Consumer products companies have recently sought to attain profitable growth by extending business scale and scope while simultaneously rationalizing operations. Although each sector—durables, consumables, apparel, specialty goods, etc.—has faced its own unique issues, there are some common challenges for consumer business leaders.

Across consumer markets, growth has become a greater challenge; increases in wealth, growth in population, and opening of new markets has already played out for many. Competition among companies, brands, products, and marketing messages has become even more intense, limiting pricing power, raising promotion budgets, and decreasing the time before “me too” products appear. Consumers’ attitudes, needs, and shopping behaviors are increasingly diverse, forcing a fundamental reconsideration of product management, communications, and marketing investments. Retail consolidation, along with the rise of such new channels as mass merchants, discounters, and warehouse clubs, has complicated supplier partnerships and the role of the sales force.

As a consequence, several capabilities are increasing in importance. Channel management, from the perspectives of both product supply and sales, has become a more critical part of the strategic agenda. Innovation continues to be the top management priority as companies strive to create new products and brands, or at least news. Deal making and integration skills remain important as companies push consolidation and globalization to the next level. Most companies have contended with a consolidating customer base by rationalizing brand portfolios and leveraging marketing investments better. Sophisticated technology and systems investments are being deployed to deliver step-change improvements in effectiveness. In addition, the Internet is firmly established as part of the shopping cycle, if not for purchase, then for information gathering and price research. Finally, new questions are being raised about the right operating model and supply footprint as companies explore ways to raise profitability.