www.pwc.

com/ceosurvey

Delivering results
Growth and value in a
volatile world

15th Annual Global

CEO Survey 2012
View from India
2 PwC 15th Annual Global CEO Survey

Contents

Confidence and concerns 04

Creating value 07
Capitalising on changing demographics and consumer preferences 08
Managing domestic risk: Regulation, governance, and corruption 10
Building resilience to global disruptions 11
Developing global talent 13
Innovating and creating intellectual property 15
What’s next? 16
 Key findings in India 3

Preface

The year 2011 was supposed to be when economies like India and China returned to the high
growth rates of before 2008. Instead, we witnessed the continuing Eurozone crisis and closer to
home, battled moderate growth, high inflation, a slowdown in reforms and heightened concerns
around governance.

It’s no wonder then that though global business confidence is still high, it is down from what we
saw last year. However, CEOs are still positive about the India story and have ranked the country
as the fourth most favourable nation for overall growth prospects in the next 12 months, just
behind China, the US and Brazil. CEOs in India, in particular, are optimistic about their
companies’ growth prospects. Despite concerns, the domestic market opportunity remains large
while other emerging markets like Africa also beckon with their fast-growing economies.

For foreign multinational companies, markets such as India are increasingly important in order
to deliver growth and create long-term value. Thus, many are growing whole operations and not
just sales in India.

The pace of the required policy reforms remains uncertain, and social and physical
infrastructure is woefully short. In spite of our billion-plus population, talent shortages abound.
We asked CEOs how they plan to create value and deliver growth. The 76 CEOs we interviewed
in India and another 176 outside the country who prioritised India as a key overseas market said
that they will do so primarily by growing their customer base, building efficiencies in their
operations and accessing the right talent in India.

The Indian consumer is changing rapidly before our eyes, as is our workforce. Technological changes
make operational models obsolete faster than ever before. Therefore, 2012 should be exciting.

The India view of the 15th Annual Global CEO Survey probes these issues and more.

I am delighted to share the publication with you and hope you will find it insightful and enjoyable.

Deepak Kapoor
Chairman
PwC India
4 PwC 15th Annual Global CEO Survey

Confidence and concerns

Introduction
From across 60 countries, about their growth prospects over the
The Indian economic outlook for 2012 is
1,258 CEOs participated in next three years. Around 55% of the
of sustained market opportunity even as
PwC’s 15th Annual Global global economic growth looks patchy CEOs interviewed from India were ‘very
CEO Survey. Seventy-six of and financial markets remain volatile. In confident’ about their company’s growth
the CEOs were from India. the shadow of converging global prospects as compared to 40% globally.
We also conducted 38 in- economic fortunes, CEOs from India are Confidence of CEOs in India is driven by
depth interviews with CEOs less confident of their companies’ optimistic growth prospects in the
worldwide. In this document, growth as compared to last year. domestic and new geographic markets,
we focus on the view from However, they are significantly more particularly those in other emerging
confident than their global counterparts economies.
India, comparing it with
findings from China and the
global survey Figure 01: CEOs in India are more confident than their global peers over short-
term growth prospects
Q: How confident are you about your company’s prospects for revenue growth over the
next 12 months?

Base: All respondents (1258); India (76); China (122)

Source: PwC 15th Annual Global CEO Survey 2012

Figure 02: CEO confidence in India has dipped from last year
Q. Percentage of CEOs ‘very confident’ about their company’s growth over the next three years

47

Global Base: All respondents (2011= 1,258; 2010=1,201; 2009=1,198; 2008=1,124; 2007=1,150)
India Base: All respondents (2011= 76; 2010=40; 2009=30; 2008=30; 2007=30; 2006=27)
China Base: All respondents (2011= 122; 2010=39; 2009=60; 2008=60; 2007=34)
Source: PwC 15th Annual Global CEO Survey 2012
 Key findings in India 5

Despite their confidence, CEOs from Figure 03: CEOs in India view increased share in existing markets as a major short-
India are increasingly concerned about term opportunity
potential economic and policy threats Q: Which one of these potential opportunities do you see as the main opportunity to grow
such as bribery and corruption, your business in the next 12 months?
uncertain or volatile economic growth,
and over-regulation. Some CEOs also
cited an increasing tax burden, a shift in
consumer spend and behaviours and
new market entrants, as the top three
potential business threats.

The emergence of a middle-class

in India and in China is going
Base: India (76)
to be a huge stimulus for the Source: PwC 15th Annual Global CEO Survey 2012
global economy over the next 20
years. Additionally, emerging
technological advances – whether
in the digital domain, bio-
technology, or any number of
fields – still have a long way to
go before their full positive effect
on the economy is felt. So I am
concerned about the next two or
three years, but optimistic over the
long-term.
Dimitrios Papalexopoulos
CEO
TITAN Cement SA, Greece
6 PwC 15th Annual Global CEO Survey

Figure 04: Bribery and corruption is the most pressing threat for CEOs in India
Q: How concerned are you about the following potential business, economic and policy threats to your growth prospects?

India Global China

New market entrants

Sorted by percentage of respondents who stated ‘extremely concerned’ or ‘somewhat concerned’

Base: All respondents (1258); India (76); China (122)
Source: PwC 15th Annual Global CEO Survey 2012
 Key findings in India 7

Creating value

The Indian report is based on the Managing domestic risk: Developing global talent
findings of PwC’s 15th Annual Global Regulation, governance,
CEO Survey. Supplementing the survey Compared to their global peers, CEOs
results with insights from our global
and corruption from India are less concerned about the
network and 38 in-depth interviews CEOs from India are particularly availability of talent in spite of the
with CEOs, we have identified the concerned about regulatory uncertainty widely acknowledged skills gaps in the
following five themes most relevant to and the increasing cost of compliance. country. We find that they are taking
CEOs operating in India today. On one hand, regulation is extensive, charge by heavily investing in
and on the other, key economic reforms developing in-house talent, instead of
required to support domestic growth are waiting for a systemic change. They are
Capitalising on changing also making technology investments to
being postponed. The discussion on
demographics and corruption and lack of governance in bridge skill gaps that will become more
consumer preferences high places dominated headlines pertinent in the long run.
India’s growth will remain dependent throughout 2011. It may feel as if
macroeconomic risks are multiplying for
Innovating and developing
largely on domestic consumption.
However, the profile of the Indian stakeholders in Indian businesses. CEOs intellectual property
consumer is changing because of rapid are spending considerable time in CEOs in India are focussed on cost-led
urbanisation, changing preferences due managing these stakeholder concerns. transformation while CEOs in China
to rises in income and a young seem to be focussed on fundamental
workforce. Besides, a new consuming Building resilience to product and service innovation. In the
class is pushing its way up from the global disruptions last section of this report, we examine
bottom of the pyramid and is flexing its While a number of CEOs have this difference and the possible
buying power. There will be winners businesses outside India, many see consequences for Indian businesses.
and losers as businesses pivot to international markets as an important
address markets and customers they growth vector. Even those focussed only
are less familiar with. on the domestic market are affected by
unrelated high-impact external risks
such as political upheavals, natural
disasters, or a sovereign debt crisis.
CEOs from India are learning that
prudent risk management requires them
to understand the consequences of a
range of risks that may be
geographically remote but will
increasingly impact their businesses.
8 PwC 15th Annual Global CEO Survey

Capitalising on changing demographics

and consumer preferences
India’s growth prospects will remain • The working women: The annual Emerging geographies
dependent on its domestic consumption. report of the Ministry of Labour and
Thirty-eight per cent of the CEOs Employment (2010) puts the number Tier I cities, such as Delhi and Mumbai
interviewed in India stated increased of employed women (in urban areas) are fast reaching saturation levels. In the
share in existing markets as the main at 5.41% of the total workforce, an coming decade, Tier II and III cities will
opportunity for business growth over increase of 1.63% as compared to command the attention of CEOs in India.
the next 12 months. However, 70% of the last decade. Independent, with a Out of the 700 malls planned in the
the CEOs named changes in consumer yen for taking their own decisions, country, almost 40% are expected to
behaviour and spending as the major this segment holds untapped come up in Tier II and III cities. Jaipur,
business threat. CEOs must adapt and potential for CEOs to explore. Coimbatore, Ludhiana and Chandigarh
innovate to address India’s rapid will be among the top markets for CEOs
• Gen Y or the millennials: Currently,
urbanisation, its young population, and to apply their growth strategies. Several
India is passing through exceptional
an emerging middle-class with an Tier II cities are witnessing large mixed-
demographic changes. The country
increasing disposable income. use projects in housing, retail,
has around 500 million people under
entertainment and hotels. These are
the age of 25. The Annual Report to
Segmentation in focus the People on Employment by the
attracting big investments and creating
job opportunities.
PwC’s report, Winning in India’s retail Ministry of Labour and Employment
sector: Factors for success1 characterises (2010) projects the proportion of Changing preferences
the new consumer segments driving population in the working age group
purchases in mobile phones, fashion, (15-59 years) from approximately With increases in disposable incomes,
accessories, food and beverages, quick 58% (2001) to more than 64% frequent overseas travel and the advent of
service restaurants, etc. (2021) of the total population. online commerce, businesses are
witnessing a paradigm shift in preferences
• The upper crust: This constitutes CEOs are formulating innovative of consumers. The emphasis on brand,
the affluent upper middle class. The business models to cater efficiently to the private labels and luxury is higher now
emphasis here is more on status, diverse segments while embracing new more than ever before. Alongside this, the
luxury and high-value exclusive opportunities. However, segmentation is advent of technology has played a pivotal
products. Price does not act as a made more complex by a variety of role in defining the new consumer.
differentiator. Status is the driving drivers that influence consumer decisions
force. Traditionally small, this and purchases within each of the above The new ‘middle-class’ consumer therefore
segment has been growing at over categories. could be any one of the following:
20% in the last few years. • The 30-year-old woman who holds an
• The emerging middle class:
Heterogeneous market executive position, drives and uses
Conservative in nature, this Indian consumer preferences vary in ready-to-eat packaged foods
demographic has emerged as a terms of socio-economic grouping, • The 20-something manager who is
strong segment for CEOs to target. education levels, attitudes, purchase more comfortable with gadgets, clubs
The focus is more on value for money drivers, buying preferences, on the weekends and has more than
than low cost. About six hundred behaviours, etc. two credit cards
million of the ‘emerging middle
• The small businessman in a Tier II city
class’ will reside in India by 2021.
who drives a sedan and sends his
children to an international school.

1 PwC’s thought leadership Winning in India’s retail sector: Factors for success on the country’s retail environment (2010)
 Key findings in India 9

Emerging middle class: The new frontier

Four billion of the world’s population lives in countries and regions such as India,
China, Indonesia, parts of Africa and Latin America, where the per capita annual
income is between US$ 1,000 and 4,000. Within these countries, there is a vast
segment of population representing the ‘emerging middle class’ that is prompting
business leaders to fundamentally rethink business strategies. This is the focus of
PwC’s recent research report ‘Profitable growth strategies for the Global Emerging
Middle’. Approximately six hundred million of the ‘emerging middle class’ will reside
in India by 20212.
India’s population distribution (millions) US$ 1.19 billion US$ 1.36 billion
Household income/year (INR) US$/day per capita 2010 2021 (Projection) (%)
> 850,000 Upper middle + >$10 14%
300,000 – 850,000 Middle $5-$10 23%
150,000 – 300,000 Emerging middle $1.7-$5 42%
< 150,000 Low <$1.7 21%

Source: PwC Analysis, NCAER (National Centre for Applied Economic Research), CMI
*Purchasing Power Parity (PPP)
Base: All respondents (1258); India (76); China (122)

New value propositions Innovative business models Shift in mindset

Value propositions designed for Companies also need innovative Another critical element to achieve
countries at the upper end of the global business models and processes in order profitable growth as consumer
income distribution spectrum seldom to overcome institutional weaknesses demographics and preferences change
work for a market such as India. and gaps in everything from credit is a shift in mindset. Companies need to
Instead, companies have to develop a systems to supply chains. Companies adjust externally as well as internally to
nuanced understanding of the have to collaborate with key players in cater to the ‘emerging middle’
aspirations and unique trade-offs of the the unorganised or informal economy to consumer. It is not only products that
diverse Indian consumer and develop create an ecosystem supporting their must be adapted or built anew, but also
solutions to meet their varied needs. For business model. While prototyping and production, distribution and marketing
example, value propositions can’t simply pilots are required in the initial stages, capabilities - in other words, entire
focus on low cost if they are going to scale solutions are essential for business models. Often this requires a
connect with the ‘emerging middle’ delivering profitable results. strong leadership presence, a higher
segment’s aspirational framework. risk appetite and a willingness to adopt
Companies can also not treat the new values and metrics to drive and
‘emerging middle class’ as a measure success.
homogeneous set of customers.
Differences based on location (urban
versus rural), age, religion and language
require customised products and
services based around a standard and
scalable platform.

2 PwC’s thought leadership Profitable growth strategies for the Global Emerging Middle (GEM): Learning from the ‘Next 4 Billion’ markets.
10 PwC 15th Annual Global CEO Survey

Managing domestic risk: Regulation,

governance, and corruption

2011: Spotlight on bribery Regulatory uncertainty Ministry of Corporate Affairs released the
and corruption and overload National Voluntary Guidelines on
Environment and Social Reporting (June
In the survey, a staggering 92% of CEOs Nearly 86% of CEOs in India, compared 2011). In November 2011, the Securities
interviewed in India were ‘extremely to 45% in China and 56% globally, are and Exchange Board of India (SEBI) made
concerned’ or ‘somewhat concerned’ concerned about over-regulation as a it mandatory for the top 100 listed
about bribery and corruption. They serious threat to their ability to deliver companies to report on the National
consider it a major threat to the growth growth. In 2011, India ranked 132 (out Voluntary Guidelines. The Companies Bill
of their business. This is not surprising of 183 countries) in the ‘Ease of Doing 2011 proposes to mandate a certain
as in 2011, Transparency International’s Business Index’ published by the percentage of corporate profits for
Corruption Perceptions Index cited India International Finance Corporation and corporate social responsibility (CSR) and
at 3.1 (on a scale of 1 to 10, where one the World Bank4. setting up a board-level committee on CSR
signifies ‘highly corrupt’ and 10 signifies The pace of policy reforms required to and its reporting.
‘very clean’ in terms of perceptions of move the economy forward has slowed
corruption), not far from nations such as considerably. Before the beginning of Different priorities for
Zambia and Namibia3. the winter 2011 session, the government value creation
Over 2011 the political and economic had listed 32 bills for consideration. Of CEOs in India are prioritising corporate
agenda of India was dominated by these, only 15 bills were passed by the governance and stakeholder
anti-corruption debates and legislation. two houses5. management as key areas where they
This culminated in anti-corruption On the other hand, corporations today are would like to personally spend more
legislation being brought into the facing increasing regulation and scrutiny. time (see figure 05). In comparison,
Parliament, which is still in the process For example, in the area of corporate globally, CEOs wished to spend more
of being enacted. sustainability and social responsibility, the time with their customers and people.
Inevitably, a question arises as to
Figure 05: CEOs from India are prioritising spending time with stakeholders (lenders, whether, in prioritising governance as
boards, shareholders) significantly more than their global counterparts their area of focus, CEOs from India are
Q. Do you wish that you personally could spend more time on each of the following activities? taking their eyes off the market and off
talent management. We might argue
that in the short run, it is time well spent
as Indian companies are moving from
relationship-based governance
structures to contract-based ones, family
- controlled businesses are converting to
professionally-run businesses, and local
revenue sources become international.

Base: All respondents (1258); India (76); China (122)

Source: PwC 15th Annual Global CEO Survey 2012

3 http://cpi.transparency.org/cpi2011/results/
4 http://www.doingbusiness.org/rankings
5 http://www.prsindia.org/administrator/uploads/general/1325239749_Vital%20Stats%20-%20Parliament%20in%20Winter%20Session%202011%20v3.pdf
 Key findings in India 11

Building resilience to global disruptions

Insulated no more Two-pronged response:

Last year’s BP oil spill in Market choices and
Businesses operating in India are not as
the Gulf of Mexico has led operational efficiency
insulated from global disruptions as
many companies to re-ask many believe. Eighty per cent of the CEOs from India are challenging
the question-Is enterprise CEOs surveyed from India said that their conventional wisdom to decide which
risk management one of companies were directly affected by the markets are most critical for growth.
those unfortunate check- European debt crisis, 36% cited an Besides Asia, Africa and the Middle East
the-box activities that impact from the political upheaval in the are top markets for them. The large but
every company should be Middle East and 22% cited the slower growing western markets have
doing because people tell earthquake and nuclear crisis in Japan. slipped down in their priority, but
us we should, or is it one Nearly 68% of CEOs from India stated continue to be important.
that the ongoing sovereign debt crisis in
that we embrace?
Europe has triggered changes in their
Richard O’Brien strategy, risk management, or Figure 06: Shift to Asia for growth
President and CEO
operational planning. Q. In the next 12 months do you expect your key
Newmont Mining Corporation operations in these regions to decline stay the
Companies are learning that same or grow?
preparedness for uncertainty is about Company headquarters
focussing on the consequences of
Region of operations Global India China
business disruption. This approach can
Western Europe 36 25 47
bring risk discussions to a more strategic
level. In our experience, when the focus North America 55 50 54
is on preparing to respond to Middle East 67 79 47
consequences, discussions occur across Latin America 77 30 65
people involved in strategy, operations, CEE 60 70 55
risk management, crisis management Australasia 57 72 50
and business continuity management.
South Asia 80 94 60
By contrast, a focus on assessing the
South East Asia 83 92 67
likelihood of particular risks tends to
remain theoretical and the domain of East Asia 77 91 71
risk managers rather than the functions Africa 75 83 41
that will have to respond to disruptions.
*% Respondents who stated ‘grow’
0% 100%

Base: All respondents (1258); India (76); China (122)

Source: PwC 15th Annual Global CEO Survey 2012
12 PwC 15th Annual Global CEO Survey

Indian CEOs may be deliberately In response to the aftermath of the global alliances or joint ventures in the last
focussing on emerging markets because financial crisis, there has been a year in comparison with global peers.
they believe it will be difficult for them deliberate focus on operational Deal activity has been going down, over
to compete in the slow growing western efficiencies in India. In the past year, cost the last couple of years, with FDI inflows
markets or perhaps they believe that in reduction and outsourcing have been at US$ 33 billion in 2010-11. Cross-
these trying times, the right strategy is priorities for CEOs in India and will border deals will continue to be difficult
to find opportunities in markets where continue to be so in the near term.In in 2012 as the financial crisis continues
consumer preferences may be similar to contrast, at a global level, CEOs are and liquidity is low. Companies with
India. Here they can use value prioritising joint ventures and alliances strong balance sheets will buck the
propositions created and refined in India far more than their Indian counterparts. trend. “Company valuations are now
without much tailoring for the local Once the global economy emerges out of much more attractive than they were
market. Examples such as Bajaj Auto’s the crisis, CEOs in India will look forward last year,” said Ajay G Piramal, CEO,
export of its low-cost and aspirational to use their very efficient platforms to Piramal Group Ltd, India. “Today, we
Bajaj Boxer motorcycle to Nigeria would aggressively launch their organisations would pay half or one-third of what we
support the latter theory. Bajaj Boxer has into global markets. would have paid for these companies
succeeded in becoming the market CEOs from India have put a much lower last year,” he concludes.
leader, almost wiping out the Chinese focus on mergers, acquisitions, strategic
competition there.

Figure 07: Focus on cost reduction in India

Q. Which, if any, of the following restructuring activities have you initiated in the past 12 months?

Global India China

Entered into a new strategic alliance or joint venture Divested majority interest in a business or exited a significant market
Outsourced a business process or function Ended an existing strategic alliance or joint venture
Completed a cross-border merger or acquisition

Base: All respondents (1258); India (76); China (122)

Source: PwC 15th Annual Global CEO Survey 2012
 Key findings in India 13

Developing global talent

Figure 08: CEOs in India view infrastructure, health of workforce and Taking charge: Self-
reducing poverty as top government priorities sustained ecosystems
Q. Which three areas should be the government’s priority today?
CEOs operating in India are taking
charge in the education and skills
development sectors. A mere 34% of
CEOs surveyed from the country, in
contrast to 47% at a global level, stated
creating and fostering a skilled workforce
should be the government’s priority.
Investing in overall living and working
conditions, formal education systems,
and adult and vocational training
programmes were the top three
investment priorities relating to
workforce development for CEOs
operating in India. In contrast, the top
priority at a global level was to invest in
ensuring a future supply of potential
employees.
The strategic focus on talent
development from CEOs in India
appears to be paying dividends. Around
66% were ‘very confident’ about having
access to the talent needed to execute
their company’s strategy over the next
three years. Neither Chinese (38%
confident) nor global (30% confident)
peers responded with such confidence.

Base: All respondents (1258); India (76); China (122)

Source: PwC 15th Annual Global CEO Survey 2012
14 PwC 15th Annual Global CEO Survey

Figure 09: Taking charge of workforce training and development

Q. To what extent do you agree with the following statements?

Respondents who stated ‘agree’ or ‘agree strongly’

Base: All respondents (1258); India (76)
Source: PwC 15th Annual Global CEO Survey 2012

Figure 10: Confident in having access to talent As India enters a decade of maturing
growth, CEOs will need to re-prioritise
Q. How confident are you that you will have access to the talent needed to execute your
company’s strategy over the next three years? their talent development agenda. While
the past decade focussed on rapid
growth, the next decade will be about
maturing leadership. It will focus on
coping with the changing workforce
demographic and making economically
sound choices in training, innovation
and intellectual property development
development.

Base: All respondents (1258); India (76); China (122)

Source: PwC 15th Annual Global CEO Survey 2012
Talent is the most strategic issue for
a country like India. The country
is tremendously short on talent.
Attrition rates are in double digits.
There is a gap between what comes
out of technical institutes and what
the industry needs.
Baba Kalyani
Chairman and Managing Director
Bharat Forge Ltd
 Key findings in India 15

Innovating and creating intellectual

property

Figure 11: Talent constraints are causing delays in strategic initiatives and meeting growth forecasts
Q. How talent constraints have impacted your company’s growth and profitability over the past 12 months?

% %
% %
% %
% %
% %
% %
% %
%

Base: India (76); China (122) Respondents who stated ‘yes’

Source: PwC 15th Annual Global CEO Survey 2012

We observed a sharp contrast between Baba Kalyani, Chairman and Managing This is partly related to the widening
the approach adopted by CEOs from Director, Bharat Forge Ltd, India, definition of innovation. CEOs in
India and China towards growth and laments the lack of innovation, “India industries in the throes of disruptive
profitability. While CEOs in China state does not have the infrastructure for change require radical innovation.
talent constraints adversely impact their hard-core innovation. For innovation to If their business cannot quickly create
ability to pursue a market opportunity happen, we need: people, industry and new products or services that customers
and innovate effectively, CEOs in India organisations that believe and invest in will buy, they will not survive. However,
are more concerned about the impact on innovation; technical universities that innovation does not just mean end-
product and service delivery, and partner in innovation; and, most product or service changes. It,
expenses. Can we infer from this finding importantly, an ecosystem of sometimes, now includes taking costs
that CEOs in India are concentrating on technologists and engineers. Silicon out of processes or forming strategic
short-term results while CEOs in China Valley is able to come up with alliances to collaborate. Each aspect of
are prioritising their agenda to foster innovations because it has the necessary the business is fair game for re-
innovation and capitalise on new ecosystem.” invention. Executives are targeting
opportunities i.e., developing Seven out of ten CEOs from India plan changes to their revenue and margin
intellectual property for the long run? to change R&D and innovation capacity models and the organisation as well to
in 2012. find better ways to innovate across many
dimensions6.

6 PwC’s Caught in the crossfire, a 2009 survey of 65 executives on innovation strategies and expectations.
16 PwC 15th Annual Global CEO Survey

What’s next?

Thanks to the positive outlook of the 2. How well do you understand the ‘emerging middle’. It’s not only
Indian economy, CEOs in India are more changing consumer? products that must be adapted or
confident than their global peers of India’s vast and varied population built anew, but also production,
delivering growth and creating value. poses a challenge for its CEOs as they distribution and marketing
This is despite the volatility of the global need to cater to diverse cultures and capabilities - in other words, entire
economy as well as huge domestic preferences. Moreover, the Indian business models.
macroeconomic concerns. We believe consumer is changing before our eyes 4. Is your talent strategy fit for growth?
the findings of our survey have broad with increased urbanisation, levels of Cost-focussed measurements around
implications for business in 2012 and education and income, exposure to talent strategy need to give way to
beyond, as Indian companies position media, etc. Therefore, value measurements around returns on
themselves for growth. The following deliverables for one market will not investment, as leaders increasingly
ten questions are distilled from CEO hold for another and value delivered implement new approaches to solve
insights and can help you, as business yesterday may not hold tomorrow. To their talent shortage problems.
leaders, create value for your grow in this heterogeneous and Eighty-seven per cent of the CEOs
stakeholders in these volatile times. fast-changing market, companies from India and China are seeking
1. Does your growth strategy focus need to be flexible and agile. relevant data and analysis from talent
on new fast-growing cities and 3. Have you figured out how to make managers to make and inform
rural markets? money in the ‘emerging middle’ investment decisions around people.
While most of India still lives in rural market? Implementing strategic workforce
areas, the rapid pace of urbanisation CEOs expect to either modify or planning will help leaders look
over the next decade will continue to create products for specific markets beyond talent shortages today to
be a major challenge for CEOs in to suit local customer preferences. align the talent needed to fulfil
India. A third of them cite increased Some four billion of the world’s business plans.
share in existing markets as a population live in countries where 5. Are you investing enough in
dominant driver for business growth the per capita income is between US$ innovation?
over the next 12 months. However, 1,000 and 4,000 per year. This vast The West has led the world in
not only are consumer preferences segment represents an ‘emerging innovation in recent history.
different in rural areas, but also middle class’ in China, India and However, in a number of industries
supply chains are hard to craft for elsewhere prompting business such as pharmaceuticals, businesses
these markets that are geographically leaders to fundamentally rethink in Asia, particularly China have been
dispersed. Profitable growth in this business strategies that have been increasing R&D spend.
unique and changing urban-rural successful. Value propositions
split will require CEOs to make designed for countries at the upper Further, while primary R&D is still
long-term regional bets backed by end of the global income distribution largely conducted in home markets,
aggressive investment. seldom work for the needs of this businesses are increasingly shifting
 Key findings in India 17

some capabilities to their new priority when, but companies can better deal 10. Where are the biggest
markets. More innovations created in with uncertainty, and take a more opportunities for business and
emerging markets are flowing their strategic approach to risk, by focusing government to coordinate better?
way back to other markets according on likely consequences, no matter Compliance with a growing body of
to CEOs. Thus innovation is what the cause. regulations is a complex task for most
necessary not only for those seeking 8. Are you responding to the needs businesses. This is why CEOs from
global leadership but also for and constraints of the communities India consistently report over-
protecting local markets. in which you operate? regulation as a threat to their growth.
6. Businesses today must collaborate CEOs from India recognise that However, the successes of the private
to deliver results. Does your sustainable business growth requires and public sectors are increasingly
strategy address the question of working closely with local intertwined. More than 60% of CEOs
how and with whom you should populations, governments and interviewed in India believe that
collaborate for better results? business partners, as well as infrastructure developments and
Collaboration with an increasing investing in local communities. This maintaining the health of the
number of stakeholders is the crux of can mean creating job training workforce are top priorities for their
the CEO agenda in India today. CEOs programmes, helping to manage governments. All of the CEOs
in India are finding it necessary and resource constraints or contributing interviewed in India say that their
largely beneficial to engage with to health solutions. Over 88% plan to business plays a role in workforce
boards, providers of capital, invest to improve overall living and development, other than their own
regulators, policymakers, other working conditions in the regions employees. Areas such as
businesses as well as the community where they operate, for example. infrastructure development,
in which they operate. Forty-two per education, intellectual property
9. Are you adapting your governance protection, healthcare and regulatory
cent of CEOs in India state that they model to changing stakeholder
would like to spend more of their convergence standards are ripe for
expectations? increased collaboration between the
personal time meeting with boards, The organisation of the future will
shareholders and providers of capital. public and private sectors.
likely be accountable to a different
7. Do your strategic plans focus on mix of stakeholders from a different
how to respond to the most serious mix of markets. Governance models
consequences you could face? need to adapt, beginning with
The range of CEO concerns in India building a leadership pipeline that
reflects how diverse sources of risks reflects potential future demands. It
are. For example, 92% are concerned is a key area of focus in India, with
about bribery and corruption and 37% of CEOs concerned about
86% are concerned that over- recruiting and retaining high-
regulation will impact business. The potential middle managers.
number of potential risks and their
inter-relationships make it difficult to
predict what will occur where and
18 PwC 15th Annual Global CEO Survey

Contacts

Bharti Gupta Ramola

Email: bharti.gupta.ramola@in.pwc.com
Phone:+91 9810000734

Shashank Tripathi
Email: shashank.tripathi@in.pwc.com
Phone: +91 9819678900

Arup Mazumdar
Email: arup.mazumdar@in.pwc.om
Phone: + 91 9930588938
Key findings in India 19
pwc.com/india
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