A_vision_for_growth_EN_Final
- 1. A vision for growth Business outlook survey Romania 2013
- 2. A Vision for Growth 2013Page 2 What is “A vision for growth”? “A vision for growth” explores perceptions of top executives from major companies operating in Romania regarding the business outlook for 2013. This Ernst & Young report is based on a survey of 105 C-suite level executives from companies in various sectors, who provided a perspective on how the domestic business environment is perceived at the beginning of 2013. 5 main findings 1 25% of respondents foresee a significant growth (+10-30%) of their company’s turnover in 2013, while 51% expect a growth rate of +5-10%. 37% of the respondents expect the profit growth rate of their company to range between 5 to 10%, and 31% between 10 to 30%, although early forecasts present 2013 as difficult year. Only 2% of respondents say the salary increase in their company is expected to exceed 10%, while 55% expect it to range between 5 to 10%. However, 42% say the salary increase will be 0%. 75% of respondents say their company’s strategy to increase sales consists of introducing new products/services for existing clients, while only 33% say they will enter new geographic markets for existing products/services. Most companies are willing to innovate, but they want to do so utilizing internal resources (63%). There is a tight call among new business opportunity, customer satisfaction, and operational efficiency, when it comes to areas of innovation utilization. 2 3 4 5
- 3. A Vision for Growth 2013Page 3 A vision for growth Business outlook survey Romania 2013 Although 2013 appears to be a challenging year in many respects, many companies say they expect to grow. Bogdan Ion, Country Managing Partner
- 4. A Vision for Growth 2013Page 4 Please indicate the main three elements that you use to define success. (multiple answers) Question 1 Usually, companies measure their success by a combination of financial results, market share and brand awareness, but customer satisfaction appears to be very high in their criteria list. Total Respondents: 99 (Skipped this question: 6) 38% 64% 77% 93% Brand awareness Market share Customer satisfaction Financial results 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
- 5. A Vision for Growth 2013Page 5 How much do you expect your turnover to grow in 2013? (one answer) Question 2 25% of respondents foresee a significant growth (+10-30%) of their company’s turnover in 2013, while 51% expect a growth rate of +5-10%. Total Respondents: 98 (Skipped this question: 7) 0% 3% 4% 17% 51% 13% 12% -20 to -30% -10 to -20% -5 to -10% 0% +5 to 10% +10 to 20% +20 to 30% 0% 10% 20% 30% 40% 50% 60%
- 6. A Vision for Growth 2013Page 6 How much do you expect your profit to grow in 2013? (one answer) Question 3 37% of the respondents expect the profit growth rate of their company to range between 5 to 10%, and 31% between 10 to 30%, although early forecasts present 2013 as difficult year. Total Respondents: 97 (Skipped this question: 8) 3% 0% 6% 23% 37% 22% 9% -20 to -30% -10 to -20% -5 to -10% 0% +5 to 10% +10 to 20% +20 to 30% 0% 5% 10% 15% 20% 25% 30% 35% 40%
- 7. A Vision for Growth 2013Page 7 As the chart shows, 56% of respondents expect no increase in the employees number in 2013, but 21% foresee a slight increase of 5-10%, mainly due to expected increased activity. How much do you expect your number of employees to grow in 2013?(one answer) Question 4 Total Respondents: 98 (Skipped this question: 7) 0% 4% 14% 56% 21% 2% 3% -20 to -30% -10 to -20% -5 to -10% 0% +5 to 10% +10 to 20% +20 to 30% 0% 10% 20% 30% 40% 50% 60%
- 8. A Vision for Growth 2013Page 8 Only 2% of respondents say the salary increase in their company is expected to exceed 10%, while 55% expect it to range between 5 to 10%. However, 42% say the salary increase will be 0%. How much do you expect the salary level in your company to grow in 2013? (one answer) Question 5 Total Respondents: 99 (Skipped this question: 6) 0% 1% 0% 42% 55% 2% 0% -20 to -30% -10 to -20% -5 to -10% 0% +5 to 10% +10 to 20% +20 to 30% 0% 10% 20% 30% 40% 50% 60%
- 9. A Vision for Growth 2013Page 9 Confidence in industry growth is rather low, even though most respondents expect their own revenues to grow (see page 5 and 10). How confident do you feel regarding the growth of your industry for the next 12 months?(one answer) Question 6 Total Respondents: 99 (Skipped this question: 6) 16% 44% 35% 4% Not at all confident Slightly confident Somewhat confident Very confident 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
- 10. A Vision for Growth 2013Page 10 The difference between confidence in industry growth and company growth forecast is quite remarkable, which could show that companies place an important trust in their strategy. How confident do you feel regarding the growth of your company for the next 12 months?(one answer) Question 7 Total Respondents: 99 (Skipped this question: 6) 3% 31% 40% 25% Not at all confident Slightly confident Somewhat confident Very confident 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
- 11. A Vision for Growth 2013Page 11 Low cost does not seem to be the main strength of the respondents’ competition in the local market, competitors’ brand becoming more important in 2013. Please describe the main strength of your competitors in the local market, Romania. (one answer) Question 8 Total Respondents: 96 (Skipped this question: 9) 39% 31% 14% 14% 2%0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Strong brand awareness (trust) Low cost Partnerships Distribution channels R&D
- 12. A Vision for Growth 2013Page 12 Where would you position your sales strategy between the two following dimensions: relational and transactional? (one answer) Question 9 Relational companies build long-lasting relations with their customers, while transactional ones focus only on transactions. 68% of the respondents to our survey say their company has a 100% relational sales strategy, aspect which should be considered when reading the next 2 slides. 68% 24% 6% 2% 100% Relational 50% Relational 50% Transactional 100% Transactional Total Respondents: 98 (Skipped this question: 7)
- 13. A Vision for Growth 2013Page 13 To what extent do you expect your customers' demands to change in the next 12 months? (one answer) Question 10 While 2% of respondents expect their customers’ demand to change dramatically, 66% foresee only a slight change. Total Respondents: 99 (Skipped this question: 6) 66% 32% 2% Somewhat change Stay the same Change dramatically
- 14. A Vision for Growth 2013Page 14 What impact will the change in customers' demand have on your company in the next 12 months? (one answer for each option) Question 11 Even though the previous chart showed that companies do not expect substantial changes in customers’ demand, the highest impact (if any) could occur on innovation strategy, brand positioning, marketing and operations. Total number of responses: 576 18% 21% 33% 49% 36% 24% 64% 60% 47% 46% 54% 53% 19% 19% 20% 5% 10% 24% 0% 20% 40% 60% 80% 100% 120% Operations Marketing Brand positioning CSR (Corporate Social Responsibility) Organizational structure Innovation strategy No impact Moderate impact High impact
- 15. A Vision for Growth 2013Page 15 Most companies are willing to innovate, but they expect to do so utilizing internal resources (63%). How do you plan to use innovation in your company in the next 12 months? (one answer) Question 12 Total Respondents: 99 (Skipped this question: 6) 63% 20% 7% 7% 3% We will rely on in-house innovation for our activity We will rely on others' innovation for our activity We will not use innovation We will partner with research and educational organizations Other 0% 10% 20% 30% 40% 50% 60% 70%
- 16. A Vision for Growth 2013Page 16 How does your company plan to use innovation to support the overall growth strategy? (one answer) Question 13 There is a tight call among new business opportunity, customer satisfaction, and operational efficiency, when it comes to areas of innovation utilization. Total Respondents: 98 (Skipped this question: 7) 33% 24% 20% 15% 5% 3% 0% 5% 10% 15% 20% 25% 30% 35% Innovation will be focused on new business opportunity Innovation will focus on satisfying customers' changing demands Innovation will be focused on operational efficiency Innovation is our main competitive advantage Innovation will not affect our overall growth Other
- 17. A Vision for Growth 2013Page 17 The high dependency on labor force’s skills indicates that companies are fully aware of the direct link between employees’ competency level and company’s performance. How would you rate the dependency of your company's success on the skills of the labor force? (one answer) Question 14 Total Respondents: 97 (Skipped this question: 8) 1% 23% 60% 16% Low dependency Medium dependency High dependency Extremely high dependency
- 18. A Vision for Growth 2013Page 18 83% 12% 5% Dependent on education level and key skills Dependent on employee retention Highly influenced by salary costs Which of the following factors best describe the impact of your labor force on company's success? (one answer) Question 15 No less than 83% of the respondents say that education and skill of labor force play the most important role in their company’s success. Total Respondents: 99 (Skipped this question: 6)
- 19. A Vision for Growth 2013Page 19 What do you consider to be the most important attributes for the leadership of your organization? (multiple answers) Question 16 Industry expertise, good risk/caution balance and embodiment of the organization’s values and culture (tone at the top) appear to be the most important attributes of the successful leader. Total Respondents: 99 (Skipped this question: 6) 59% 54% 53% 44% 41% 38% 33% 31% 0% 10% 20% 30% 40% 50% 60% 70% Industry expertise Strikes the right balance between risk taking and caution Articulates and embodies the value and culture of the organization Engages effectively with multiple stakeholders Decisiveness Can lead in a regional business environment Can command the respect of colleagues and reports Has a strong graps of financials
- 20. A Vision for Growth 2013Page 20 Over 95% of companies agreed that legal, tax and regulatory environment plays a moderate to high role in their growth. To what extent does the legal, tax and regulatory environment play a role in the growth of your company? (one answer for each option) Question 17 (Total number of responses: 289) 4% 5% 4% 46% 49% 49% 49% 45% 46% 0% 20% 40% 60% 80% 100% 120% Tax Legal Regulatory No role Moderate role Very important role
- 21. A Vision for Growth 2013Page 21 Which of the following best describes your company primary strategy for financing its investments in the past year? (one answer) Question 18 When it comes to financing investments, in 2012 companies used mostly bank loans (47%), followed by share capital increase (12%). Total Respondents: 97 (Skipped this question: 8) 47% 18% 4% 31% Our company used bank loans to finance its investments Our company attracted share capital increase to finance its investments Our company used venture capital to finance its investments Other (intercompany loans, own resources, reinvested profit) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
- 22. A Vision for Growth 2013Page 22 Which of the following best describes your company's preferred strategy for financing its investments in the following 12 months? (one answer) Question 19 In 2013 as well, the main companies’ strategy for financing investments appears to be through bank loans (46%). Total Respondents: 93 (Skipped this question: 12) 45% 20% 8% 27% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Bank loans Share capital increase Venture capital Other (intercompany loans, own resources, reinvested profit)
- 23. A Vision for Growth 2013Page 23 Which of the following best describe the reaction of your company to the business environment in the past year? (one answer) Question 20 In 2012, businesses reacted to the pressures coming from the business environment by reducing costs (30%) or increasing productivity (28%), substantially more than by talent acquisition (4%) or M&As (1%). Total Respondents: 97 (Skipped this question: 8) 30% 28% 16% 13% 5% 4% 2% 1% Cost reduction Productivity increase New products Restructure of the organization Other Talent acquisition Reduce capital investment Merger and acquisitions 0% 5% 10% 15% 20% 25% 30% 35%
- 24. A Vision for Growth 2013Page 24 Which of the following actions will your company take to increase sales? (one answer) Question 21 75% of respondents say their company’s strategy to increase sales consists of introducing new products/services for existing clients, while only 33% say they will enter new geographic markets for existing products/services. Total Respondents: 99 (Skipped this question: 6) 75% 33% 31% 26% 20% 18% 8% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% Introducing new products and/or services for existing client and to attract new clients Enter new geographic markets for existing products/services Opening new distribution channels/reorganizing distribution to use multiple channels Increase investment in marketing and sales Adapting existing product/service for new geographic markets Cutting prices Increase prices Merging with and/or acquiring competitors to increase market share
- 25. A Vision for Growth 2013Page 25 In case of stagnation/decline in your current markets what will be the step/s your company will pursue in the next 12 months? (all that apply) Question 22 Most companies (76%) say that they will continue to stay on the market if it declines. A high percentage of companies (46%) though, are willing to transform the market through innovative approaches in case such a decline occurs. Total Respondents: 98 (Skipped this question: 7) 76% 46% 15% 7% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% Stay on the market until is stable again in order to secure it and increase the trust level Transform the market trought innovative approaches Grow on the market through Mergers and Acquisitions Seek external funding to secure our position on the market Leave the market and seek new ones
- 26. A Vision for Growth 2013Page 26 Demographics The results of this survey reflect the responses received to our questionnaire in the period between 21 Jan. and 5 Feb. 2013, from 105 top executives of major companies operating in Romania.
- 27. A Vision for Growth 2013Page 27 Demographics Romanian company (yes/no) Business type No, 57% Yes, 43% 67% 29% 4% Bussiness to Bussiness Bussiness to Consumers Bussiness to Government 0% 20% 40% 60% 80%
- 28. A Vision for Growth 2013Page 28 Demographics Industry sector Company revenue level 24% 12% 10% 9% 8% 7% 7% 4% 4% 2% 13% Industry/Manufacturing Pharmaceuticals/Healthcare Power/Energy/Mining Services Retail & Wholesale trade Construction/Real estate Food & Beverages/Agriculture Telecom/Media Tourism Chemicals Other 0% 5% 10% 15% 20% 25% 30% 7% 14% 38% 12% 29% Less than 1 M EUR 1-10 M EUR 10-50 M EUR 50-100 M EUR 100 M EUR + 0% 10% 20% 30% 40%
- 29. A Vision for Growth 2013Page 29 Demographics Entity type Job title of respondent 67% 22% 10% 1% Privately owned Publicly listed Private Equity Portofolio Company Government/State-owned enterprise 0% 20% 40% 60% 80% 34% 32% 8% 7% 5% 4% 4% 3% 3% CFO/Treasurer/Controller CEO/President/Managing director Manager Board member SVP/VP/Director Head of business unit Head of department Other C-level executive Other 0% 10% 20% 30% 40%
- 30. A Vision for Growth 2013Page 30 Thank you!