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Business Today - Dec 2022 - Jan 2023 issue

In our first issue of 2023, BT looks at the year’s upcoming economic challenges, possible implications of the CBE’s withdrawal of the letters of credit system, boosting exports, and Jazeera Paint’s aim to revolutionize Egypt’s paint industry

In our first issue of 2023, BT looks at the year’s upcoming economic challenges, possible implications of the CBE’s withdrawal of the letters of credit system, boosting exports, and Jazeera Paint’s aim to revolutionize Egypt’s paint industry

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In-Depth

However, innovation is not confined to the

tech realm. Companies and corporations are

capable of, and should be, reinventing themselves

and cultivating innovation to capitalize

on the opportunities and learnings afforded

by these disruptions and launch new offerings

in pace with innovative startups.

New business is good for business

Recently, McKinsey & Company surveyed

more than 1,000 senior executives from every

region and a wide range of sectors, with its results,

unsurprisingly, suggesting that companies

that prioritize new business-building are

above others in terms of revenue growth.

According to the report, eight out of ten

stated that new business-building was a top-five

strategic priority; 46% said it was in their top

three. By 2027, the respondents said they expect

29% of revenue will come from new business,

which was defined as the creation of new

revenues through new products, services, or

businesses based on new capabilities.

The businesses that placed new businessbuilding

as their top-three priority showed accelerated

growth and higher resilience, even

during economic shocks; those surveyed estimated

that new business created in the past

five years accounted for 12% of their revenues

and 21% of their enterprise value.

The management firm revealed that, on average,

respondents have begun to invest 5% of

revenues into new business-building and are

establishing 1.5 new businesses annually.

A separate McKinsey & Company report

published in fall 2022, which conducted an

in-depth study of the growth patterns and performance

of the world’s 5,000 largest public

companies over the past 15 years, reaffirmed

revenue growth’s critical role in driving corporate

performance. An additional five percentage

points of annual revenue correlates with

an extra three to four percentage points of total

shareholder returns (TSR)—the equivalent

of increasing market capitalization by 33-45%

over a decade.

www.BusinessTodayEgypt.com January 2023

47

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