Key trends

While still important, “classic” industrial companies are increasingly secondary to the economies of major mature markets like Europe and North America. Industrial firms made up 50 percent of the Dow Jones Industrial Average in 1980; that share fell to 20 percent in 2009.

We are in a one-time fundamental shift of activity from these major markets to emerging markets in China, India, Brazil, and Southeast Asia.

This creates substantial challenges for some of our industrial clients. These industries have to:

  • address the demands of emerging markets
  • build new capabilities to compete against emerging asymmetric competitors
  • migrate supply chains and infrastructure from mature economies to emerging ones

In addition to the challenges of capturing emerging markets our clients face additional issues like:

  • shortened innovation cycles to maintain product and service advantage
  • advanced product design and manufacturing processes to offset disadvantages in factor cost
  • addressing social cost associated with the industrials sector like CO2
  • growing oligopolistic or political control of raw materials (e.g. iron)
  • competitive distortions from governmental interventions in markets
  • more difficult financing for current operations and growth

The Strategy& industrial practice helps clients turn marginal market returns into exceptional returns through a comprehensive and unique set of service offerings.