Consumer products 2010: Executing to lead in a world of extremes

Slowly but surely, market forces are leading to a global consumer marketplace that will look radically different in 2010 than it does today. Traditional mass market strategies will be eclipsed by unprecedented consumer diversity, market polarization and megaretailer dominance -- pushing the consumer products industry to a "world of extremes" with big winners and big losers. What will that future look like? What capabilities will consumer products companies need to remain relevant to demanding consumers and trade customers? How should firms organize themselves and begin preparing now? The fundamental challenge is the ability to execute with speed and agility to sustain market leadership in 2010's world of extremes.

IBM Business Consulting Services has identified five deep-seated trends that will redraw the rules of competition for consumer products companies by 2010:

• Consumer value drivers fragment. Consumers are fragmenting into microsegments as a result of pronounced shifts in demographics, attitudes and behaviors. Furthermore, they are "trading down" to low-cost commodity providers on one end and "trading up" to high-value, premium brands on the other.
  
  
• Gatekeepers become more guarded. Enabled by new technology and regulation, overwhelmed, time-strapped consumers are exerting greater control over their interactions with businesses, which in turn must devise ways of becoming more relevant to the consumer at the point of purchase.
  
  
• Information exposes all. Consumers are becoming incredibly empowered through access to information however, wherever and whenever they want it.
  
  
• Megaretailers break the boundaries. Global megaretailers are rapidly expanding across geographies, channel formats and product/service categories, dictating the terms of trade to suppliers.
  
  
• Partnering becomes pervasive. Competition is no longer a solo game. Leading companies are teaming with alliance partners to create integrated, collaborative "value networks" that offer a stronger, more competitive value proposition.

To read the complete study, download the PDF file at the top of the page.