growth enablers - fifth p industry viewpoint

FIFTH P StrategyGrowth Enablers Assessment

1

Industry landscape and challenges in managing performance1

An effective way through a challenging landscape 2

The winning proposition3

How to find out more4

A combination of industry-wide issues and internal factors are impacting businesses’ performance…

A challenging industry landscape Some of the most pressing issues in CEOs’ mind

Long-term market price deflation increases P&L volatility and erodes profit margins

Highly promoted market with increased shopper promiscuity and intensified retail price war

High proliferation of brands and commoditisation of the lager category is eroding brand equity

Changing consumer taste and a growing shopper attitude towards experimentation among younger drinkers further diminish loyalty to traditional lager brands

Difficulty in objectively assessing the impact of internal forces and team dynamics on performance

Challenge in connecting detailed performance metrics with the full P&L

Focus on creating strong innovation pipelines and brand building activities that keep the business from getting into trading wars that further deflates the market

How to inject brand value back into the portfolio through effective new launches and an holistic brand portfolio strategy

Need to rebalance trade and above the line investment to focus on base sales growth through the role of the shopper and consumer

…with companies facing some long-lasting roadblocks in their quest for growth…

DIFFICULTY IN CONTROLLING TRADE SPEND VOLATILITY AND

LIMITING ITS IMPACT ON MARGIN EROSION

1Example 2Example

INTANGIBLE INEFFICIENCIES CAUSED BY INHERENT FLAWS IN

BUSINESS FOUNDATIONS

How do you measure the impact of collaboration and cross-functional interaction on your ability to perform in the market?

How do you evaluate how fit for purpose your organisational structure, processes and tools are in enabling growth?

How do you measure and create linkages between certain culture enablers and actual activities in the growth agenda?

Lack of visibility of true impact of price increases on long-term cost of trade

Inability to clearly ascertain which activities are growth enablers and which are growth detractors

2005 2006 2007 2008 2009 2010 2011 20120.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%

An example of beverage company

Trade Top 4 Trade Exc Margin GiveTop 4 Margin % Top 4 Trade % of GSV

CEO’s can cut through the complexity and implement a new approach to bring clarity on growth enablers

Have a repeatable process to evaluate the foundations’ impact on driving growth for the business

Develop a simple and actionable priority list of the most impactful enablers of growth to drive change and reduce inefficiencies

Achieve high level of clarity as to what drives growth and what detracts from it amongst the current activities of the business

1

2

3

Achieve high level of clarity as to what drives growth and what detracts from it amongst the current activities of the business

1

A clear process to decompose the structure of the P&L and the sources of growth

Evaluation of each of the current activities toward company performance

Assessment of external vs internal causes and linkages to foundations

+ 2%

- 5%

- 2%

- 2%

+ 10%

NPDs Loss in Distributi

on

Loss of Listing

Structural Increase in

Cost of Trading

Net Price

Realisation

WHAT MAKES OR BREAKS GROWTH?

- 3%Brand

Loyalty

2

GROWTH ENABLERS AND BLOCKAGES

Alignment of PEOPLE’s skills with business

requirementsAbility to

constantly monitor the COMMERCI

AL ENVIRONM

ENT

Best ORGANISATI

ONAL STRUCTURE

for cross-functional

collaboration

Cohesive CULTURE and WAYS

OF WORKING

to retain talent

Fit for Purpose

ASSETS & CAPABILITI

ES to support growth agenda

Perceived strength of

VALUE PROPOSITION in the

market

A combination of impartial assessment of capabilities coupled with qualitative statements extraction from within the teams (via interviews and targeted workshops) to arrive at a fair and holistic overview of the impact of each of these pillars on growth, benchmarked against industry peer group and best-in-class

EXAMPLE OF KEY ORGANISATION’S PILLARS AFFECTING GROWTH

Have a repeatable process to evaluate the foundations’ impact on driving growth for the business

3 Develop a simple and actionable priority list of the most impactful enablers of growth to drive change and reduce inefficiencies

A clear overview of the most critical external and internal material issues based on their impact on financial performance that provides the ability to effectively prioritise future actions and subsequent improvement programmes

Red: Severe Problems exist or future problems may ariseYellow: Business foundations can be improved to a healthier level to contribute towards achieving growthGreen : ‘healthy’ components for the time being

CULTURE &WAYS OF WORKING

EXAMPLE OF SCORECARD TO IMPLEMENT AND MONITOR IMPROVEMENT PROGRAMMES

What is the most effective way to achieve this?

LOW COST

RAPID ASSESSMENT

LOW IMPACT ON BAU & RESOURCES

ACTIONABLE OUTCOME

OUTSIDE-IN THINKING AND OBJECTIVITY

Interested? How to find out more…

We are Fifth P. Since 2011, we’ve worked with our clients in the FMCG & consumer product industries across Europe to create growth strategies that sustain long-term growth & leave lasting legacies

+44 (0) 20 3735 5762

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