CEOs facing major challenges – in Switzerland and around the world

in Industry insights, 22.07.2015

A global KPMG survey of over 1,200 CEOs reveals the importance of transforming business models and the battle for satisfied customers. In Switzerland, these findings are even more relevant in light of the strong franc, negative interest rates in real terms and unresolved issues surrounding the country’s bilateral relations with the EU.

Forecasts for global growth optimistic

Overall, more than 60 percent of the executives surveyed are anticipating healthy economic growth over the next three years. Their confidence in market growth rates is also reflected in what they are forecasting for their own workforce, with 78 percent expecting their headcount to increase and only 3 percent likely to downsize.

Skilled employees in high demand

Identifying and closing skills gaps is key if a company is to achieve its growth targets. Of the CEOs surveyed, 30 percent are anticipating difficulties in recruiting skilled staff, particularly for strategy, technology, sales, production and finance roles. This challenge is being compounded for Swiss companies by the impending implementation of the popular initiative ‘Stop mass immigration’.

Business models under pressure

Seventy-four percent of respondents revealed that their current business models had come under heavy strain. Companies are facing increased pressure to innovate. Newcomers – changing the market with their unconventional approaches and technologies – are posing a threat to established firms. For instance, providers of new forms of online services are also rewriting the rule book for many different industries in Switzerland such as banking, publishing and the media as well as transport and the hotel sector. Sixty-six percent of CEOs went as far as to express concern about the future relevance of their products and services in general, and nearly three quarters (72 percent) are struggling to keep up with new technologies.

Concerns over customer satisfaction

Technological change is making companies interact with their customers in a new way, with businesses unable to meet the demands of today’s customers facing increased competitive pressure. Mirroring this, the CEOs surveyed were most concerned about customer satisfaction and loyalty, with 86 percent seeing a genuine risk that lower customer satisfaction could curb demand. The ability to analyze large volumes of data is playing an increasingly significant role in the battle for satisfied customers. The companies that are coming out on top are those that can generate relevant information on their customers’ behavior and requirements and incorporate it into product development within a reasonable timeframe.

Specific challenges facing Swiss companies

Swiss exporters will welcome the generally optimistic growth forecasts for Europe and Asia expressed in the CEO survey. However, there are some clouds on the horizon: the persistent strength of the Swiss franc, uncertainties over negative interest rates and the unresolved issues surrounding the country’s bilateral relations with the EU. The technology-driven transformation of business models, the question of innovative strength and the battle for satisfied customers are also very high on the agenda of CEOs at Swiss companies. Firms that tackle these challenges promptly will be able to look to the future with confidence.

 

 

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