Towards new domains of growth – how to succeed in a changing business environment
Juuso Laatikainen
Value chains are undergoing drastic changes and traditional industry boundaries will blur in the coming years. Companies are now facing significant pressure to develop and renew their current business models. Where should corporate management focus on when markets are shifting, industries are merging, and change is the new constant?
Artificial intelligence and climate change are accelerating the development of the business environment and forcing companies to renew their ways of operating. To succeed, businesses must act swiftly and dare to make strategic decisions – even bold ones. At the heart of everything are domains of growth—market opportunities where companies cross industry boundaries to respond to changing needs.
PwC’s extensive global Value in Motion study identifies nine distinct domains of growth, each focusing on different needs: manufacturing materials and products (“make”), construction (“build”), agriculture and food (“feed”), healthcare (“care”), transportation and mobility (“move”), energy (“fuel and power”), governance (“govern and serve”), capital (“fund and insure”), and technology (“connect and compute”).
One of the main messages of the study is that growth is not just dependent on one’s own industry or organisation; companies must recognise new playing fields beyond their traditional operational areas. While value chains transform, demand for products and services can emerge from entirely different industries. In Finland, some of the concrete examples of this phenomenon include newly booming defense industry, forest industry harnessing sustainable energy solutions to accelerate growth, and technology companies that have transformed their original business models through digitalisation and automation.
Climate change and the climate crisis can also open new business opportunities for Finnish companies if they can develop solutions to prevent the realisation of climate risks. According to the Value in Motion study, the potential for value creation in this area remains significant, even though growth has slowed in the medium and long term.
How Can Organisations Prepare for Change?
Companies need to consider how and where growth will occur and seek collaboration opportunities across industry boundaries. Only those companies that keep pace with change will access growth and achieve their full growth potential. This also means that a company loses value if it does not recognise the need for change in time.
From leaders, the industry transformation requires courage, agility, innovation, and the ability to think outside the box. In the future, value can and should be created beyond the current industry boundaries. Even if change is forced upon a company, it can still provide a springboard for new kinds of innovations and successful business model renewals.
At the same time, we must accept the realities: not all companies are ready to operate in the domain of growth, and many Finnish companies operate solely within the internal market. According to the Value in Motion study, the leading edge of development consists of 20% of companies that achieve over 80% of profitable growth. Companies outside this group must strive to close the gap to remain competitive. For growth companies in particular, competing through technology could be a more viable option: generative AI can accelerate product development, simulation, and piloting, helping to gain a significant advantage over competitors.
Signposts for the Change Journey
In the coming years, the success of companies will depend on their readiness to seize the challenges and opportunities brought by change. However, development is not linear and occurs in phases. During this transformation, the ability to renew oneself and boldly embrace new opportunities is crucial. Companies need strategic agility, technology adoption, and collaboration across traditional business boundaries.
- Leveraging Technology: Use technology such as artificial intelligence to ensure more efficient information management, process automation, and faster response to market changes.
- Utilising Data and Analytics: Use data to support decision-making and identify new business opportunities.
- Renewing Value Chains: Seek to identify how your organisation’s value chains can evolve and expand. New growth may come from unexpected directions, such as the defense industry or the green transition.
- Networking: Build partnerships across industry boundaries. Collaboration can help reach new markets and clients as well as reduce business risks.
- Developing Culture and Leadership: Foster courage, a culture of experimentation, and continuous learning. Leadership plays a key role as an enabler of change.
