential to long term growth and even survival Top Share of the world CP market growth 2012 to 2017 by region Source Ibid Profitable growth in emerging Asia requires consumer products and retail companies to reconcile a number of apparent contradictions Profit or lose We believe consumer products companies and retailers in emerging Asia need to implement eight business imperatives to achieve profitable growth Click on the segments for insights on each 1 Empower local leadership to be agile Empower local leadership to be agile but ensure they are accountable The volatility and diversity of Asia s emerging markets demands increasing autonomy at the local level Our research found that high performers tend to give local managers greater decision rights across all aspects of the business However companies must be disciplined and not permit complexity that destroys value Local managers should be accountable for ensuring that decisions are consistent within the overall framework of the company s strategic vision Questions for management Which decisions need to be taken centrally and which can be taken locally Is our decision making fast enough to take advantage of market change Do we have a suitable governance structure to enable our markets and protect our business Who has the oversight for the new emerging fast growth markets and can manage the portfolio of risks and opportunities How effective do you consider your local management team to be at managing the following aspects of its business Chart shows percentage who believe they are very effective Profitable growth close 2 Disrupt traditional approaches for local relevance Profitable localization requires multinationals to shake off traditional mature market mindsets and operating models Simply replicating these in Asian emerging markets is not sufficient due to the increasing variance of market needs as well as consumer and channel expectations Companies should disrupt their own offerings and operating models and rebuild themselves around what is needed to be locally relevant Questions for management Which aspects of our product portfolio and go to market approach do we need to change to meet the needs of the market Do we have the appetite to change as well as the ability to change What cost structure will achieve profitable growth and how can we achieve it How effective do you consider your local managementteam to be at managing the following aspects of its business Profitable growth close 3 Be granular in understanding current and future profit pools Markets channels and consumer segments are at very different stages of development across Asia A shift of emphasis from a homogenous market share growth mentality to understanding the real drivers of growth and profitability at a detailed local level is needed Questions for management Have we invested

    Original URL path: http://www.ey.com/GL/en/Industries/Consumer-Products/Profit-or-lose (2016-02-10)
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  • Disrupt or be disrupted - creating value for brand new order - EY - Global
    Global Trade Global Compliance and Reporting Human Capital Private Client Services Law Tax Accounting Tax Performance Advisory Tax Policy and Controversy Transaction Tax VAT GST and Other Sales Taxes Transfer Pricing and Operating Model Effectiveness Strategic Growth Markets How we help Entrepreneurship EY SGM Initial public offering Venture capital Family business services Transactions About Transaction Advisory Services Corporate Development Divestiture Advisory Services Lead Advisory Operational Transaction Services Restructuring Strategy Services Transaction Support Transaction Tax Valuation Business Modelling Specialty Services Climate Change and Sustainability Services CertifyPoint China Overseas Investment Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Industries Consumer Products Retail Disrupt or be disrupted creating value for brand new order Disrupt or be disrupted creating value for brand new order What is the brand new order Inside What is the brand new order 5 characteristics of the brand new order Learn to reframe re align and ruthlessly execute How effective is your execution Share Addressing this highly uncertain environment requires disruptive thinking a willingness to change and reject tried and tested ways of creating value The brand new order is an environment of continuous accelerating change and spiraling complexity It is transforming and disrupting the business landscape for consumer products companies and presenting them with huge opportunities and risks Take a closer look at the brand new order and how you can find its advantages 5 characteristics of the brand new order Learn to reframe your strategic choices re align the value chain and ruthlessly execute How effective is your execution Addressing this highly uncertain environment

    Original URL path: http://www.ey.com/GL/en/Industries/Consumer-Products/Disrupt-or-be-disrupted---creating-value-for-brand-new-order (2016-02-10)
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  • EY - Unlocking margins in consumer products - EY - Global
    points on average over the past decade This shows clear room for improvement Companies are at various stages of maturity in their approach to margin management Although many are finding it harder than ever to grow or sustain margins a small number of companies are able to deliver breakthrough margin performance So what do they do differently We believe companies need to adopt an Integrated Margin Management framework This report outlines that approach and describes the steps that companies need to take in order to embed it in their organization Doing so will require management to ask themselves some key questions Where are you today Are you aligned with your core strategic and leadership vision What is the roadmap to get you to your future state Three building blocks for delivering breakthrough margin performance 1 An integrated approach to margin management driven by senior leadership A key problem has been a lack of collaboration Approaches to margin management tended to be reactive and were influenced more by functional objectives than the business as a whole Our focus on continuous improvement means that we are constantly driving waste out of the system José Lopez COO Nestlé CP companies must look at margin holistically considering performance and opportunities in a more end to end way This means working collaboratively with internal and external stakeholders as a single organizational unit rather than as a collection of functions partners and geographies Embedding a pervasive culture of margin management starts with the vision and urgency for change articulated by senior leadership Business leaders must remain at the forefront and continue to break down the barriers to unlock the full margin potential of their products and brands By driving margin performance from the very top companies can embed it deeply into the business and make it part of the fabric of day to day decision making 2 Improved insight on margin performance to drive better faster decisions Most multinational consumer products companies have now implemented ERP platforms which have the ability to provide vast amounts of useful data However many companies find it difficult to access this data because of poor integration with other systems and a lack of standardization Even where good quality data is accessible extracting meaning from it and focusing on the right data sets is a challenge The decision we took was to get margin into the conversation and the rhythm of the business equipping people with the tools they need to manage it themselves Chris Davies former CFO for the Americas Diageo Our approach requires companies to make step changes to the visibility of performance data and then to use that information to make the right margin decisions for the organization This requires companies to address the following steps Gain a consistent view of the drivers of margin performance Look beyond the boundaries of the organization to identify drivers of margin performance Make bold decisions quickly to enable effective competition 3 An operating model with margin at its core A silo

    Original URL path: http://www.ey.com/GL/en/Industries/Consumer-Products/EY-Unlocking-margins-in-consumer-products (2016-02-10)
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  • The changing consumer products value paradigm - EY - Global
    focus on sharpening their execution across four key areas in order to deliver sustainable value Next Inside The changing consumer products value paradigm Innovating business models Does your company need to innovate Related content Building profitable retail relationships Cash on the table working capital in consumer products Contact one of our consumer products leaders today Browse by role Browse by topic Browse by megatrends Audit committee member Board member CDO CEO CFO CIO COO CRO CSMO HR director Tax director Accelerating growth Analytics and big data Capital allocation Cybersecurity Digital Emerging markets EU audit legislation Eurozone Forecast EY Entrepreneur Of The Year EY Strategic Growth Forum Foreign direct investment Funding and finance IFRS Infrastructure Innovation Mergers and acquisitions Operational effectiveness Public policy Reporting Risk Transformation Women in business 5 insights for executives Digital future Entrepreneurship rising Global marketplace Health reimagined Resourceful planet Urban world Automotive Transportation Consumer Products Retail Financial Services Government Public Sector Wealth Asset Management Banking Capital Markets Insurance Health Life Sciences Media Entertainment Mining Metals Oil Gas Power Utilities Private Equity Real Estate Hospitality Construction Technology Telecommunications Advisory Assurance Tax Actuarial Customer Cybersecurity Finance Financial Services Risk Management Internal Audit People Advisory Services Program Management Risk Assurance Risk Transformation Strategy Supply Chain and Operations Technology Strategic Growth Markets How we help Entrepreneurship EY SGM Initial public offering Venture capital Family business services About Assurance Services Accounting Compliance and Reporting Climate Change and Sustainability Services Financial Accounting Advisory Services Financial Statement Audit Fraud Investigation Dispute Services Transactions About Transaction Advisory Services Corporate Development Divestiture Advisory Services Lead Advisory Operational Transaction Services Restructuring Strategy Services Transaction Support Transaction Tax Valuation Business Modelling About Our Global Tax Services Country Tax Advisory Cross Border Tax Advisory Global Trade Global Compliance and Reporting Human Capital Private Client Services Law Tax Accounting Tax

    Original URL path: http://www.ey.com/GL/en/Industries/Consumer-Products/The-changing-consumer-products-value-paradigm (2016-02-10)
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  • EY - Consumer Products and Retail - Emerging Markets - EY - Global
    Trade Global Compliance and Reporting Human Capital Private Client Services Law Tax Accounting Tax Performance Advisory Tax Policy and Controversy Transaction Tax VAT GST and Other Sales Taxes Transfer Pricing and Operating Model Effectiveness Strategic Growth Markets How we help Entrepreneurship EY SGM Initial public offering Venture capital Family business services Transactions About Transaction Advisory Services Corporate Development Divestiture Advisory Services Lead Advisory Operational Transaction Services Restructuring Strategy Services Transaction Support Transaction Tax Valuation Business Modelling Specialty Services Climate Change and Sustainability Services CertifyPoint China Overseas Investment Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Industries Consumer Products Retail Maximize the opportunity in emerging markets Minimize the volatility of uncertain growth Maximize the opportunity in emerging markets Minimize the volatility of uncertain growth A balanced emerging market strategy opens the door to untapped markets while keeping risks under control Share Minimize the volatility of uncertain growth null Ribbon 20 20Facebook blank link Middle Content title Facebook Minimize the volatility of uncertain growth source ey com null Ribbon 20 20LinkedIn blank link Middle Content title Linkedin Minimize the volatility of uncertain growth null Ribbon 20 20StumbleUpon blank link Middle Content title Stumbleupon Minimize the volatility of uncertain growth via EYNews null Ribbon 20 20Twitter blank link Middle Content title Twitter The world s leading consumer products companies have been doing business in emerging markets for decades Others have tried to make an entrance more recently But the scale of the opportunity has often obscured the need to grow in ways that are profitable When 69 of executives say emerging markets will be their main engine of growth over the next three years the scramble to seize market share is understandable But we believe the industry has reached an inflection point Emerging markets are evolving rapidly Consumer expectations are diverse and changing Competition is intense Labor costs are high and rising Supply chains are becoming more complex The result is that profitable growth is becoming much harder to find and sustain This new environment demands a different response To succeed companies must balance a series of conflicting priorities They must be flexible and efficient They need to execute a global strategy and do so in a way that gives autonomy to local managers They must secure short term gains and generate long term opportunities By helping you find the balance that works best for your business we can guide you to new levels of emerging market success Profit or lose Asia is a hotbed of consumer products growth But what are the eight key actions that will make that growth profitable Market snapshots Global success requires local insight Our regular snapshots highlight the latest trends affecting key emerging markets India Russia Finding growth in Africa Africa s diverse

    Original URL path: http://www.ey.com/GL/en/Industries/Consumer-Products/EY-consumer-products-and-retail-emerging-markets (2016-02-10)
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  • EY Unlocking value with an effective operating model - EY - Global
    management functions operationally where it makes the most sense Do the classic geographical groupings such as EMEA or Asia Pacific continue to make sense EMEA or Asia Pacific markets may be too broad geographical clusters Companies should consider clustering markets based on the following factors Stage of development Channel structures National tastes and preferences Read more on how consumer products companies are structuring their operations in emerging Asia How do you retain local agility when centralizing a function The benefits of scale must be balanced with local operations to retain agility Some larger consumer products companies have created procurement organizations with a combination of global and regional characteristics The key question to answer is how much should be left with the local operations This approach allows for setting effective strategies innovating and deploying sustainable procurement practices at a local level What are the benefits of establishing procurement as a stand alone company The central procurement model is increasingly implemented as a stand alone company serving the group companies This provides chief procurement officers CPOs with greater control How do you navigate the complex and dynamic global tax environment Companies are looking for greater clarity about their regulatory and compliance obligations They need to understand the following and adjust the operating model accordingly This includes How to navigate the various tax regimes How tax regimes trickle down to different regulatory or legal requirements How do you need to rethink the commercial aspects of the operating model The rise of omni channel social media changing consumption patterns and the shift of economic gravity to emerging markets demand a change in commercial strategies to ensure profitable growth There are six key shifts that companies need to consider Moving from supply led innovation to demand led innovation Bringing together fragmented brand portfolios into a single centrally managed portfolio Adopting and fully integrating new channels including e commerce into the supply chain Replacing supply led pricing approaches with customer led above market pricing decisions Establishing clear account segmentation strategies and treatment Adopting a core brand management strategy rather than traditional brand product management To read a detailed account download a copy of our full report Three steps to transformation Three steps to transformation For further information download a copy of our full report Industry perspectives Industry perspectives Apparel speed and agility come to the fore The trend toward centralization Today apparel companies have a trend toward greater centralization with the main hub often located in Asia Centralized procurement models tend to deliver the most operational benefits enabling the creation of economies of scale Regionally focused principal companies adapt quickly to changing consumer demands and provide rapid time to market Read more Aggregating inventory to minimize markdowns Apparel companies should also seek greater flexibility through their distribution centers By aggregating as much inventory as possible they can react quickly to changing demand reallocating goods among wholesale retail and e commerce sales Optimizing relationships with licensees In recent years stronger relationships have emerged between apparel companies and

    Original URL path: http://www.ey.com/GL/en/Industries/Consumer-Products/EY-unlocking-value-with-an-effective-operating-model (2016-02-10)
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  • EY - Integrating niche brands and sustaining value - EY - Global
    we help Entrepreneurship EY SGM Initial public offering Venture capital Family business services Transactions About Transaction Advisory Services Corporate Development Divestiture Advisory Services Lead Advisory Operational Transaction Services Restructuring Strategy Services Transaction Support Transaction Tax Valuation Business Modelling Specialty Services Climate Change and Sustainability Services CertifyPoint China Overseas Investment Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Industries Consumer Products Retail Staying healthy Staying healthy Are you driving the most value from your niche acquisition Share In a bid to capture the next generation of growth large consumer products companies are acquiring niche brands see infographic here With the overall M A market set to improve steadily food majors are well placed to pick up the pace of niche acquisitions Despite a relatively stagnant food market the health and wellness segment has enjoyed robust growth in recent years Sales in the sector are set to top US 100b in 2015 according to our Consumer Products and Retail Global Capital Confidence Barometer The challenge though lies in driving value from these deals Without a balanced operating model niche acquisitions can go wrong So far the most prevalent strategy has been to keep the acquired brands as stand alone entities with little or no integration with the parent But major food companies are re evaluating this strategy Three steps to integrating niche brands The key to making niche acquisitions work is to integrate them effectively without destroying the essence of the acquired brand There are three basic steps to getting a niche brand acquisition right Understand and articulate the deal rationale Protect and preserve the target s key success drivers Integrate everything else What s the best target operating model There is a wide spectrum of possible operating models for niche brand acquisitions but no matter which one you choose your objective should be to balance brand equity with commercial growth Alternatives range from a decentralized stand alone model to a fully integrated functional model Keeping it simple six critical success factors The key to making niche acquisitions work is to find the right operating model to balance brand equity with commercial growth The guiding principles are simple keep the true drivers of brand value stand alone and integrate everything else 1 Establish clear ownership and accountability for each initiative or project This also means aligning executive goals and incentives with program objectives and benefits 2 Focus on benefits Place a relentless focus on business value and link this value to financial statement line items Define processes to sustain benefits and conduct follow on audits Prioritize and implement initiatives to deliver value early create momentum and partially or entirely self fund the program 3 Identify unique capabilities Concentrate on building a priority set of business capabilities that will

    Original URL path: http://www.ey.com/GL/en/Industries/Consumer-Products/EY-integrating-niche-brands-and-sustaining-value (2016-02-10)
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  • EY - 2015 Global Corporate Development Study: a consumer products perspective - EY - Global
    Support Transaction Tax Valuation Business Modelling Specialty Services Climate Change and Sustainability Services CertifyPoint China Overseas Investment Network Family Business Services French Business Network Global Business Network Japan Business Services Careers Students The EY difference Your role here Your development Life at EY Joining EY Global Delivery Network Experienced Advisory Assurance Tax Transactions Industries The EY difference Your development Life at EY Joining EY Global Delivery Network Alumni Home Industries Consumer Products Retail A consumer products perspective 2015 Global Corporate Development Study A consumer products perspective Share The latest Global Corporate Development Study CDO finds the consumer products CP industry faces challenging organic growth including flat to declining growth across many categories As a result many companies are taking a closer look at their portfolios to remove underperforming brands with falling sales and margins Many CP companies are looking to simplify by jettisoning non core brands as they seek to revitalize growth and reduce costs Top themes among the CP respondents Higher turnover in the executive suite We see signs of the impact of a challenging market with a high number of C suite respondents in their roles less than 12 months CP CDO respondents were twice as likely to have been in their roles less than 12 months M A valuation benefiting from scarcity of quality assets 2014 was quite a busy year for CP Total M A deal value increased by almost 80 to US 169b in 2014 from US 95b in 2013 Yet the survey shows that CP respondents are much less satisfied than non CP respondents regarding the valuation of acquisitions CP 54 vs non CP 70 divestitures CP 50 vs non CP 59 We feel this is important as the multiples companies are paying for many acquisitions are quite high because of the scarcity of

    Original URL path: http://www.ey.com/GL/en/Industries/Consumer-Products/EY-2015-global-corporate-development-study-a-consumer-products-perspective (2016-02-10)
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