What's increasingly clear is a greater number of Australian corporations have emerged from under the shadow of the GFC. Business and consumer confidence are growing as we witness a patchwork of colour and movement – there's strength and vibrancy in some corners and grey patches in others.
At the macro-economic level, a low interest rate environment, relatively low unemployment and strong population growth are nurturing a growth environment. Internally the dynamics are even more compelling. A key factor is fundamental demographic shifts – in particular the ageing population – that's driving changes in the broader economy that are then spilling into the corporate and government sphere.
"The key driver for any focused growth agenda is commitment to true customer-centricity and a client experience based on depth and real customer insight. This starts with a complete understanding of what the customer wants and needs."
National Managing Partner, Advisory
Growth is firmly on the agenda for many Australian businesses. While economic conditions have created a favourable environment for growth, we often see organisations struggling with focus and execution to meet increasing customer expectations in a rapidly changing and increasingly competitive market.
Grow beyond expectations
In this drive to fast track growth we predict a growing level of corporate activity in both the Merger & Acquisitions (M&A) and IPO markets as business confidence grows and risk appetite returns.
For those organisations looking to grow through M&A, the value of the transaction is delivered in the future not the past. It's important to consider that a large proportion of these deals fail to deliver the value predicted. To get the most out of an M&A, you need the following: a clear strategic rationale, a clear understanding of the risk and rewards and the acquirers ability to take control, capture value and manage risk. Full company engagement and relentlessly measuring outcomes are also necessary.
Similarly we are starting to see investment to facilitate organic growth.
The key driver for any focused growth agenda is commitment to true customer-centricity and a client experience based on depth and real customer insight. This starts with a complete understanding of what the customer wants and needs. Data and predictive analytics are gaining in momentum and sophistication, and this will aid conversion to competitive advantage, increased share of wallet and greater efficiency and productivity. However, it must be underpinned by the right culture to support growth with aligned focus and integration across all customer delivery channels and touch points. This includes aligning lT and the supply chain to the growth agenda, while retaining a focus on the right frameworks for cost and risk management.
It's also important to keep abreast of macro-trends as key indicators of significant market shifts and resulting opportunities and risks. Transformation of Australia's demographic profile and a surge in our ageing population is creating a huge groundswell of demand for services. Fiscal pressure is mounting on the government purse; this in turn creates opportunities for greater private sector involvement in public service delivery. Furthermore, the upcoming transformation of the Australian payment system will deliver opportunities in areas not yet imagined, delivered by non-traditional players using emerging technologies.
In the quest for growth, organisations are taking a wider and lateral view of market expansion looking at where their core capabilities could be applied in a new industry context, for example, telcos expanding into healthcare. To further enhance innovation, we are seeing greater experimentation with business models. This includes large corporates proactively engaging with the start-up community to expand their ecosystem of ideas and models of corporate venturing and accelerator programs to enhance organisational agility. There's also the emerging use of crowd sourcing to provide real time market testing of new product and service concepts.
While the fundamentals of sustainable growth remain, the approaches being taken are changing. We are seeing our corporate clients respond to these growth opportunities by focusing on organic, inorganic and transformational growth strategies. KPMG is confident it can help our clients identify and convert these opportunities into reality – delivering sustainable growth.