Example of a company that has transcended traditional sector boundaries to diversify
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Indian organisations are entering new domains of growth – transcending traditional sector boundaries to meet fundamental human and business needs.
Value in
motion
Indian organisations are entering new domains of growth – transcending traditional sector boundaries to meet fundamental human and business needs.
Value in
motion
A playbook for enterprises to unlock new domains of growth
We are living through times that are changing from turbulent to tense to transformative. Global megatrends are converging – technological disruption, artificial intelligence in particular, and climate change are at the forefront, intersecting with fracturing geopolitics, aging societies, rising social inequality.
Amidst this evolving landscape, traditional sector boundaries are dissolving, industries are reconfiguring, businesses are boldly reimagining, and reinvention is the C-Suite’s compass guiding a new era of value creation.
This is redefining how we live, work and seize value in motion.
As a powerhouse of innovation, India will catalyse global economic momentum
- According to PwC’s 28th Annual Global CEO Survey, four out of ten CEOs in India have indicated that their companies have begun competing in at least one new sector or industry in the past five years. Among them, half say that 1-20% of their revenue has started coming in from the new sector or industry they have entered.
- Indian enterprises and startups – bolstered by a maturing innovation ecosystem – are transcending traditional industry boundaries and charting bold paths of related and unrelated diversification.
From entering new financial services and digital infrastructure to investing in advanced manufacturing, these moves reflect a growing appetite to transcend traditional sector boundaries.
- What’s next needed is a structured approach to help businesses identify better high-potential diversification opportunities and enable successful execution.
Our domain-based framework
As technologies blur industry lines and revolutionise how goods are produced and work is organised, companies face rising costs from physical climate risks and disruptions from geopolitical conflicts and social instability.
In response, they are actively diversifying into related or unrelated markets that offer the space and resilience to build future-ready commercially viable and sustainable models that can capture value in motion.
Value in Motion therefore refers to the value shifting – whether it’s financial or human capital, goods, services, intellectual property, or brand equity – as technological advancements, consumer behaviour, climate change, and other megatrends reconfigure industries and give rise to new markets.
We believe that such markets that exist at the confluence of fundamental human needs — how we eat, move, care, feed - amongst others, give birth to new domains of growth.
Domains of growth are value pools organised around an essential human need (e.g., food, mobility, healthcare) or aligned to a function or delivered by ecosystems and their associated value chains.
It’s a different way of looking at our industrial system, in which companies meet human needs by combining their own capabilities and engaging with ecosystem partners in new ways, leveraging synergies and identifying new growth areas.
Consider a leading precision farming innovator. Once limited to the ‘Feed’ domain through conventional agri-tech tools, it now operates at the intersection of ‘Connect and Compute’. By integrating drones, sensors, polymers, AI, machine vision, and data analytics with ecosystem partners, it can now accurately assess fruit ripeness and distinguish pests from harmless insects. These capabilities not only enhance agricultural outcomes, but also hold commercial potential across industries beyond food and farming.
Our domain-based framework
As technologies blur industry lines and revolutionise how goods are produced and work is organised, companies face rising costs from physical climate risks and disruptions from geopolitical conflicts and social instability.
In response, they are actively diversifying into related or unrelated markets that offer the space and resilience to build future-ready commercially viable and sustainable models that can capture value in motion.
Value in Motion therefore refers to the value shifting – whether it’s financial or human capital, goods, services, intellectual property, or brand equity – as technological advancements, consumer behaviour, climate change, and other megatrends reconfigure industries and give rise to new markets.
We believe that such markets that exist at the confluence of fundamental human needs – how we eat, move, care, feed – amongst others, give birth to new domains of growth.
Domains of growth are value pools organised around an essential human need (e.g., food, mobility, healthcare) or aligned to a function or delivered by ecosystems and their associated value chains.
It’s a different way of looking at our industrial system, in which companies meet human needs by combining their own capabilities and engaging with ecosystem partners in new ways, leveraging synergies and identifying new growth areas.
Consider a leading precision farming innovator. Once limited to the ‘Feed’ domain through conventional agri-tech tools, it now operates at the intersection of ‘Connect and Compute’. By integrating drones, sensors, polymers, AI, machine vision, and data analytics with ecosystem partners, it can now accurately assess fruit ripeness and distinguish pests from harmless insects. These capabilities not only enhance agricultural outcomes, but also hold commercial potential across industries beyond food and farming.
Domains of growth
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Our rigorous econometric analysis reveals that the India-specific domain-driven value pools will significantly enlarge in terms of the nominal gross value they would add over the period 2023-2035, thereby creating substantial opportunities for businesses to grow with them.
Over and above driving efficiency by leveraging digital technologies in their existing domains of value creation, Indian businesses need to simultaneously tap opportunities in other domains.
Established as a steel trading company in 1945
Transitioned to solar power generation, leveraging in-house engineering acumen
Reconfiguring itself into a leading renewable energy player
Glidepaths
Entering a new domain demands that companies diversify and embrace reinvention – both in their core businesses and operating models. The key question is: where should this reinvention focus? We outline three priority action areas:
When expanding into new domains, companies must have a robust understanding of the jobs they need to fulfill to meet consumer needs, rather than solely relying on consumer data. The customer value propositions created in these new domains must be aligned to the real economic, social and emotional experiences customers would want to create for themselves.
According to PwC research, leading companies are 1.6 times more likely than others to leverage these ecosystems, gaining advantages such as access to new customers and markets, privileged insights like data on customer needs, and complementary skills and capabilities. Establishing ecosystem collaboration is essential for delivering domain-relevant value; but that alone does not guarantee the creation of a profitable, domain-driven business - particularly in areas where the company lacks prior experience. To effectively explore these uncharted domains with ecosystem partners, companies must first define the specific role they intend to play within the ecosystem.
Designing, building, and testing an MVP is crucial for companies expanding into new domains or enhancing offerings in existing ones. This process helps organisations understand how to develop the necessary capabilities and talent pools to successfully scale with customer groups across different domains.
Guardrails
Turning to guardrails, these mechanisms are meant to help ensure that companies venturing into uncharted domains stay on course in their value creation journey.
- Build an intelligent foresight engine
- Bridge domain-relevant capability gaps at the level of humans and machines
- Remove barriers to enable domain-led reinvention
- Innovate your tax strategy to unlock domain-specific incentives
- Avoid new technology or financial debt that erodes profit
- Have a clearly articulated domain entry and exit strategy
Build an intelligent foresight engine
Deploying an intelligent foresight engine to guide domain entry and exit decisions has significant advantages.
By analysing vast amounts of data, such an engine can help companies make informed decisions. Moreover, having access to predictive insights can reduce uncertainty and help companies anticipate future market trends and opportunities.
Bridge domain-relevant capability gaps at the level of humans and machines
Companies entering new domains or exploring new value creation opportunities within existing domains often carry the burden of incumbent skills and machine capabilities. To develop MVPs and scale them successfully, they must bridge the existing capability gaps at the level of humans and machines at speed and build new capabilities simultaneously, leveraging digitial technologies including digital twins and AI.
Remove barriers to enable domain-led reinvention
In PwC’s 27th Annual Global CEO Survey, CEOs reported that 40% of the time spent on activities such as emails, meetings, and administrative processes is inefficient within their organisations. While many organisations focus on eliminating the sludge resulting from human inefficiencies, they often overlook the sludge created by machines. For instance, outdated software systems that are incompatible with newer technologies can lead to inefficiencies, increased downtime for troubleshooting, and challenges in integrating with other systems or platforms that the company may want to adopt to facilitate entry into new domains. Responsible use of AI can offer organisations several innovative ways to help cut down on sludge.
Innovate your tax strategy to unlock domain-specific incentives
Companies entering new domains must thoroughly research the available tax incentives, grants, subsidies and regulatory benefits specific to the domain they are entering. This may include tax credits for research and development, investments in certain technologies or even driving certain forms of collaborations.
Avoid new technology or financial debt that erodes profit
When entering new domains, effectively managing technology and financial debt is essential for sustaining profitability and enabling long-term growth. Companies need to rigorously assess their business needs and strategic objectives before committing to new technologies. Extending proven technologies from existing domains into new ones can offer both efficiency and continuity, while new investments must be aligned with clear ROI expectations and directly support the goals of domain expansion. Conducting detailed cost-benefit analyses factoring in both short- and long-term impacts on profitability and cash flow is critical.
Have a clearly articulated domain entry and exit strategy
Domain-driven value creation is, at its core, a collaborative ecosystem effort – bringing together stakeholders with diverse cultures, business practices, and decision-making styles. Trust is the glue that binds this diversity, empowering collective exploration and unlocking of new sources of value. To cultivate this trust, transparency is key. Stakeholders must clearly understand not only each other’s motivations for collaboration but also the potential friction points that could erode confidence.
To seize value for tomorrow, businesses need to act today
The process of business and operating model reinvention needs to start now, with a focus on priorities that respond to needs of diversification. This means putting a domain-based strategy into place that helps catalysing a set of innovation imperatives, securing competitive advantages in areas such as technology and trust, and turning obstacles such as climate threats into enablers of growth.
We will be happy to partner with you in this journey of value creation.
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