Article

Of note: How consumer products companies prepare for change

Consumer goods companies are rethinking the operating models that will prepare them for a future that looks little like the past.

By Vijay Vishwanath

Published on September 18, 2012
min read


Vijay Vishwanath Leader, Global Consumer Products practice The trend is as widespread as it is important: In record numbers, consumer products companies are revisiting their operating models for where and how the most critical work gets done. Partly, this trend is a matter of players positioning themselves to compete in developing markets—and preparing for the “next billion” consumers that will come on board by 2020. And partly, it is because companies are realizing they’ve grown too complex to meet the changing demands of consumers in the developed markets, which have been their growth engines for decades. As a result, they are focusing on their ability to quickly and easily repeat winning routines. Whatever the reason, every week seems to bring another big announcement of a consumer goods company rearranging its geographic reporting lines, combining divisions, or splitting up or moving a category executive team from the company’s headquarters in the West to a promising market in the East. And behind the scenes, consumer goods companies are rethinking their management forums, redefining accountabilities and clarifying the metrics and talent models that will prepare them for a future that looks little like the past. The names in the headlines—Kraft Foods, Procter & Gamble, Unilever, Reckitt Benckiser and many others—say it all. Our article "Winning operating models" examines why consumer goods companies are revisiting their operating models and shows the ins and outs of how winning companies are making the operating model decisions that will advance them ahead of the competition. We offer a quick self-evaluation to help you understand where your company’s model stands. We also examine the universal truths that serve as a starting point for the best consumer products operating models and provide tips for companies embarking on a redesign. Furthermore, we report on one of the major forces creating urgency for companies to act: the emergence of 1.2 billion new consumers in places like Algeria, Argentina and Azerbaijan—consumers who will be moving from subsistence-level poverty to having discretionary income by 2020. This group will be a major force behind overall global growth in the years ahead and a boon for consumer products companies that can capture this new market. Another article, "Getting ready to profit from the 'next billion' consumers," outlines Bain’s recent research on these new consumers who will play a major role in the success or failure of consumer goods companies throughout the world.

Vijay Vishwanath

Leader, Global Consumer Products practice

The trend is as widespread as it is important: In record numbers, consumer products companies are revisiting their operating models for where and how the most critical work gets done. Partly, this trend is a matter of players positioning themselves to compete in developing markets—and preparing for the “next billion” consumers that will come on board by 2020. And partly, it is because companies are realizing they’ve grown too complex to meet the changing demands of consumers in the developed markets, which have been their growth engines for decades. As a result, they are focusing on their ability to quickly and easily repeat winning routines.

Whatever the reason, every week seems to bring another big announcement of a consumer goods company rearranging its geographic reporting lines, combining divisions, or splitting up or moving a category executive team from the company’s headquarters in the West to a promising market in the East. And behind the scenes, consumer goods companies are rethinking their management forums, redefining accountabilities and clarifying the metrics and talent models that will prepare them for a future that looks little like the past. The names in the headlines—Kraft Foods, Procter & Gamble, Unilever, Reckitt Benckiser and many others—say it all.

Our article "Winning operating models" examines why consumer goods companies are revisiting their operating models and shows the ins and outs of how winning companies are making the operating model decisions that will advance them ahead of the competition. We offer a quick self-evaluation to help you understand where your company’s model stands. We also examine the universal truths that serve as a starting point for the best consumer products operating models and provide tips for companies embarking on a redesign. Furthermore, we report on one of the major forces creating urgency for companies to act: the emergence of 1.2 billion new consumers in places like Algeria, Argentina and Azerbaijan—consumers who will be moving from subsistence-level poverty to having discretionary income by 2020. This group will be a major force behind overall global growth in the years ahead and a boon for consumer products companies that can capture this new market.

Another article, "Getting ready to profit from the 'next billion' consumers," outlines Bain’s recent research on these new consumers who will play a major role in the success or failure of consumer goods companies throughout the world.