Firms anticipate fundamental changes

Swiss retailers and the consumer goods industry indicate scepticism about the future

Swiss companies foresee radical transformations in 2013, with the greatest problems being increasing competition, price pressure and changing customer attitudes, according to a survey by consultants Ernst & Young.

This content was published on December 12, 2012 minutes and agencies

The survey, published on Wednesday, found that around ten per cent of the 112 firms questioned expected a “negative or very negative business development” within the next 12 months.

The changing business environment was also expected to have an effect on profits, with 77 per cent of respondents believing returns will go down.

To counter this, the companies wanted above all an increased standardisation of internal processes and improved infrastructure including IT systems and databases.

While greater efficiency was sought after, only 18 per cent of respondents believed staff shortages would be a problem in future.

According to the report, almost 80 per cent of firms had already introduced changes to their business model, with almost half expecting a fall in profits during the transition period.

Online effect

Scepticism for the future was greatest among banks, energy companies, the retail sector and the consumer goods industry.

Banks said they were being weighed down by tightened regulation and dwindling margins, while energy companies were having to adjust to Switzerland’s announced withdrawal from nuclear power and price pressure from energy trading.

The retail sector and the consumer goods industry were feeling the effects of the internet and social media, which were drastically changing the speed and transparency of information.

In addition, the internet meant geographical dependency between buyer and seller no longer existed: for example tennis rackets were being bought increasingly from the manufacturer rather than at the village shop.

Further reasons in Ernst & Young’s view for revising business models included an aging society, climate change and the shift in power towards Asia.

For many companies, the report said, their very survival was at stake – they weren’t facing a temporary change, as with the internet bubble, but an “enduring upheaval”.

That said, two thirds of respondents saw the upcoming changes more as a chance than a risk.  

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