New data highlights how leaders in the finance, automotive, and consumer packaged goods sectors are readying themselves for a world of dramatic transformation

The IMD 2024 Future Readiness Indicator report, released today, ranks 88 of the world’s largest finance, automotive,and consumer packaged goods (CPG) companies in terms of resilience

• Mastercard, Visa, DBS, and JPMorgan Chase continue to stay ahead of their competitors through partnerships, acquisitions, and an increased focus on internal innovation.
• Tesla holds onto the lead in the electric vehicle auto ranking, but its uncontested leadership is being challenged on multiple fronts. Chinese titan BYD makes noteworthy progress as Chinese manufacturers’ progress signals a serious threat to established automakers.
• In consumer packaged goods, L’Oréal pulled ahead, and industry titans Coca-Cola, P&G,and Nestlé embrace technological innovation at an unprecedented scale to meet the demands of the modern consumer.

IMD’s Center for Future Readiness today released the first part of its annual ranking of the world’s top companies, proving just how important future readiness is for leaders in the finance, automotive, and consumer packaged goods (CPG) sectors.

“Future readiness is always a work in progress,” said Howard Yu, Director of the IMD Center for Future Readiness. “Dropping places in the Future Readiness Indicator does not mean that a company is not moving forward – but if it is not improving fast enough, then it risks being overtaken by its competitors.” The report assesses 88 major companies across the world, including many in the US, Asia, and Europe. The top-ranking organizations are prioritizing innovation to meet the growing expectations of today’s consumers.

Financial Services:

The ability to innovate and adapt is a key differentiator

The movement column has not been included in this table as the results would not reflect an accurate increase or decrease in ranking because additional companies have been added this year.

The financial services landscape is rapidly evolving, fueled by technological innovation, changing customer expectations, and a heightened focus on sustainability. As the pace of change accelerates, the ability to innovate and adapt will be a key differentiator.

In the latest Future Readiness Indicator, which compares 40 of the largest finance companies worldwide, the financial institutions that have embraced digitalization, embedded environmental, social, and governance (ESG) principles, and delivered seamless customer experiences have all maintained their lead despite a rapidly evolving financial services landscape.

Mastercard (100.0) and Visa (97.9), continued to demonstrate their dominance, taking the top two positions once again thanks to their adaptable business models, focus on digital payments, and investment in AI-powered services and products – ensuring their future readiness. 

Technological prowess is also key, with significant investment in digital transformation and cloud-native infrastructure giving DBS Group (86.5) and JPMorgan Chase (79.3) the agility needed to forge ahead. Both banks have developed in-house AI platforms to speed up model development and deployment, showing a commitment to staying ahead of the curve. HSBC (71.3), which climbed four places this year to sixth overall, has been investing in areas expected to drive growth, such as wealth management, and focusing on cost discipline, both of which have positioned the bank well for future growth and innovation.

Companies like Coinbase (64.2), Block (60.3), and PayPal (56.4) have continued to challenge traditional players by embracing emerging technologies to drive efficiency, enhance customer experiences, and open up new business models.

“The fintech startups and digital-only banks have forced the incumbents to innovate or risk being left behind,” observed Yu. “This has resulted in established players responding through partnerships, acquisitions, and an increased focus on internal innovation, which has seen the big players like Mastercard, Visa, JPMorgan Chase, DBS, and HSBC forge ahead by democratizing services that were previously the domain of the fintech world.”

New possibilities for collaboration are also being created by application programming interfaces (APIs), unbundling traditional financial services and enabling embedded finance where financial products are integrated into non-financial platforms. Meanwhile, the growing cyber threat landscape and tighter data privacy regulations mean financial institutions have been required to prioritize robust security frameworks and ethical data handling practices.

Automotive:

A competitive EV landscape is emerging – and Tesla’s dominance is no longer guaranteed

The IMD Future Readiness Indicator automotive data suggests a positive trend in the future readiness of electric vehicle (EV) companies. Almost all of the 24 automotive companies surveyed showed an increase in their future readiness score from 2023 to 2024. Front-runner Tesla maintained its hold on the top spot, scoring 100.0 in both 2023 and 2024, but its once-uncontested leadership is now being challenged on multiple fronts.

Chinese EV titan BYD (78.20), showed the most significant improvement in 2024. In Q3 2023, BYD’s EV sales surpassed Tesla’s sales for the first time; while Tesla fought back and regained the EV sales lead in Q1 2024, its dominance is no longer guaranteed. BYD is making significant strides in areas measured by the IMD Future Readiness Indicator, indicating that it may emerge as a stronger competitor to Tesla in the future.

Other Chinese automakers, including Geely (42.34), Nio (31.30), and Li Auto (64.37), all command a significant price advantage over Western competitors. This cost competitiveness, coupled with aggressive innovation, indicates that Chinese manufacturers will own one-third of the global EV car market by 2030 – signaling a serious threat to established European automakers.

The data also indicates a tightening gap between the top and middle tiers of the leaderboard. Several companies experienced a significant increase in their scores in 2024, including Ford Motor Company (70.32), Hyundai Motor Group (72.32), and Stellantis (72.37). This trend indicates that these companies are implementing strategies that are bringing them closer to the leaders in the EV industry. 

While most companies showed improvement in their scores, some companies towards the bottom of the table saw their scores decrease. This could indicate a need for these companies to invest more in research and development, brand building, and sustainability efforts to improve their future readiness. 

The increasing closeness of the automotive future-readiness scores suggests a more competitive landscape for EV companies is emerging. Investments in battery technology, artificial intelligence (AI), connected cars, and semiconductors are driving the EV revolution. The market is in a state of flux, and while Tesla may have ignited the EV revolution, the playing field is leveling out and a period of consolidation is expected. 

“As industry followers rapidly catch up, it is undeniable that the era of Tesla’s uncontested dominance has ended. Its advanced investments in software and AI mean that it may be able to maintain its lead for now, but competition is intensifying on this front too,” says Yu.

“The data shows that companies need to maintain their pace of innovation to keep up. For example, Toyota, which once held the second position, has dropped to position 10 as they failed to keep pace with the Chinese automakers. Tesla’s future success will depend on more than pricing; it will need to maintain a technological edge over its competitors and deliver on its bold AI promises.”

Consumer Packaged Goods:

A clear correlation between a company’s innovation focus and its success

L’Oréal (100.00) provides a shining example of how established giants can face up to a dramatic shift in the CPG industry. Surging to the forefront, it earned a perfect score in the IMD CPG Future Readiness Indicator 2024 by embracing technological innovation to meet the demands of the modern consumer. It’s in close competition with other industry titans like Coca-Cola (90.68) and P&G (80.40), which also have long dominated the industry.

“This underscores a powerful trend: there’s a clear correlation between a company’s innovation focus and its success,” said Yu.

Other companies like Nestlé (78.01) and Diageo (71.03), which also prioritize technology, are outperforming those lagging in innovation, such as Keurig Dr Pepper (12.12) and General Mills (19.94).

“L’Oréal has taken the lead in the CPG industry by embracing AI, omnichannel, partnership, and social listening at a scale that we’ve never seen in the CPG world before,” observed Yu. “Today, L’Oréal is effectively a tech company selling lipstick.”

L’Oréal’s focus on personalized experiences and tech integration have proven key to its success. The company’s acquisition of ModiFace has given it an edge in AR-driven virtual try-on and its AI-driven product recommendations have solidified its leadership in personalized engagement.

Other factors that are driving change in the CPG sector include premiumization – an area in which Diageo excels, particularly in its ready-to-drink category. Portfolio diversification is also important, as seen with Coca-Cola’s exploration of new packaging and products.

Sustainability, purpose, and supply chain resilience are areas of growing importance, evidenced by the ambitious sustainability goals set by leaders like Coca-Cola and Diageo.

The skincare industry is booming, with brands like CeraVe (owned by L’Oréal) dominating sales. As growth surges in Asia Pacific and other regions, a strong global brand presence is crucial for success.

P&G and Coca-Cola are pushing boundaries by blending their in-store retail presence with their digital media networks, leveraging first-party shopper data to deliver highly targeted, personalized advertising to consumers across the digital landscape. Leaders in this sector also focus on attracting and developing talent while building innovative, inclusive cultures to foster agility in the rapidly evolving business landscape.

To thrive, companies must prioritize technological innovation, cater to the personalized experiences consumers crave, and remain adaptable, the report concludes.

Research Methodology

To measure the future readiness of organizations, especially in the dynamic financial sector, IMD employs a comprehensive, 360-degree assessment approach. This method is designed to evaluate a broad spectrum of factors that contribute to a company’s ability to thrive in the face of future challenges and opportunities.

Financial performance

Current financial health: We start by assessing the immediate financial health of the company. This includes examining profit margins, revenue streams, and cost management. A strong current financial performance is crucial as it provides the necessary capital for future investments and risk-taking.

Cash flow and debt management: We analyze the company’s cash flow to ensure there is sufficient liquidity for ongoing operations and future growth initiatives. Debt levels are also scrutinized to assess financial stability and risk management capabilities.

Investment in growth and innovation

Intensity of investment: We look at how much the company invests in research and development, startups, or new business ventures. This indicates the organization’s commitment to innovation and its ability to seize future growth opportunities.

New product rollouts: The frequency and success of new product launches provide insights into the company’s innovative capacity and its responsiveness to market demands.

Leadership and organizational culture

Diversity in leadership: A diverse management team brings varied perspectives, which is critical for innovative problem-solving and effective global strategy development. We assess diversity in terms of gender, nationality, and professional background.

Executive behaviors: The behavior and mindset of the company’s leadership are key indicators of future readiness. We look for leaders who demonstrate unconventional thinking and the ability to drive and embrace change within the organization.

Operational efficiency

Productivity measures: We evaluate operational efficiency through metrics such as revenue per employee. This helps gauge how effectively the company utilizes its human resources and whether it can scale operations without proportional increases in headcount.

Market position and competitive dynamics

Investor expectations: Market perceptions and investor confidence often reflect the company’s prospects. We analyze investor expectations based on stock performance, market analyses, and investor communications.

Competitive positioning: Understanding where a company stands in relation to its competitors helps identify its strengths and areas for improvement. This includes market share analysis, brand reputation, and technological edge over competitors.

The logic behind the assessment

The logic of this multifaceted approach is rooted in the belief that future readiness is not solely about capacity or potential but about actual preparedness across various dimensions that are critical for long-term success. By assessing both tangible financial metrics and intangible factors like leadership quality and innovation, we can provide a holistic view of an organization’s readiness to face future challenges.

Read more about the methodology here.