December 30, 2016

'Despite an Improved Global Economic Backdrop, Mounting Uncertainties Will Weigh on Companies in 2017'

Image: EIU
"In 2017, companies can look forward to an improved global economic backdrop but must prepare for uncertainty following Donald Trump's victory in the US presidential elections and the UK's decision to leave the EU," explains the Economist Intelligence Unit in announcing the publication of its whitepaper, Industries in 2017. "This exclusive whitepaper provides a global overview for the year ahead for six industries - Automotive, Consumer goods, Energy, Financial services, Healthcare, and Telecommunications. It brings together analysis and forecasts for each industry, identifying the key strategic business issues that we expect to arise."

Regarding the general overlook for the global economy in 2017, "Threats to global economic growth are mounting. Populist, anti-globalization sentiment has triggered Donald Trump's election in the US and Britain's planned exit from the EU. Yet, despite the raised risks, the world economy is in fact set for a slightly better year in 2017."

Many emerging markets will benefit from "a firmer outlook for commodities." The EIU predicts "that average prices of Brent crude oil will climb by a quarter on 2016, to US$56.5/barrel; non-oil commodity prices will tick up for the first time in years. Beneficiaries will include Russia and Brazil, both recovering from recessions. This will speed economic expansion in the non-OECD world to 4.3% at market exchange rates. The OECD will see a smaller acceleration to 1.8%, while global growth will rise to 2.5%."

As for the U.S. economy, the EIU's forecast "is a sunny one, with GDP rising by 2.3%. Although we expect faster monetary tightening by the Federal Reserve, the central bank, this may be offset by Mr Trump’s promised tax-cuts and infrastructure spending. However, if Mr Trump pushes ahead with protectionist trade policies, he could undermine US and world growth."

While the Federal Reserve will tighten monetary policy, other countries in the advanced world will see their monetary policy "remain overwhelmingly loose." The EIU notes that "governments will also turn to fiscal policy to stimulate demand. In Japan, for example, the prime minister, Shinzo Abe, is throwing yet more stimulus at the economy and the fiscal deficit is set to widen. Meanwhile, debt-laden China will avoid a sharp slowdown in 2017 (not so in 2018), as Asia grows by a healthy 3.9%."

It its overview of the global economy in 2017, the whitepaper correctly explains: "Europe will once again let the side down, thanks partly to Brexit. The consequences of the UK's decision to leave the EU will be long-lasting, profound and clouded in uncertainty. As consumer and business sentiment in the world's fifth-biggest economy sag, recession will ensue in 2017. Europe will manage only 1.4% growth. With important elections in France and Germany to come in 2017, the fear is that the forces ranging against globalization will gain further ground."

Listed below is the central thesis for each of the six industries addressed in whitepaper:
  • Automotive. With the auto industry facing widespread challenges, the focus on research and development has intensified. But will traditional vehicle-makers lose out as mobility becomes more high-tech?
  • Consumer goods/retail. Political events may dampen consumer confidence in 2017 but new technologies will continue to drive global retail sales upwards;
  • Energy. Climate policies will keep chipping away at fossil fuels' role as the mainstay of global energy use, despite Donald Trump's appointment as US president in 2017;
  • Financial services. Finance will enjoy boosts in 2017 from fintech, mobile money, an emerging market rebound and expanding customer ranks. However, the three villains of the post-crisis era—weak growth, low rates and tough regulations—will keep a damper on the sector;
  • Healthcare. Plenty of countries will be trying to expand access to healthcare, but the US may step back from Obamacare; and
  • Telecoms. Telecoms companies will seek new sources of revenue as traditional streams dwindle and pressure from growing mobile broadband usage mounts.
Do you agree with the EIU's forecasts for 2017? What key issues and trends are valuable to your business?

While contemplating the questions above, you may find entertainment in watching a video produced by The Economist's cartoonist KAL, which presents the most interesting events taking place in 2017.

Wishing you a happy, healthy, and prosperous 2017. Thank you for reading.

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

December 27, 2016

How and When to Invest in Product Marketing

The following is a guest post by Yan Tang

Photo:
http://ow.ly/SJJz307uE2D
When fitness startup ClassPass is doing everything to devise new product offering that would satisfy and affect users, its marketing team gets a better understanding of what users wanted and figures out the one process: getting in the mind of your customers. What the biggest public marketing comes from making better products, having a more focused team and making users happier. In an exclusive interview, Joanna Lord, Chief Marketing Officer at ClassPass, clarifies "what product marketing really is and why founders should consider investing in it sooner rather than later." She also shares her professional advice on establishing a top-notch product marketing team. And Ms. Lord correctly emphasizes the importance of putting the customers first in all things.

What is Product Marketing Is – and Isn't

"Product marketing, at its heart, is about understanding what you're building, why you invested in it, and how it will benefit the user—and then messaging that understanding to your customer," according to Ms. Lord. There are four key tasks that can help a company determine the product marketing:
  1. What to build (which typically overlaps with product);
  2. Who to build for (which typically overlaps with UX, or business development/sales);
  3. How to price it (which typically overlap with pricing, marketing, product, or sales);
  4. And how to sell it (which overlaps with marketing and sales).
Primarily, product marketing is "an exercise in communicating with your customers, and helping them understand the full value of everything you build for them." It is more about assisting existing customers to understand the products and features and engage with them.

Photo:
http://ow.ly/O7lx307uE85
When to Kick-start Product Marketing

If you are wondering when and how to integrate product marketing, consider these two key questions: How big is your company? And how complex is your product portfolio?

It is easier for smaller companies to navigate resources in marketing and sales." If you have one product, and it's super early for the company, you could even have someone on your product team, or your marketing team, playing this role 50% of the time," Ms. Lord explains. Even CEOs from really small early-stage start-ups can play a role of product marketers.

If your products are complicated, however, you might want to invest in product marketing early, no matter what the size of the company.

How to Hire for the Right Skill Set

It is very important to build an effective team of people who can create great products and message them into the public. When it is time to invest it companies should have a marketing team with a particular combination of hard and soft skills, such as ideation, agile development, launching releases, go-to-market and demand generation.

Except subject-matter expertise, some key traits should be considered when a company looks for a stellar product marketer.
  • Drawn to details
  • Researches by default
  • Fetches feedback
  • Identifies as cross functional
There is always a lot to look for, and companies can design some interview questions or create a process for digging deeper into a candidate's qualifications.

The Fine Art of Launching Product Marketing

Once you have recruit a right person for the job, proceed thoughtfully to integrate the new individual with the rest of your team- there is actually more of an art to it than you might think.

The addition of even one new member requires that the entire team regroup and rebond, finding new ways of working and ultimately recreating their dynamics and working style. Also, new product markers themselves need to take the responsibility of proving their worth and establishing a team that the rest of team members respects and values. Ms. Lords says: "that boils down to open, humble communication. The product marketer has to be an expert at asking questions and understanding both the customer and their internal stakeholder." Being objective and a team player are the keys to great product marketing.

How to Measure Success for Product Marketing

How do you know, however, if you are actually reaching the target customer? The four key elements mentioned above have their own set of metrics:
  1. What to build (engagement metrics: log-ins, usage stats, sales figures);
  2. Who to build for (customer feedback loop, cancellation surveys, funnel conversion rates);
  3. How to price it (surveying and customer research);
  4. And how to sell it (traditional acquisition metrics:click through and conversion rates etc.).
"Every dimension of product marketing is measured a different way, but it's absolutely a measurable science." That being said, at every stage of your growth, all of those metrics should be given different attention. The importance of certain part of product marketing varies at any given time.

So when you are thinking about investing in product marketing, what else you will take into consideration?

Yan Tang is enrolled in the Professional Master of Business Administration (Marketing) program at Seattle University. She also serves as a Business Relationship Management and Small Business Coach at Seattle University's Innovation and Entrepreneurship Center. Previously, Ms. Tang worked for Manpower in the company's Shanghai, China office where she served in several roles including Service Consultant, On-Site Project Manager for IBM Shanghai, and Recruitment Consultant. Ms. Tang may be contacted at yantang1126@gmail.com.

December 12, 2016

Report Surveys Corporate Executives on Mergers and Acquisitions and the Use of Analytics and Big Data During the Process

Sponsored by EY, The Economist Intelligence Unit (EIU) published the 15th edition of its Global Capital Confidence Barometer claiming that 57 percent of executives plan to make acquisitions in the next 12 months. "The need to respond to challenges while navigating a complex and fast-changing environment makes dealmaking an imperative, not an option. Executives are looking at more targets, and deals will tend to be smaller. However, as boards look to make innovative acquisitions, they are using analytics to make better decisions."

The Global Capital Confidence Barometer gauges corporate confidence in the economic outlook and identifies boardroom trends and practices in the way companies manage their Capital Agendas — EY's framework for strategically managing capital. It is a regular survey, conducted by the EIU, of over 1,700 senior executives from large companies around the world.

In addition to over half of executives expect to actively pursue acquisitions in the next 12 months, 49 percent of companies have more than five deals in their pipeline and 91 percent are using big data and analytics as part of their deal process.

With respect to the macroeconomic environment, "Most executives see the global economy as stable and say corporate earnings are back on track. But there are uncertainties ahead, both in the near and long term, including political stability in their home markets and tightening credit markets. As low growth and disruption continue, boards are focusing on mergers, acquisitions and alliances to create value."

The report addresses the topic of corporate strategy by saying: "Innovation, new technology and changing customer demands are challenging businesses to reinvent their products and operations. At the same time, greater regulation is adding complexity to corporate strategy. Most companies, with an imperative to reorganize their portfolios, are responding with a mix of buying and partnering to underpin future success."

From where do you see growth
within your company coming
over the next 12 months?
In fact, 45 percent of growth is expected to be inorganic, the report explains. Moreover, 57 percent of companies are actively reorganizing their portfolios and 71 percent are shifting skills and talent to take advantage of new working models.

The percentages below reflect those who intend to actively pursue acquisitions in the next 12 months:
  • Consumer products and retail — 71%
  • Diversified industrial products — 60%
  • Life sciences — 56%
  • Technology — 54%
  • Automotive — 54%
  • Oil and gas — 52%
How do you use analytics and
big data for executing your
M&A process and strategy?
In answering the question, "How do you use analytics and big data for executing your M&A process and strategy?" 55 percent of corporate executives use data analytics to better identify synergies and determine valuation of the targeted asset, 54 percent use big data to identify growth options and potential targets, just 4 percent say they are not using data analytics but are considering it.

Lastly, as someone who takes a strategic approach in global business, I appreciate the top five questions every executive needs to ask as they invest for growth:
  1. Are you capitalizing on the breadth of deal structures to realize your strategic objectives?
  2. Will geopolitical challenges derail your growth strategies?
  3. Are you using analytics and big data to bring greater clarity to complex deals?
  4. Is an off-the-shelf approach to integration the best recipe for success?
  5. Are you enhancing or destroying the value of acquired innovation?
Do you find this report useful for your business? Is your company considering making an acquisition in 2017 and if so, how are you using data analytics during the M&A process?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.