Business Pulse explores the top 10 risks and opportunities faced by global organizations over the next few years. Ernst & Young’s Business Pulse report is based on a large sample survey of companies in 21 countries and across various industry sectors. The report takes the pulse of: • Current thinking on risks and opportunities and emerging challenges • Dual perspective on the themes arising from the top 10 lists • Expectations from industry executives and Ernst & Young specialists Read this presentation to conduct a self-assessment for your business and download the report at: http://goo.gl/CSKGQ

1. Business Pulse
Dual perspectives on the top 10 risks and
opportunities 2013 and beyond
Snapshot presentation

2. Are you confident
that your company
is well placed
to meet the risks
and challenges
currently on the
horizon?
Page 2 Business Pulse

3. How can you really
know that
opportunities aren’t
passing you by?
Page 3 Business Pulse

4. Start exploring now
The top 10 risks and
opportunities
What lies ahead?
Page 4 Business Pulse

5. What is Business Pulse about?
Business Pulse explores the top 10 risks
and opportunities faced by global Business Pulse key findings
organizations over the next few years. ► There has been a shift in thinking
among companies this year. Rather
Ernst & Young’s Business Pulse report than waiting for developed markets
is based on a large sample survey to recover, they now accept that the
of companies in 21 countries and across duration of the downturn is uncertain.
various industry sectors. ► Companies continue to focus on
controlling costs and optimizing
The report takes the pulse of: agility to survive in an intensely
competitive market.
► Current thinking on risks and
opportunities and emerging challenges ► What is different, compared with two
years ago, is that companies are
► Dual perspective on the themes arising once more looking for growth
from the top 10 lists opportunities, both geographically,
i.e., in rapid-growth economies, and
► Expectations from industry executives in innovation across products,
and Ernst & Young specialists services and operations.
Page 5 Business Pulse

6. What is the Ernst & Young risk and
opportunity radar?
At the center of the radar are the risks and opportunities that
our survey respondents felt were having the biggest impact on
major organizations worldwide. Arrows indicate the extent to Cost Stakeholder
which the ranking is expected to increase, decrease or remain
competitiveness confidence
the same between 2013 and 2015. The radar is divided into
four sections, corresponding to Ernst & Young’s
Growing Beyond model. The sections are:
► Sustaining companies’ economic
Cost competitiveness viability
► Allowing companies to build
Stakeholder confidence stronger relationships with
stakeholders
► Maximizing potential market
Customer reach opportunity for products and
services
Customer Operational
reach agility
► Improving organizations’ ability
Operational agility to deliver effectively in a quickly
changing market
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7. Are these your
top risks?
Page 7 Business Pulse

8. Global business risks
(2015 expected ranking in brackets)
Cost Stakeholder 1. Pricing pressure (1)
competitiveness confidence 2. Cost-cutting and profit pressure (2)
Political shocks 3. Markets risks (3)
4. Macroeconomic risk (4)
Expansion
of government’s role 5. Management talent and skill
Sovereign debt Market risks shortages (5)
6. Expansion of government’s role (7)
Macroeconomic risk Regulation and
compliance 7. Regulation and compliance (6)
Cost-cutting and profit Pricing pressure 8. Sovereign debt (10)
pressure
9. Emerging technologies (8)
10. Political shocks (9)
Managing talent and
skill shortages
Emerging
technologies
2013 ranking and expected 2015 ranking
Customer Operational Up in 2015 Same in 2015 Down in 2015
reach agility
Page 8 Business Pulse

9. Are these your top
opportunities?
Page 9 Business Pulse

10. Global business opportunities
(2015 expected ranking in brackets)
Cost Stakeholder 1. Innovation in products, services and
competitiveness confidence operations (1)
2. Emerging market demand growth (2)
Excellence in investor 3. Investing in process, tools and training
relations to achieve greater productivity (3)
Leveraging CSR and
4. New marketing channels (4)
public confidence 5. Improving execution of strategy across
business functions (5)
Investing 6. Investing in IT (6)
in cleantech
7. Excellence in investor relations (8)
Innovation in products, Investing in process, tools
services and operations
8. Leveraging corporate social responsibility
and training to achieve
greater productivity
(CSR) and public confidence (7)
Emerging market demand
growth 9. Investing in cleantech (9)
Investing in IT
New market channels Improving execution of strategy 10. Global optimization and relocation of key
across business functions functions (10)
Global optimization and
relocation of key functions
Customer Operational 2013 ranking and expected 2015 ranking
reach agility Up in 2015 Same in 2015 Down in 2015
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11. Plan your risk and opportunity agenda
Relevant business risks Specific areas of concern What would you like What would you like
and opportunities and risk to achieve? to achieve?
identified (short term) (mid term)
1
2
3
4
5
6
7
8
9
10
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12. Start preparing your business by asking
these questions
The following slides detail The risk and opportunity
a series of self-assessment self-assessment questions relate
questions relating to the to the four radar quadrants.
top 10 risks and opportunities. They give a snapshot of which
To access the full list of questions risks and opportunities are most
and insight into each risk and relevant to the following themes:
opportunity: ► Cost competitiveness
► Stakeholder confidence
 Download the report at
ey.com/businesspulse ► Customer reach
► Operational agility
Page 12 Business Pulse

13. Cost competitiveness
To see the full list of self-assessment questions, download the full report
Cost competitiveness covers: Self-assessment questions
Risks 1. How do you ensure you focus
on the right strategic relationships
Pricing pressure has become the biggest risk noted by companies
this year, up from fourth place in 2011. (e.g., encourage innovation
to design the right products from the
Cost cutting and the related pressure on profits is cited by best materials and secure critical
respondents as the second-biggest risk they face.
supply)?
Market risks have risen to third place as companies accept that the
2. How do you sustain margins
increasing reliance on emerging markets for growth brings new risks.
and operating results in the face
Macroeconomic risk is ranked fourth as the shocks of 2008–09 of increased global competition?
continue to reverberate.
3. What factors should you consider
Sovereign debt and the impact of austerity enters the top 10 list
when expanding globally?
for the first time.
Political shocks is also new to the top 10 list, with uncertainty and 4. Which supply markets and
economic volatility affecting not just emerging markets but also Europe. categories should you target?
Are you sourcing from the right
locations to be cost competitive?
Insights
5. How do you preserve value while
Ernst & Young estimates that cutting costs by just 1% can help improve minimizing costs?
bottom-line results by as much as a 10% boost in sales.
Firms are using technology to improve productivity, introducing more
flexible working practices and re-engineering supply chains to service
emerging markets growth.
Page 13 Business Pulse

14. Stakeholder confidence
To see the full list of self-assessment questions, download the full report
Stakeholder confidence covers: Self-assessment questions
Risks 1. How do you develop insights into
the possible impacts of shifts in
Regulation and compliance is listed as the seventh-biggest risk facing
companies and remain a concern to the next few years. government regulations on business
strategy and performance?
Expansion of government’s role is cited as the sixth-biggest risk.
This is driven in part by tightening regulation. 2. How do you evaluate the way in
which new regulations or laws can
create new markets for specialized
products or services?
3. What capability do you have
in scenario analysis and taking pre-
emptive action to offset any impact
Opportunities of changes in a government’s role?
Excellence in investor relations is ranked seventh, highlighting the 4. With whom do you collaborate
importance of a broad funding base in today’s relatively tight credit to track changing regulations and
world. seek compliance assistance?
Leveraging CSR and public confidence is ranked eighth overall and 5. How do you reduce your exposure
expected to rise to seventh in the coming years. This is especially true to share-price volatility?
in developing markets.
6. How do you identify cleantech
Investing in cleantech is placed as the ninth opportunity, emphasizing investment opportunities that
that institutional investors now demand greater transparency. are supported by proprietary
technologies and multiple
partnerships to minimize risk?
Page 14 Business Pulse

15. Customer reach
To see the full list of self-assessment questions, download the full report
Customer reach covers: Self-assessment questions
Risks 1. How do you effectively evaluate
rapid-growth markets to ensure
Emerging technologies are still narrowly considered a top 10 risk,
ranked ninth, down from fifth in 2011: they remain a worry for many that they fit with your competencies
firms due to the disruptive capabilities of ongoing technological and strategic objectives?
development. 2. How is innovation embedded
in your business model?
3. How can you work more effectively
with channel partners to ensure
the value proposition is easy for the
market to understand?
4. How are you tracking t he risk
Opportunities and adoption rates of emerging
Innovation in products, services and operations is ranked in first technologies? Which ones are likely
place. This is especially important for finding unexploited gaps in to have limited value or high
existing markets, but it is also becoming increasingly important within deployment risk?
major rapid-growth markets. 5. How do you assess changes
Emerging market demand growth is the second-biggest overall in factors such as adoption of IT,
opportunity. workforce demographics and
New marketing channels ranked fourth, a sharp increase from 2011, the rise of social media in order
as companies see increasing opportunities in this area. to identify which emerging
technologies are having the
most impact?
Page 15 Business Pulse

16. Operational agility
To see the full list of self-assessment questions, download the full report
Operational agility covers: Self-assessment questions
Risks 1. How do you minimize variability
in your supply chain while
Managing talent and skill shortages is a perennial challenge
for those seeking to expand and innovate. This risk fell to fifth overall introducing more cost effective
from third in 2011. processes and solutions?
2. How do you plan and prepare for
the increased volatility of the market
you operate in?
3. Have you effectively consolidated
and standardized global activities –
including using a shared service
Opportunities
center?
Investing in processes, tools and training to achieve greater
4. How do you ensure you have the
productivity is cited by executives as the second-biggest opportunity,
ahead of growth in new markets. right people with the right skills
in the right roles?
Investing in IT is a crucial element of strategy implementation and
overall performance, and is seen as the sixth-greatest opportunity. 5. How do you ensure you have the
right solutions and integrated
Improving execution of strategy across business functions is systems and processes in place
considered more important by respondents in mature markets than their
to increase collaboration?
peers in rapid-growth markets. This opportunity is ranked fifth overall.
Global optimization of key functions is a new opportunity on the top
10 list, as companies rethink operations from a global perspective to
help ease the pressure on skills shortages.
Page 16 Business Pulse

17. For more information
For more information
and contacts go to
www.ey.com/businesspulse
Page 17 Business Pulse

18. Please share your feedback
businesspulse@ey.com

19. Ernst & Young
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About Ernst & Young
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about our organization, please visit www.ey.com.
About Ernst & Young's Advisory Services
The relationship between risk and performance improvement is an
increasingly complex and central business challenge, with business
performance directly connected to the recognition and effective
management of risk. Whether your focus is on business
transformation or sustaining achievement, having the right advisors
on your side can make all the difference. Our 25,000 advisory
professionals form one of the broadest global advisory networks of
any professional organization, delivering seasoned multidisciplinary
teams that work with our clients to deliver a powerful and superior
client experience. We use proven, integrated methodologies to help
you achieve your strategic priorities and make improvements that
are sustainable for the longer term. We understand that to achieve
your potential as an organization you require services that respond
to your specific issues, so we bring our broad sector experience and
deep subject matter knowledge to bear in a proactive and objective
way. Above all, we are committed to measuring the gains and
identifying where the strategy is delivering the value your business
needs. It’s how Ernst & Young makes a difference.
© 2013 Ernst & Young
All Rights Reserved
EYG no. AU1454
This publication contains information in summary form and is therefore intended
for general guidance only. It is not intended to be a substitute for detailed
research or the exercise of professional judgment. Neither EYGM Limited nor
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responsibility for loss occasioned to any person acting or refraining from action
as a result of any material in this publication. On any specific matter, reference
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