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In today's dynamic business environment, CEOs and CFOs face constant challenges. PwC Germany and Strategy& are here to help with a unique suite of services in performance and restructuring. Our combined expertise provides comprehensive guidance and support to executives, regardless of where they are on their growth journey. Strategy& excels in strategic realignment and operational restructuring, while PwC is a leader in financial restructuring. Together, we can help you successfully address acute financial issues, maintain flexibility and build resilience during difficult times.
We combine strategic and financial proficiency to empower companies undergoing transformation and drive lasting value. Our shared goal is to improve your company's performance through precise analysis and measurable outcomes, while establishing the groundwork for future success and a sustainable business model. Our strength lies in the seamless integration of strategy, execution, and financing expertise for the transformation, ensuring long-term competitive advantages while fostering stability and trust among stakeholders.
Automotive
Declining sales, product recalls, strikes, and job cuts continue to dominate headlines about the German automotive sector. Once admired worldwide, this industry now faces significant challenges. While premium vehicles "made in Germany" remain status symbols, the global car market has evolved, with Chinese and U.S. manufacturers rapidly gaining ground.
Several key shortcomings have become increasingly apparent in recent years: quality issues stemming from cost-cutting measures, a lack of innovative products, and an unclear strategy for electromobility. A real shift is necessary to restore Germany's competitiveness. With that in mind, German OEMs and suppliers must adopt more flexible planning, drive targeted innovation, and embrace riskier investments. Forming new partnerships is also essential to achieving profitability with electric vehicles and addressing financing needs.
Consumer goods and retail
In the consumer goods and retail sector, companies are still experiencing rapid transformation due to geopolitical uncertainties, supply chain disruptions, and cost pressures, alongside shifting consumer behaviors. Digital channels are increasingly influencing people’s shopping and brand experiences. Additionally, the industry must prepare for a new wave of consumers. By 2030, a generational shift will occur as Generation Z, the digital natives, replaces the baby boomers, placing significant emphasis on sustainability and innovative technologies.
Consumer goods manufacturers and retailers must address these challenges by developing adaptable business models that balance customer focus with cost efficiency. New strategies are essential for future success: prioritizing customer-centric approaches with personalized shopping experiences - both online and offline, achieving cost efficiency through new revenue streams and optimized processes, implementing seamless omnichannel strategies with a flexible supply chain, adhering to sustainability standards, and investing in innovative technologies.
Energy and utilities
The energy and utilities sector has been under immense pressure due to the increase in volatile energy and commodity costs driven by geopolitical conflicts and high inflation. In fact, Europe and Germany continue to face some of the highest electricity and gas prices in the world. Companies are grappling with these rising costs as well as others, material shortages, and declining demand, leading to reduced production. Beyond economic challenges, employment gaps and weak competitiveness also highlight underlying structural issues.
As a result, an increasing number of companies are considering scaling back production even more or relocating their operations abroad. For large enterprises, consistently prioritizing operational excellence and optimizing the use of existing facilities will continue to be crucial. Additionally, strategically leveraging the organization’s product portfolio and international locations can help mitigate domestic economic fluctuations. Active energy management and strategic partnerships are key to enhancing resilience against volatile energy and commodity prices.
Industrial goods
The competitive position of Germany's industry goods sector within the EU and global markets is in a severe crisis, with recovery occurring at a below-average rate following economic downturns. Even substantial investments in digitalization and automation have not boosted productivity, and profits remain insufficient to fund innovation and transformation.
A key reason for the decline in innovative capacity is that patent applications, especially in critical fields like mechanical engineering, are decreasing. Meanwhile, competition from China is intensifying, particularly in semiconductor patents. Additionally, there is a lack of agility, especially among larger players.
Without fundamental changes, significant revenue declines are projected over the next decade. To address these challenges, CEOs need to explore new strategies with a flexible, agile approach, rather than a step-by-step planning process. Accelerating innovation, managing transformative portfolios, shortening innovation cycles, and timely restructuring are essential factors for success.
Learn more about our strategic approach to business transformation in this brief summary of the entire book.
Daniel Steiner
Partner, Co-Lead Performance & Restructuring, Automotive & Industrials, PwC Germany