Beating the odds
by Carlos Mira, Cristóbal José Colón, Clàudia Querol, Cristina Taroiu
December 2017
Collaboration strategies will bring success in a competitive environment

The world is undergoing unprecedented changes. As competitive landscapes are being transformed and unprecedented chunks of value are being redistributed from former leaders to web-scale platform players, the importance of understanding, learning from and adapting to the new environment becomes critical. We identified five main trends we believe are currently shaping the business environment, and will continue to do so in the future:

  • Growth is shifting from developed to emerging markets
  • Technology is changing consumption behavior and sending ripple effects across sectors and value chains
  • Borders between traditional markets are blurring, creating a level playing field for successful new competitors
  • The Industry 4.0 opportunity will be game-changing across value creation chains
  • Ethical and sustainability-related pressures on business are intensifying

The urgency to act in the face of the described converging trends is growing, and executives would do well to prepare their businesses for what lies ahead. We believe there are three critical imperatives for companies to tackle the challenge:

  1. Define – or redefine – your company´s long-term vision. Have a clearly articulated view of where the business is going and, equally fundamental, why.
  2. Build the right competencies and capabilities. Identify the critical competencies and capabilities needed, as well as the best way to fill the gap by not only developing your strengths but by leveraging the strengths of the appropriate partners.
  3. Build the right organization. Ensure that the organization can effectively develop and manage the required competencies and capabilities.

The successful implementation of the steps depends on some critical factors. First, an alignment between vision, strategy and organization (in terms of structure, talent and processes). Second, the choice of the right partners to undertake the journey, and even more critical the ability to steer and adapt dynamic collaboration arrangements beneficial to all parties. Third, an organization that is able to experiment, learn and incorporate new knowledge in the face of volatile environments.

1. A brave new world

New, innovative companies are spiraling upwards on a wave of success. While former leaders struggle to survive and web-scale platform players disrupt industries capturing unprecedented chunks of value. As this progresses, the importance of understanding, learning from and adapting to the new environment becomes critical. Below, we highlight some of the main trends currently shaping the business environment, and that we believe will continue to do so in the foreseeable future.


Growth is shifting from developed to emerging markets

The global middle class had reached 3.2 billion people at the end of 2016, according to Brooking Institution, up from 2 billion 10 years before. At the same time, it is currently at its peak historic growth rate. This implies that in just a few years a significant milestone will be reached, at which more than half of the 7.5 billion world population will live in middle-class or rich households. The growth is expected to be far from even at a global level, however. The middle-class population in Europe and North America is expected to stagnate, while most of the growth to 2030 will come from the Asia-Pacific region. (See Figure 1.)

Figure 1: Geographical distribution of the world’s middle-class population

We expect the business landscape to change accordingly. On the 2016 Fortune Global 500 list, 197 companies originated from the Asia-Pacific region, up from 116 in 2001. As growth shifts toward the region, we expect a tremendous advance of local large corporations from Asia-Pacific. The additional spending associated with this growth holds the promise of high-gain opportunities. An important caveat, however, is that for most companies the strategy and positioning of today will probably not do the trick. This is the case whether a company is just to survive, or become one of the up-and-coming leading global businesses of the future.

Figure 2: Customer journey evolution