Digitalization is beginning to allow chemical companies to offer a wider range of new solutions

PwC’s 2016 Global CEO survey came to an interesting but inconsistent conclusion. In the survey, 72% of the CEOs of chemical companies said there were more growth opportunities now than three years ago. Their optimism is well founded. Changes in technology, regulations and consumer preferences in developed and emerging markets are opening up new prospects for sales and profits. In the chemical industry, digitalization begins to allow enterprises to provide a wider range of new solutions, which may eventually change the industry ecosystem and the relationship between chemical companies and customers. Digitalization is also helpful for chemical companies to reach a new level of efficiency and benefit.

But that optimism should be eased: our ongoing survey of executives around the world shows that 68% of them say they have too many unrelated strategic plans; 65% say they are too focused on short-term benefits; 55% think their strategy will not succeed; 57% say they don’t even consider how they can implement new strategies with their existing capabilities.

This depressing picture is particularly disturbing in an industry where the speed of commercialization of products is accelerating and the pressure on profit margins is increasing; competition from emerging markets is growing rapidly; digitalization is attracting innovation and R & D spending, and cost efficiency is a priority; and; In addition, as the raw material structure changes to light feed and new natural raw materials, enterprises are being forced to manage more complex regional supply chains. Considering these difficult conditions, chemical companies can’t pursue growth in a random and fragmented way. They must ask two fundamental questions: “how can we create value in a way that others can’t?” and “what few abilities can make us do better than others?” adding these questions together, a bigger question comes out What kind of people do we want to be in the future

These questions put a company’s unique capabilities at the center of everything it does. At best, these capabilities are customized combinations of processes, tools and systems, technologies, knowledge, skills and organizational structures that competitors cannot easily replicate; therefore, these capabilities should provide a sustainable advantage for the companies that own them.

In addition, these capabilities force consistency, which in this context means consistency between strong value propositions and unique capability systems. All of our studies confirm that companies with the same strategy will produce stronger financial performance. According to a survey of more than 4400 senior executives conducted by strategy & global, respondents from well-organized companies are three times more likely to think their companies are growing faster than the market. They think their company’s profitability is 2.5 times higher than the industry average.