AI and data management are key investment areas for entrepreneurial businesses as they look to retain their competitiveness. Seven out of 10 CEOs surveyed for the October 2023 CEO Outlook Pulse acknowledged that their business must act now on GenAI to avoid giving their competitors a strategic advantage. Nevertheless, a similar percentage (68%) reported being stymied by uncertainty in this space, making it challenging to respond at speed. They are grappling with numerous AI-related challenges — from being overwhelmed by potential use cases and establishing a robust data architecture to developing a cohesive strategy.
Some of the quickest gains from AI deployment are efficiency and productivity improvements that can boost the prospects of slower-growth companies. Given the pace of developments, CEOs of entrepreneurial businesses need to quickly understand the implications of GenAI for their business, operations, people, industry and end markets if they are to keep up with competitors.
3. Customer centricity, pricing and innovation
Entrepreneurial businesses are acutely conscious of the customers’ rapidly changing needs and wants, as well as their buying patterns. So, a key priority for them in 2024 is improving their capabilities to better understand these developments. That involves improving the processes and technology that enable the gathering of valuable customer feedback and making better use of analytics. AI, for instance, can enable the analysis of enormous volumes of data in real-time, giving business leaders new insight into customer behaviors. Enhancing the company’s analytical capabilities will facilitate improved market segmentation, create more specific sales activity for groups of customers, and provide a more tailored customer experience.
Another fast-rising customer-related priority is the development of deeper, long-term customer relationships. This is being achieved through enhanced loyalty programs and retention management, as well as cross-selling and upselling programs.
Having struggled with the rapid inflation rates and a subsequent increase in cost of goods sold during 2023, entrepreneurial businesses are prioritizing a new approach to pricing in 2024. This comes after they recovered margins in 2023 by adopting relatively straightforward price increases. Under their new pricing approach, entrepreneurial businesses are using improved competitive and market intelligence to enable better pricing decisions and more effective sales programs, as well as a more frequent review of prices and margins by customer segment. They are also adopting new pricing strategies such as developing an intelligent, dynamic pricing approach for specific customer segments. An increasing number of companies are turning to so-called customer lifetime value models to transform their sales, pricing and retention strategies.
Additionally, there is a strong focus on improving the consistency of customer experience across all channels and touchpoints and aligning the brand promise with the customer experience. As a result, and in line with changing customer needs and expectations, entrepreneurial businesses are reevaluating and reshaping their product and service portfolios through innovation and engagement in strategic alliances and partnerships.
While it is not yet a "Top 5" priority, inorganic growth is one of the fastest-rising business priorities in the 2023 strategic growth plans analyzed. Entrepreneurial businesses are looking to make the right preparations for potential acquisitions, which includes building a good M&A team, growing their acquisition pipeline, as well as their alliance and partnership pipeline, and developing a robust capital allocation plan that is aligned to the business strategy.
Weathering the storm
It’s been clear for some time that uncertainty and change are the new constants for business leaders. EY research into the growth journeys of more than 1,000 market leading companies has shown that maintaining a balance between short term priorities and long-term value creation is crucial when it comes to achieving accelerated and sustainable growth over the years.
High-performing entrepreneurial businesses today seem to:
Know what’s coming
While overall growth may be decelerating, each business has a unique trajectory. Leading businesses are thinking ahead, monitoring and planning for what might be coming, and getting prepared. They have undertaken scenario analysis and planning, including analysis of geopolitical, economic, technological, ecosystem and climate developments among other concerns. They have also analyzed their own financial and customer demand scenarios to get a clearer view of the future, to prepare for what might be coming down the line.