Charting the Future of the Industry
In the end, the problem with many strategic assumptions is not that they’re wrong, it’s that they are not universal. Be wary of the idea that other companies find beguiling; the right strategic destination is different for every company, even — or especially — in a mature industry like consumer packaged goods.
Be careful, also, of the ideas that have made you successful over time. Many of the success stories in this article concern categories — including beauty products, coffee, batteries, and vodka — that have gone from consolidation to fragmentation, or vice versa. Some have shifted between these dynamics several times. There is always the chance in the CPG field that an upstart company will find a new product or process that changes the nature of the category altogether. With massive amounts of new R&D under way in China, India, and other emerging markets, this is all the more likely.
The advantage given to you by your business environment is thus transient, and you will have to react ever more quickly in the years ahead. Even so, your greatest strength is steady and long-lasting: the capabilities that you hone over the years, matched to your customers’ needs.
- Steffen M. Lauster is a partner with Booz & Company based in Cleveland. He focuses on strategy development and global growth initiatives for consumer products companies in the U.S. and Europe.
- Elisabeth Hartley is a principal with Booz & Company based in New York. She specializes in helping consumer-focused companies achieve strategy- and capability-based transformation across the consumer goods, media, and nonprofit sectors.
- Samrat Sharma is a principal with Booz & Company based in Cleveland. He specializes in value-based management, organic growth, capabilities-driven strategy development, and transformations for global consumer and industrial companies.