Horváth

5th Annual CxOPriorities Study
Heiko Fink
Eva Kisker

Dr. Ralf Sauter
Jonas Mayer

Rebalance your Organization towards a Digital,
Deglobalized and Dynamic World

Horváth CxO Priorities – Content

01

Management Summary© Horváth01Management Summary

5th Annual Horváth CxO Priorities Study: Rebalance your Organization
towards a Digital, Deglobalized and Dynamic WorldDIGITAL
Digital transformation has returned to be the top
management priority, driven by advancements in AI andongoing long-term projects. To fully capitalize on thetechnological potentials, companies must define a clear AI
strategy, establish a structured AI target operating modeland cultivate the necessary skills within theirorganizations.

DYNAMICDEGLOBALIZEDCompanies are developing transnational
structures. Value creation including productdevelopment is shifting to the growth markets.
Key driving factors include streamlined supply
chains, favorable location conditions and cost
efficiencies. Successful transformations require
redefined governance and collaboration models
between the headquarter and regionalorganizations, as well as new competencies.

To navigate through the dynamic world, companies must identify
an optimal setup to ensure resilience. This involves fostering
agile organizational structures, defining new leadershipapproaches, promoting a culture of rapid innovation andcontinuous adaptability, implementing highly secure IT
infrastructure and establishing robust supply chains.
3

5th Annual Horváth CxO Priorities Study | 2024

© Horváth01Management Summary

5th Annual Horváth CxO Priorities Study: Management Summary for
manufacturing and service industries
Manufacturing industries
 For the first time, improvement of cost and profit
structures is the top management priority in the
manufacturing industry
 However, companies are performing adequately,with stable revenue development and areasonable EBIT outlook for the upcoming year Concurrently, companies worldwide are expanding
their workforce and creating jobs – except inGermany. The main growth is occurring in North
America, Asia and Eastern Europe The long-term reconfiguration of value chains
towards resilience and in-the-region-for-the-region
footprints drive the reorganization of structuresand processes

4

5th Annual Horváth CxO Priorities Study | 2024

Service industries
 Digital transformation remains the top priority forservice industries. This is particularly driven byadvancements in AI, which will play a crucial rolein both internal operations and customer
interactions
 However, nearly 50% of the surveyed companies
are still at the beginning of their AI adoption
process. Achieving the target state remains alonger endeavor The overall outlook on market development
ranges from conservative to slightly positive,
depending on the sub-industry
 Sustainability and people-driven topics both areexperiencing a decline in importance, due to aslightly eased situation on the labor market© Horváth01Management Summary

5th Annual Horváth CxO Priorities Study: General study information>770 global CxOs
in personal dialogue~40% CEOsHQs in 29 countries>550h

14 industries

out of all participants - otherc-levels also strongly represented

8 weeksof conversations between
March and May 2024

5 focus topics
Strategic priorities
Revenue & EBIT development
Trends & market positioning
Global value chains & workforce

personal discussion timewith top decision-makers

reporting on industry trends>30% family-owned

businesses shared their priorities

Cyber security & AI
5

5th Annual Horváth CxO Priorities Study | 2024

© Horváth01Management Summary

5th Annual Horváth CxO Priorities Study: General study statistics
Distribution of industries N = 771

Distribution of participants’ positions
11%

Automotive

14%

Banking & Financial Institutions

33%

6%

Building & Construction

8%

Consumer Goods

CEO

CFO

11%

7%

6%

5%

CIO

COO

CSO

Other

1%

DefenseDistribution of company size

5%

Energy9%Insurance

33%

7%Life Science & MedTech
4%

Metals & Mining

15%

MPEEA1
5%

Oil & Chemicals
2%

RetailTelecommunication

Other (Manufacturing)

4%
1%

Other (Services)

14%

11%

8%

1,001 5,000

5,001 10,000

10,001 20,000>20,000

18%

21%

18%

4%

5%

501 - 1,000

1,001 3,000

10,001 20,000>20,000

10%

11%

13%

≤250

251 - 500

501 - 1,000

Headcount in 2023

Distribution of revenue

2%

Transport, Travel & Logistics

5%

1 Mechanical, Plant, Electrical Engineering & Automation

639%

5th Annual Horváth CxO Priorities Study | 2024

12%
≤100
Revenue in MEUR

23%

101 - 500

3,001 10,000© HorváthHorváth CxO Priorities – Content

02

Strategic Priorities© Horváth02

Strategic Priorities

Across all industries digital transformation is the
top priority to ensure mid- and long-term growth
Rank

Rank

Score1

Score

Digital transformation

1

3

3.48

3.47

Improvement of cost & profit structures

2

4

3.42

3.28

Cyber security

3

2

3.41

3.48

People-driven topics

4

1

3.32

3.50

Sustainable improvement of liquidity range

5

6

3.09

3.04

Ecological sustainability orientation

6

5

3.07

3.28

Reorganization of structures & processes

7

10

3.04

2.86

Improvement of financial performance & risk management

8

9

2.91

2.87

Supply chain / production footprint adjustments

9

7

2.83

2.92

Realignment of pricing & revenue models

10

8

2.78

2.87

Realignment of group strategy & business model

11

11

2.77

2.81

M&A or divestments of business areas

12

13

2.52

2.42

Corporate diversity & inclusion

13

12

2.51

2.58

Strategic priorities | All industries

8

5th Annual Horváth CxO Priorities Study | 2024

(2024)(2023)

Rank increased

Rank decreased(2024)(2023)

Rank remains constant

Key findings
 The rise of AI has made digitaltransformation once again the top
priority for enhancing efficiency,
improving customer experiences anddriving new business models
 Meanwhile, industries are struggling
with cost and liquidity pressures frommoderate top-line developments andovercapacities combined with rising
raw material prices, high inventories
and supply chain disruptions
 The possibility to pass on priceincreases is limited due to thementioned overcapacities andintensified competition
 In response, businesses are revising
structural issues and focusing on
streamlining operations

N = 743
1 Importance of priorities on a scale of 1-4:
4-very important, 3-important, 2-slightly important, 1-not important© Horváth02

Strategic Priorities

Improving cost & profit structures is by far the
top priority for manufacturing industries
Rank

Rank

Score1

Score

Improvement of cost & profit structures

1

3

3.58

3.40

Cyber security

2

1

3.40

3.46

Digital transformation

3

5

3.38

3.31

People-driven topics

4

2

3.32

3.46

Sustainable improvement of liquidity range

5

6

3.24

3.25

Ecological sustainability orientation

6

4

3.18

3.32

Reorganization of structures & processes

7

9

3.14

2.94

Supply chain / production footprint adjustments

8

7

3.13

3.17

Improvement of financial performance & risk management

9

10

2.92

2.88

Realignment of group strategy & business model

10

11

2.86

2.83

Realignment of pricing & revenue models

11

8

2.81

2.96

M&A or divestments of business areas

12

13

2.69

2.52

Corporate diversity & inclusion

13

12

2.49

2.56

Strategic priorities | Manufacturing industries

9

Key findings

5th Annual Horváth CxO Priorities Study | 2024

(2024)(2023)

Rank increased

Rank decreased(2024)(2023)

Rank remains constant Economic conditions have madeimproving cost and profit structures
the top priority in manufacturingindustries
 In parallel, liquidity improvement also
gained importance due to highinventories and interest rates
 The long-term reconfiguration of value
chains towards resilience and in-theregion-for-the-region footprints drives
the reorganization of structures andprocesses
 In response to these developments,
companies are focusing on skill
development and redistributing
responsibilities to decentralize
decision-making

N = 420
1 Importance of priorities on a scale of 1-4:
4-very important, 3-important, 2-slightly important, 1-not important© Horváth02

Strategic Priorities

AI is driving digital transformation in service
industries both internally and customer-facing
Rank

Rank

Score1

Score

Digital transformation

1

1

3.62

3.69

Cyber security

2

3

3.42

3.51

People-driven topics

3

2

3.32

3.55

Improvement of cost & profit structures

4

5

3.18

3.12

Ecological sustainability orientation

5

4

2.93

3.22

Reorganization of structures & processes

6

8

2.91

2.76

Improvement of financial performance & risk management

7

6

2.89

2.85

Sustainable improvement of liquidity range

8

10

2.84

2.70

Realignment of pricing & revenue models

9

9

2.74

2.74

Realignment of group strategy & business model

10

7

2.65

2.78

Corporate diversity & inclusion

11

11

2.53

2.61

M&A or divestments of business areas

12

13

2.28

2.26

Supply chain / production footprint adjustments

13

12

2.24

2.32

Strategic priorities | Service industries

10

Key findings

5th Annual Horváth CxO Priorities Study | 2024

(2024)(2023)

Rank increased

Rank decreased(2024)(2023)

Rank remains constant Digital transformation remains the top
priority for service industries, driven
significantly by AI, reflecting its crucialrole in both internal operations andcustomer interactions
 Cyber security continues to capture
management attention, not only forthreat mitigation but also due toregulatory requirements, particularly infinance industries
 Skill development and employee
engagement are maintaining highimportance, even though the labormarket situation has slightly eased
 Sustainability has become more of abaseline requirement rather than acentral component of the businessmodel for many companies, leading to
a decline in its importanceN = 323
1 Importance of priorities on a scale of 1-4:
4-very important, 3-important, 2-slightly important, 1-not important© HorváthHorváth CxO Priorities – Content

03

Economic Key Topics© Horváth03

Financials & Market Positioning

Industries expect 2024 to be a transition year
after recent times of crisis

Key findings
 The outlook on revenue growth for2024 varies significantly acrossdifferent industries

Development of revenue / income, employees and EBIT1
Ø Revenue / income development
2024 compared to 2023

Ø Employee development
2024 compared to 2023

Ø EBIT development
2024 compared to 2023

N

0.3%P

76

Manufacturing industries
Automotive
Building & Construction

-1.6%

1.8%

0.8%

-0.1%

Consumer Goods
Defense

-0.4%P

0.3%

2.0%

7.2%

21.3%

Life Science & MedTech

5.2%

MPEEA2

3.9%

Metals & Mining
Oil & Chemicals

42
0.8%P
0.3%P

11

2.6%

2.3%P

1.1%

0.6%P

1.9%

-2.9%

51
108

0.2%P

25

0.3%

7.7%

55

3.2%P

35

Service industries
Banking & Financial Institutions
Energy5.9%

Insurance

4.5%

Retail2.8%

Telecommunication

3.1%

Transport, Travel & Logistics

4.5%… Other (Services)
12

1.3%

1.9%

6.5%

0.6%P
5.2%

-1.5%P

34

1.3%
0.6%

-0.5%

5th Annual Horváth CxO Priorities Study | 2024

2.8%P
0.1%P

3.0%
0.4%

105

 The Defense industry, for example,
stands out due to the current
geopolitical situation leading toincreased governmental spending inmilitary. In contrast, the Building &Construction industry continues tostruggle with a persistent lack ofdemand Despite a clear emphasis on
improving cost and profit structures,companies generally plan tomoderately increase their personnel.
The use of AI as a replacement forhuman workers is not yet visible

67
18

2.1%P

10

1.6%P

30

1.7%P

37

Estimated average of all companies within a specific industry,weighted by revenue
Mechanical, Plant, Electrical Engineering & Automation
Rounding differences may occur

1
2© Horváth03

Financials & Market Positioning

Revenue growth is primarily driven by volume
rather than price increases

Key findings

Share of volume- and price-driven revenue increase
Volume- / price-driven growth
Manufacturing industries

in 2024 for increasing revenue

N

Automotive

63%

37%

49

Building & Construction

62%

38%

27

73%

Consumer Goods

27%

90%

Defense64%

MPEEA1
Metals & Mining

10%

72%

Life Science & MedTech

46%

28%
36%
54%

71%

Oil & Chemicals

47

Comparison manufacturing vs. service
industries overall

33.5%

29%

 Growth in Defense industry is almost
exclusively volume-driven, reflecting
the substantial increases in demandof revenue growthis price-driven

11
24
86

66.5%

14

of revenue growthis volume-driven

15Service industries
Banking & Financial Institutions

61%

39%

49

Energy

58%

42%

18

Insurance

45%

55%

59%

41%

Telecommunication

59%

41%

… Other (Services)

67%
58%

44.3%

of revenue growthis price-driven

33%
42%

15
7
24
30

55.7%

of revenue growthis volume-driven
Volume13

 Companies in the Automotive industry
cannot easily pass on production costand raw material price increases,
making volume the key lever for
growth66

RetailTransport, Travel & Logistics

 Last year, pricing played a significant
role due to inflation, post-COVID
demand surge and supply chain
disruptions. This year's reduced focus
on pricing aligns with the gradualeconomic stabilization

5th Annual Horváth CxO Priorities Study | 2024

Mechanical, Plant, Electrical Engineering & Automation
Rounding differences may occur

1

Price

© Horváth03

Financials & Market Positioning

The time in board meetings is rather dedicated to
top-line than to bottom-line topics
Share of time spent in board discussions on top- and bottom-line improvement
Share of time dedicated in board
discussions

Manufacturing industries
Automotive

11%

Building & Construction

4%

Consumer Goods

10%

39%

16%

27%

24%

22%

22%

27%

Life Science & MedTech

4%

26%

MPEEA2

3%

28%

18%

Metals & Mining

7%

25%

18%

22%

Oil & Chemicals

11%

38%

7%

45%

Defense

23%

11%

22%

45
57

9%

11

15%

27

37%

14%

116

32%

18%

28

9%

23

22%

26%

Results between top-companies andother companies

80

22%
18%

44%

22%

N

Bottomline

Topline

39.7%

60.3%

Key findings
 Based on recent years, companies
have become skilled at cost
optimization. Now, the focus is shiftingback to steering mechanisms thatdrive top-line growth. However, theshort-term pressure for cost
optimization slows these efforts
 Companies with high revenue and
EBIT growth allocate a larger portionof their board meeting discussions to
top-line improvement

Top Companies1

Service industries
Banking & Financial Institutions

9% 17%

21%

Energy14% 11%22%

33%

Insurance

3%

Retail11%

Telecommunication
Transport, Travel & Logistics… Other (Services)22%

8% 18%

24%

12% 108
30%

30%

21%

16%

26%

19

33%

17%

25%

12

13%

38%

18%

30%

16%

16%
28%

50.0%

14

37

17%

26%

25%
13%

41%

5th Annual Horváth CxO Priorities Study | 2024

69

46.5%

53.5%
Other Companies

32>75% Bottom-line>50% Top-line

40>50% Bottom-line>75% Top-line

50% Top-line / Bottom-line

Top companies were selected based on a significantly positive
EBIT and revenue growth
Mechanical, Plant, Electrical Engineering & Automation
Rounding differences may occur

1
2© Horváth03

Financials & Market Positioning

Market penetration is the key top-line growth
driver, followed closely by offering new solutions
Levers for top-line / strategic growth | All industries
Acquiring of
new customers
via market penetration

Development of new
products / services
for existing customers

Entering new markets(applications & industries)
with existing products

Expansion of existing
business in
new regions

Score1: 3.22

Score1: 3.19

Score1: 2.34

Score1: 2.32

N = 646

N = 653

N = 613

4%

5%
15%
47%

20%

20%

N = 613

29%

21%

30%

48%

1

20%

22%

32%

28%

29%

2

29%

3

Key findings
 To drive top-line growth, the emphasis
is set on penetrating existing markets
and developing new products /services The latter is particularly relevant in the
Automotive industry, facilitating theadvancement of new electric vehicle
development and the further
enhancement of current generations ofcombustion and hybrid vehicles
 Expansion into new regions ormarkets is not a primary focus, either
because companies already have a
global presence or operate exclusively
on a national level, as observed in the
Banking and Financial Institutions,
Energy, Insurance and Retailindustries

4
Importance of priorities on a scale of 1-4:
4-very important, 3-important, 2-slightly important, 1-not important
Rounding differences may occur

1

Not important

15

5th Annual Horváth CxO Priorities Study | 2024

Slightly important

Important

Very important© Horváth03

Financials & Market Positioning

All possible levers for bottom-line optimization
should be considered

Key findings
 The limited difference between thescores of the overarching bottom-line
levers generally shows that all of themshould be considered

Levers for bottom-line / cost optimization | All industries
Reduction of direct
manufacturing costs(incl. energy)

Optimization via
reduction of
SG&A costs

Optimization via
reduction ofmaterial costs

Optimization of
product / service
portfolio

Score1: 2.93

Score1: 2.92

Score1: 2.92

Score1: 2.92

10%

8%

N = 537

N = 599

6%

14%
33%

39%

1

N = 637

31%

38%

28%

18%

30%

N = 568

 However, when examining
manufacturing and service industries
separately, a different picture emerges

23%

25%

32%

27%

38%

2

2

2

 Due to persistently high raw material
and energy prices, manufacturing
companies focus on reducing
production and material costs
 In contrast, service industries prioritize
optimizing product and service
portfolios and reducing SG&A
expenses. This can be achieved
through increased use of AI andconsolidating activities within Shared
Service Centers

Importance of priorities on a scale of 1-4:
4-very important, 3-important, 2-slightly important, 1-not important
Rounding differences may occur

1

Not important

16

5th Annual Horváth CxO Priorities Study | 2024

Slightly important

Important

Very important© Horváth03

Financials & Market Positioning

Customer centricity and operational excellence
are the main levers for competitivenessKey findings

Levers for competitiveness | All industries
Score1

N

3.50

680

Operational
excellence

3.44

681

3.14

677

3.11

667

1

61%

28%

1%
Customer centricity
9%

2

54%

36%

9%

3

40%

37%

20% 3% Speed & agility

4

41%

33%

23% 3%
Not important17

5th Annual Horváth CxO Priorities Study | 2024

Product / technology
leadership
Slightly important

Important Customer centricity is the pivotal lever
for enhancing competitiveness acrossall industries
 The traditional pillars of technologicalleadership and quality, which among
others once fueled Germany’s
success, no longer appear to be thecentral drivers. Instead, understanding
and addressing the locallydifferentiated needs of customers has
become increasingly important

Importance of priorities on a scale of 1-4:
4-very important, 3-important, 2-slightly important, 1-not important
Rounding differences may occur

1Very important© Horváth03

Financials & Market Positioning

The focus areas for speed improvements differ
between manufacturing and service industries

Key findings

Ambition level for processing time reduction
Research &Development

Supply Chain &Operations

Sales &
Distribution

SupportFunctionsN

Automotive

18%

13%

11%

12%

29

Building & Construction

10%

11%

9%

11%

23

Consumer Goods

14%

12%

11%

10%

30

Defense

23%

16%

9%

13%

4

Life Science & MedTech

18%

19%

14%

12%

13

MPEEA1

19%

16%

12%

12%

66

Metals & Mining

7%

13%

11%

6%

8

Oil & Chemicals

24%

16%

13%

21%

12

Average of manufacturing

17%

14%

12%

12%

185

8%

9%

12%

14%

9

Energy

9%

13%

15%

19%

11

Insurance

12%

11%

12%

13%

16

Retail

6%

16%

7%

9%

8

Telecommunication

23%

31%

18%

19%

4

Transport, Travel & Logistics

6%

20%

19%

7%

5

Average of service

10%

14%

13%

14%

53

Manufacturing industries

Service industries
Banking & FI

18

5th Annual Horváth CxO Priorities Study | 2024

 A general disparity is observed
between manufacturing and service
industries when talking about
ambitions to reduce processing times
 Manufacturing companies primarily
aim at accelerating their R&D
processes to introduce productinnovations faster. There is a need tocatch up with the “China speed” ofcompetitors Moreover, they strive to enhance
speed and agility in their supply chain
and operations to drive excellence andcustomer centricity
 In service industries, speed
improvement is focused primarily on
operations, sales and support
functions

Mechanical, Plant, Electrical Engineering & Automation
Rounding differences may occur

1© Horváth03

Global Value Chain & Workforce

Workforce primarily grows in North America,
Asia and Eastern Europe, but not in Germany
Reallocation of global workforce over the next five years1

Key findingsGermany is the only country wherecompanies plan a net reduction in jobs
over the next five yearsIndia is the growth leader – three outof four companies plan to increase
their workforce thereDespite widely announced decoupling
efforts, only 8% of companies plan toreduce personnel in China, primarily
because they cannot afford to forego
the Chinese market

One major management challenge inoperating globally is organizational
decentralization and thereby providing
room for regions to act moreautonomously

N = 286
1 Does not include Banking & Financial Institutions, Insurance,
Telecommunication and Energy industries
Rounding differences may occur

19

5th Annual Horváth CxO Priorities Study | 2024

© Horváth03

Global Value Chain & Workforce

61% of CAPEX investments made by German
companies are channeled into foreign markets
Distribution of CAPEX investments over the next five years1 | Headquarters in Germany

Key findings
 Although companies plan to invest
nearly 39% of their CAPEX volume
within Germany over the next five
years, this conversely means that 61%of their investments are directed
towards other global regions The investments made in Germany
are predominantly for maintenancepurposes The factories of the future are being
constructed in the growth regions
outside of Germany
 To establish transnational in-theregion-for-the-region structures,companies must reshape governanceand collaboration models between
headquarters and local subsidiaries

N = 162
1 Does not include Banking & Financial Institutions, Insurance,
Telecommunication and Energy industries; weighted by revenue
Rounding differences may occur

20

5th Annual Horváth CxO Priorities Study | 2024

© Horváth03Technology Trends

More than half of the companies will achieve
break-even on their AI investments until 2026

 The vast majority of the surveyedc-levels conclude that AI is a gamechanger set to bring significant
transformation and cannot be ignored

Break-even for AI Investments | All industries
100%
90%

Cumulated % of companies having achieved
break-even on investments in AI in the respective year The results show that current
investments in AI are paying off
quickly, with a rapid return on
investment

80%
70%
60%
100%

50%
40%

77%

30%

88%

34%
9%
2024

21

84%

 To ensure optimal investments,
companies need a clear AI strategy, astructured AI target operating modeland a well-defined framework fordetermining when and where to invest
to maximize effectiveness and value

59%

20%
10%

Key findings

2025

2026

2027

5th Annual Horváth CxO Priorities Study | 2024

2028

2029

2030+

N = 380© Horváth03Technology Trends

The majority of companies find themselves at theinitial stages of their AI journey
AI maturity level within the companies and their products or services | All industries

10.8%

47.3%

22.4%

13.6%

5.1%

0.8%

Key findings
 Even though the break-even point for
current AI investments can be reachedquickly, many companies consider
themselves to be at the early stages of
their AI implementation. Reaching thetarget state remains a long andchallenging endeavor There is often a deficiency infundamental elements for AI
implementation, such as the requisite
IT architecture Furthermore, it is crucial not only toembed AI in the organization, products
and services but also to cultivate thenecessary skills

Not started
22

Beginning

Scaledadoption

Structured
approach

5th Annual Horváth CxO Priorities Study | 2024

Implementation

Fully
integrated

N = 723
Rounding differences may occur© Horváth03Technology Trends

Cyber attacks continue to occur, yet many
companies have successfully defended them

Key findings Overall, companies have recorded ahigh number of cyber attacks over the
past 12 months

Proportion of companies affected by cyber attacks with significant impact
Manufacturing industries
Automotive
Building & Construction
Consumer Goods

13%
29%
6%
22%
25%
15%
64%

DefenseLife Science & MedTech
MPEEA1
Metal & Mining
Oil & Chemicals

22%
29%
20%
28%
36%
19%
14%
25%

Service industries

N
78

Banking & FI2

48

Energy59

Insurance

11

Retail27

Telecommunication

113

TTL3
…

28

Other (Services)

N

25%

106

29%
21%

38

25%
26%
56%
37%
33%
0%

68
19
12

10%
26%
15%
28%

34

 Particularly the Defense industry has
struggled with cyber attacks and theirconsequences
 However, the issue has become highly
prominent, enabling many companies
to successfully fend off the majority ofthese attacks
 Nevertheless, it is essential to develop
scenarios and strategies forcontingency planning, as cyber attacks
with significant impact cannot be
entirely ruled out, even with wellfunctioning countermeasures in place

39

21
1
2

Data from CxO Priorities Study 2024

23

5th Annual Horváth CxO Priorities Study | 2024

Data from CxO Priorities Study 2023

3

Mechanical, Plant, Electrical Engineering & Automation
Banking & Financial Institutions
Travel, Transport & Logistics© Horváth© HorváthAppendix

We asked CxOs which strategic initiatives need to be prioritized toensure steady mid- and long-term growth
Explanation of the different strategic priorities
Sustainable improvement of liquidity range

People-driven topics

E.g., working capital, financing structure, operating cash flow

E.g., shortage of skilled labor, new collaboration models, necessary / new competencies, leadership,
employee motivation, employee health, employer branding, flexible work

Improvement of cost & profit structures

Corporate diversity & inclusion

Reorganization of structures & processes

Supply chain / production footprint adjustments

Realignment of group strategy & business model

Realignment of pricing & revenue models

E.g., adjustment of overhead structures, SG&A, portfolio optimization, purchasing, break-even
optimization

E.g., centralization vs. decentralization, role of HQ, regions, functions and business units, sharedservices, span of control

E.g., sales and profitability targets, product / service portfolio, target customers, target markets,
internationalization strategy, ecosystems, digital business models

E.g., cultural diversity, women in the workplace / in leadership, gender equality, equal pay, wellbeing,social responsibility

E.g., dual- / multi-sourcing, regional sourcing, increased storage capacities, production footprint,
production network

E.g., positioning, pricing, subscription models, product / service bundling

Improvement of financial performance & risk management

M&A or divestments of business areas

Ecological sustainability orientation

Cyber security

E.g., steering concept, operative performance management, data integration, scenario modelling,
early warning systems, real-time reporting

E.g., climate neutrality / net zero, decarbonization, circular economy, sustainability strategy /measures / business models, anchoring in performance measurement, sustainability regulations

E.g., horizontal or vertical M&A transactions, strategic alliances, joint ventures, divest of businessareas and subsidiaries

E.g., building competencies, policies, industry’s role, efforts to improve cyber security, server location

Digital transformation

E.g., utilization of Gen AI technology, business models, products / services, customer interaction,
value chain, agile organization, data & algorithms, use of technology, ecosystem partners

25

5th Annual Horváth CxO Priorities Study | 2024

© HorváthAppendix

We differentiated between manufacturing and service industries
Sub-industries of the manufacturing and service industry clusters

Manufacturing industries

Service industries

Automotive

Banking & Financial Institutions

Building & Construction

EnergyConsumer Goods

Insurance

DefenseTelecommunication

Life Science & Medical Technology

Travel, Transport & Logistics

Mechanical, Plant, Electrical Engineering &Automation

RetailMetals & Mining
Oil & Chemicals

26

5th Annual Horváth CxO Priorities Study | 2024

N = 445

N = 326© Horváth