Top-20 Business Transformations of the Last Decade - ByteScout
  • Home
  • /
  • Blog
  • /
  • Top-20 Business Transformations of the Last Decade

Top-20 Business Transformations of the Last Decade

The last decade has witnessed a variety of attempts by businesses to service products i.e. businesses have resulted in hiring or leasing products rather than selling the products themselves. This, on the other hand, has a range of consumer and environmental benefits. Under the leadership of Raty Anderson, Interface has been the first company to build a radically new business model around the concept discussed above.

TOP-20 Digital Transformations

The company has been avoiding the emission of carbon and a low carbon economy requires a rapid acceleration of business model changes that apply the principle of delivering access to the function rather than product ownership and making this the norm rather than the exception.

Driven by a balance of corporate responsibility and pursuit of market opportunities and competitive advantage, many companies have developed low carbon product ranges. Philips in 2012 reported it’s a green product, Ecovision, and that year its sales improved from 39% to 50%. This has been embraced by other companies including P& G and GE through its Ecomagination project.

Lenses for Grading

The aim of this paper is to pinpoint the global companies that have recorded the highest business transformations within the last decade. The lenses used in the classification have been discussed below.

  1. New worth under this category we look at the ability and potential of companies in creating new products, services, creation of new markets or penetration to areas where their impact wasn’t felt in the past and new business models. This is the fundamental metric and it uses the percentage of revenue outside the core parameter that can be attributed to new growth areas.
  2. Repositioning the core this parameter looks at how effective a company adapts its core business to changes or disruptions in the market that it commands. How it develops a legacy when there are market changes and disruptions.
  3. Financials this parameter looks at the posting of strong financial and stock market performance. It also looks at companies who in the previous year(s) made losses and now they have churned that around and are making profits. It also looks at the revenue Compound, Annual Growth Rate (CAGR), profitability and the stock price during the transformation period.

The following table presents the 20 global companies that have been ranked highest in their new-growth transformation. Each of the companies presented showed some improvement in the development of new products, services as well as business models. Repositioning is very important as well as financial performance. The following table presents the numbering,

Company HQ

New growth area revenue as % of a total business: X%

Stock CAGR*

Since the base year of transformation: X%

Benchmark CAGR: X%

1. Netflix (US)

Original content; 44%

CAGR since 2012:  59%

S&P 500: 10%

2. Adobe  (US)

Digital experiences: 27%

CAGR since 2009: 26%

S&P 500: 10%

3. Amazon (US)

Web services 11%

CAGR since 2009: 39%

S&P 500: 10%

4. Tencent (China)

Fintech transportation 25%

CAGR since 2011: 32%

Hang Seng: 1%

5. Microsoft (US)

Intelligent cloud: 29%

CAGR since 2010: 17%

S&P 500: 9%

6. Alibaba (China)

Fintech health tech: 14 %

CAGR since 2013: 8%

NYSE Index: 1%

7. Orsted (Denmark)

Offshore wind: 37%

CAGR since 2017: 30%

OMX Copenhagen 0%

8. Intuit  (US)

Online ecosystem: 14%

CAGR since 2012: 22%

S&P 500: 10%

9. Ping An (China)

Fintech health tech: 6%

CAGR since 2012: 22%

SSE Index 2%

10. DBS Group (Singapore)

Digital platforms 48 %

CAGR since 2013: 12%

Singapore Exchange -1%

11. A.O Smith (US)

Water tech: 100%

CAGR since 2009: 25%

S&P 500: 10%

12. Neste (Finland)

Renewable fuels 70%

CAGR since 2010: 24%

OMX Helsinki 25: 7%

13. Siemens (Germany)

Digital factory initiative: 26%

CAGR since 2012: 8%

DAX index: 8%

14. Schneider Electric (France)

IoT-enabled solution: 22%

CAGR since 2012: 8%

S&P Global 100: 6%

15. Cisco (US)

Subscription applications: 43%

CAGR since 2010: 9%

S&P 500: 9%

16. Ecolab (US)

Water & Energy services 44%

CAGR since 2011: 16%

S&P 500: 9%

17. Fujifilm (Japan)

Medical imaging/healthcare: 18%

CAGR since 2010: 7%

Tokyo Exchange: 6%

18. AIA Group (China)

Wellness & Prevention: 10%

CAGR since 2013: 15%

Hong Kong Index:2 %

19. Dell (US)

Infrastructure & security: 51%

CAGR since 2013: 29%

S&P 500: 11%

20. Philips (Netherlands)

Healthcare: 65%

CAGR since 2014: 6%

S&P 500:  6%

Key CAGR stands for Compound Annual Growth Rate

Source: Insight, 2019

The table presented above shows that each of the companies developed a new-growth business that is not part of what it has been executing traditionally, and the new businesses have a substantial share of the overall business.

For example, Netflix in 2013 started producing original content to add to the original activity is was executing of distributing digital content. Since developing new business in 2013, its profit has tripled and its stock CAGR increased by 57% as shown in the table above.

Finding New Purpose

There were other companies that made it to the list courtesy of finding a new purpose and this was prevalent in the healthcare sector. This one is exemplified by the Chinese AIA Group which moved beyond an insurance company to become a wellness company, it is also prevalent in the electronics company where Philips found itself diversifying from the business of lighting to focus on healthcare technology.

Companies specializing in technology in the list too infused purpose to their organizations /fostering change rendering them among the top 20 most transformed companies.

Siemens made it to the list courtesy of maximizing the shareholder value to a mission of serving society. The transformation began in 2014 to harness technology.

Performing Mission Impossible

Transformations are hard to execute but for Orsted made it to the list by divesting its oil and natural gas businesses and started phasing out coal and this brought about phasing out coal that created a market niche.

When they began executing ocean-based wind farms that are environmentally friendly, they cut their costs by 60% and by 2016, its net profits had hit the ceiling by $3, billion since embarking on the transformation process.

Conclusion

In this era of persistent change, companies can only survive and even grow, not based on their size or their performance but on their ability to reposition and create a new future, and leverage purpose-driven mission to that end. This renders strategic transformation a business imperative of the 21st century.

   

About the Author

ByteScout Team ByteScout Team of Writers ByteScout has a team of professional writers proficient in different technical topics. We select the best writers to cover interesting and trending topics for our readers. We love developers and we hope our articles help you learn about programming and programmers.  
prev
next