PwC’s survey of 4,702 CEOs reveals a striking insight: partnerships are the second most impactful action for boosting 📈 revenue margins and ensuring the longevity of businesses. Incredibly, 45% of CEOs believe their companies might not survive the next decade without substantial reinvention.
This extensive global survey, encompassing CEOs across sectors in 105 countries, found that an overwhelming 97% have been recalibrating how their organizations create, deliver, and capture value over the past 5 years. Yet, they believe that they need even more transformative strategies to foster growth in the coming decades.
⚡️ Despite a generally a more optimistic outlook on global economic growth than last year, business leaders feel an increasing urgency to overhaul their business models, with those doubting their company's long-term viability without significant changes rising from 39% to 45% in just one year.
The primary challenges anticipated in the next 3-5 years?
🔺 Rapid technological change
🔺 Shifting customer preferences
🔺 Evolving government regulations
📈 Partnerships as a top profit margins driver
The survey spotlights partnerships as a key driver of profit margins, which can contribute to a 4.8% profit margin premium. This impact is second only to "developing new technology in-house." By forming alliances to bolster their capabilities, companies can achieve substantial boost in profitability, which significantly surpasses results from implementing other strategies like M&A or new pricing models (see the slide for more details).
📊 Embracing ecosystem-first approach boosts performance
Previous PwC research found that companies that lean into ecosystems significantly outperform their peers, creating more value than any firm could achieve alone.
Companies that lean into ecosystems are
✔️ 1.7X faster to market
✔️ 1.2X more flexible and agile
✔️ 2.3X more innovative
In ecosystems, as compared with the typical supply chain model, value is created through opening more channels: by recruiting more users, increasing the size of the market, and making consumer information and demand more transparent. Working through ecosystems lends credibility to solutions and creates positive feedback loops that ultimately push scale.”
💡 For CEOs, understanding how to navigate evolving ecosystems is paramount
The message is clear: “If you’re running an organisation or supervising its management, the task at hand is to envision the future ecosystem in which you intend to operate. Beyond understanding which types of companies will perform what roles, you have to develop a clear view on how value pools are going to shift.”
In the face of such transformations, how are you leveraging the power of partnerships and ecosystems to future-proof your business?
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