For most business leaders, the best thing about 2009 is that it ended. With cash hard to come by and investors baying for boardroom blood and profits, more ambitious corporate strategies were mothballed in favour of just staying in the game. But for some chief executives, the time has been spent considering how to improve their positions in the long-term and analysts are confident that 2010 will herald some bold business strategies. Below are the 12 key people that are rumoured to shake up their sectors and financial markets in the coming year. See if you agree with our list.
1 Rupert Murdoch, CEO, chairman and founder, News Corporation
Needing little biographical introduction, Rupert Murdoch has demonstrated shrewd commercial acumen on his way to assembling an empire that includes media properties such as 20th Century Fox, BSkyB, The Wall St Journal, The Times and The New York Post. Yet, Murdoch has been unable to turn his financial nous to the internet. For well over a decade Murdoch has publicly stated that he has not rushed to invest in the web as a marketing tool, complaining that he has no sense of how to realistically turn a sustainable profit from it, or stop people and other businesses from ripping off the content that his media outlets generate. That may be about to change, though analysts are sceptical. This year, Murdoch is attempting to move away from a dependence on advertising towards an online business model reliant on content charging, though he is coming up against the same brick wall as other publishers – how do you persuade people to pay for something they are used to getting for free? The answer may be to act as aggressively as possible. This January, News International changed its search engine settings to stop NewsNow.co.uk from linking to Times Online content. News International has told the aggregator that it may no longer link to any content on Times Online, and imposed a technical block by altering its robots.txt, the file through which a website can ask search engines not to index its pages. Another online cuttings service, Meltwater, is currently taking the Newspaper Licensing Agency (NLA) to a copyright tribunal over whether or not newspapers can control the use of their links.
2 Irene Rosenfeld, CEO Kraft Foods Inc
This one has just sneaked in given the interest in the recent deal she has managed to pull off (on paper, at least). Irene Rosenfeld has staked her legacy at Northfield-based Kraft on a £11.5bn purchase price for Cadbury. Kraft believes that the British confectionary giant will be a welcome addition, juicing sales growth and giving it a bigger international footprint. But Rosenfeld’s Cadbury play is fraught with risk – when big deals go bad, they become big failures. And not all of Kraft’s shareholders are on side with the strategy. The company’s largest shareholder with a 9.4 percent stake, billionaire investor Warren Buffett, has come out against the takeover, telling reporters that: “I’ve got a lot of doubts about the deal…If I had the chance to vote on this, I’d vote no.” Before the Cadbury deal was agreed he had urged Kraft not to overpay for the UK firm. He also said he questioned Kraft’s decision to sell its North American pizza business for $3.7bn to help raise the funds to pay for the Cadbury deal. “I feel poorer,” said Buffett. Analysts will be monitoring the share price carefully to see if they will be poorer by the end of the year.
3 Marc Bolland, CEO, Marks & Spencer
The UK’s major retailers have had a hard time of it over the past couple of years, and the store that is held up as being the bellweather of the UK’s high streets is still Marks & Spencer. Its current chief executive Sir Stuart Rose steps down in January to make way for Marc Bolland, who cut his teeth flogging beer for Dutch brewery giant Heineken and then made the move into supermarkets by heading up Morrisons. Bolland already has a lot to live up to. The business press have dubbed him “The £720m man” since news of his departure from Morrisons saw £380m sliced off the company’s value, while news of his appointment at M&S added £340m, which means that the large institutional investors like the appointment. While Bolland has no experience selling clothes, it is his experience of international sales and marketing with Heineken that the company is pinning its hopes on as M&S looks to take its quintessential Englishness to the middle-classes of the BRIC countries of Brazil, Russia, India and China.
4 Daniel Vasella, CEO and chairman, Novartis
Daniel Vasella, CEO and chairman of pharmaceutical giant Novartis, is combining an aggressive merger strategy while also trying to ensure that long-term research objectives are kept as separate as possible from the company’s bottom line. To do this, he has created an open channel between himself and the company’s head of research. Like the rest of the pharmaceutical and healthcare sector, Novartis is gearing up to take advantage of healthcare reform in the US, but also in the emerging economies such as China and India. In late 2009, Novartis agreed to acquire an 85 percent stake in a Zhejiang-based private vaccine producer. But analysts expect Big Pharma to clean up in the aftermath and snap up smaller rivals. Yet large acquisitions are also on the radar. On January 4, Novartis agreed to take full control of eyecare company Alcon in a deal worth nearly $40bn. Novartis will spend $28.1bn on raising its stake in the company to 77 percent, up from the 25 percent stake it bought from Nestle in 2008. It then plans to spend a further $11.2bn on buying the remaining 23 percent stake it does not own. The acquisition is expected to help Novartis diversify its business away from prescription drugs and it is hoped that the two companies will be able to combine research and development operations, potentially saving them $200m over three years.
5 Martin Winterkorn, CEO and chairman, Volkswagen
Hold the press – Volkswagen is a car manufacturer that turns a profit. However, there’s still time for that to change as the company’s CEO Martin Winterkorn looks to be heading for a frantic 2010. Last year, Volkswagen successfully completed a reverse takeover with long-time suitor Porsche, and this year will be spent on trying to integrate the two companies. On top of that, the company wants to break into emerging markets, notably Russia and China. The company also intends to announce the roll-out of its electric car that promises zero emissions, called the E-Up!, billed to be the “Beetle of the 21st century”. A hard act to follow – can Winterkorn pull it off?
6 Peter Voser, CEO, Shell
It is a brave company that decides to switch its production to such an extent that it will take up half of its new business. While Royal Dutch Shell is primarily an oil and petrol business, by 2012 half the company’s production will be natural gas. Shell still wants to tap the world’s oil reserves, but the company’s CEO Peter Voser has seen the future and, for the mid-term at least, it is natural gas-fired power plants. On average, these plants emit half the carbon dioxide of a coal-burning plant to produce the same amount of electricity. Furthermore, the ability to power up and down gas-fired power stations relatively quickly makes them ideal partners for Shell’s renewable energy investments such as wind farms and solar panels.
But, at the time of writing, 2010 has not been kind to Shell. Rival oil major BP overtook Royal Dutch Shell in market capitalisation for the first time in more than three years, reflecting the contrasting fortunes of the two rivals for the title of Europe’s biggest oil company. In the past year, BP has benefited from rising production, cost cuts and success finding oil in the Gulf of Mexico, while Shell has been burdened by heavy capital spending and seven consecutive years of falling oil and gas output.
Added to that, the company has come under attack from a hoard of investors demanding greater clarification surrounding its investment in Canada’s controversial tar sands. The Anglo-Dutch group has been called upon to include a special review of the risks associated with its Alberta oil sands operations in its upcoming May annual general meeting, after mounting pressure from a coalition of investors. The FTSE 100 major will face a barrage of questions regarding environmental and human rights problems, and will be asked to justify the financial wisdom behind the investment. At present, tar sands account for less than 2.5 percent of the group’s total oil and gas production but have proved a costly investment. Last year Voser was forced to defend his tar sands investment after it was revealed that they lost the company $42m within the first three months of the year. Voser may have his work cut out.
7 Indra Nooyi, CEO and chairman, PepsiCo
One of the few women to head up a Fortune Global 500 company, Indra Nooyi has made a big impression since her appointment as PepsiCo CEO in 2006. Having led internal restructuring and reshaping of the management team, Nooyi was instrumental in shifting direction towards healthier products and cutting procurement costs. Cost control and tight market focus are likely to figure highly. Last summer, PepsiCo announced it was buying the rest of the stock in its two US bottlers that it didn’t already own for $7.8bn. While it was a lot of money, the benefits to its distribution system in the US will be numerous. First off, the acquisition eliminates the duplication that exists because Pepsi distributes Gatorade into the same places as the bottlers do with soda pop. Now the bottlers can take over this job. Second, in the past, if Pepsi wanted to buy a smaller regional player, it was effectively competing with itself on price. This made no sense. This deal eliminates the conflict. Finally, corporate functions that each bottler handled previously are now done from the head office. This promotes greater efficiencies and lower costs, generating bigger profits. Analysts see Pepsi doing well in 2010, especially in the US, where streamlined operations will make a difference.
8 Lloyd Blankfein, CEO and chairman, Goldman Sachs
Any head of a bank that can post a profit instead of a loss in the worst financial crisis in history evidently deserves a mention. Goldman Sachs, led by CEO Lloyd Blankfein, switched from investment banking to a more traditional bank holding company that can take deposits, evading major losses in the process and posting a record $3.44bn second quarter 2009 profit and $3.19bn in the third quarter. Some analysts believe that Blankfein’s success is down to a more prudent approach to risk management than some of his competitors, but not many have dared write off the strategy.
However, public relations may not be Blankfein’s strong point. Despite the furore over bankers’ bonuses and remuneration policies, Goldman Sachs’ bankers are forecast to enjoy an 81 percent rise in their pay and bonuses for 2009. Goldman’s top executives have already tried to respond to public anger over pay by promising to take their bonuses in shares rather than cash and are also forcing their best-paid employees to make charity donations. The bank has traditionally reserved 45 percent of its revenues to pay staff. But analysts note the reductions being expected in the bonus pool in the fourth quarter of the year still give Goldman a competitive advantage in hiring staff: average pay levels remain relatively high.
9 Mark Zukerberg, CEO and founder, Facebook
Last year, social networking phenomenon Facebook hit the 350-million user mark. But the main problem for Mark Zukerberg, like Murdoch, is turning that audience into money. Its vehicle to revenue seems to be highly targeted and personalised advertising. Zukerberg is already doing that with a final revenue number of $550m for 2009. But in terms of hard currency, that’s not very much, given the site’s popularity. Users, analysts and IT experts have also criticised how Facebook appears to be flippant about how it handles user data. Furthermore, the growth in popularity of Twitter may be a potential threat.
10 Karl-Johan Persson, CEO, Hennes & Mauritz (H&M)
The new, 34-year-old chief executive of fast-fashion giant H&M is planning an aggressive expansion into new markets, new products and online in 2010 and, so far, the economic downturn has not dampened his spirits or the company’s underlying financials. The $14.5bn company will debut a 30,000-sq.-ft. Paris flagship this year as it continues to focus on Europe, North America, Japan and China, while also tapping into new markets like South Korea and Israel. Following in the footsteps of his grandfather who founded the chain in 1947 and his father who acted as CEO between 1982 and 1988, Persson is committed to the core brand and has made it clear that H&M’s namesake brand is essential to its success. But this does not mean that he is not open to new ideas, or new brand names. He was instrumental in H&M’s move into home furnishings and the launch of its more upscale COS chain. Analysts will be keeping a close eye as to how these ventures pan out over the year.
11 Steve Jobs, CEO and co-founder, Apple
Although a bad year for the majority of the corporate world, 2009 turned out well for Steve Jobs and California-based Apple. After a six-month leave of absence, during which he had a liver transplant, Jobs returned to the helm of the company he co-founded as it defied global economic trends by increasing its sales. Inspired by Job’s product and design vision, the company has shifted over 30 million iPhones and announced record breaking profits in October. Rumours are rife that Apple intends to launch a range of products early in the year. The company is famous for its secrecy regarding new products and upgrades, but that does not stop the masses from at least attempting to predict what the company may or may not do over the next 12 months and beyond – to varying degrees of success. One word that is certainly doing the rounds at the moment is “iPad”, a mobile tablet browsing device that is a cross between the iPhone and a MacBook laptop.
12 Microsoft CEO Steve Ballmer
Microsoft’s dome-headed CEO may not be one to watch in 2010, but one to take bets on whether he will remain in post by 2011, given a recent run of bad press. Influential US magazine Newsweek seems to think that his run as CEO is soon to draw to a close. In its Tech Predictions for 2010, number nine is Ballmer being pushed out in favour of another show-runner. “If Microsoft were any other company,” the magazine wrote, “this guy would be in trouble. But the catch is, Ballmer was put into the job by Microsoft founder Bill Gates, and the two have been pals since their undergraduate days at Harvard. If Gates wants to get rid of Ballmer, he’ll have to craft some kind of graceful exit that lets his buddy save face.”
But 2010 seems to have gone well for Microsoft. Its roll-out of Windows 7 went off better than most expected, with one report estimating that US sales of Windows 7 boxed software were 234 percent higher than sales of Vista. Meanwhile, statistics company Net Applications suggested that Windows 7 had gained over four percent of the operating system within a few months of its launch, putting it on track to outpace Vista’s rate of adoption.
However, it hasn’t all been so good. Microsoft has been flailing in the smartphone operating system market, with its hopes pinned on next year’s Windows Mobile 7. Its mobile application storefront, Marketplace, lags behind its competitors in the number of apps on offer, and Google Android seems to be swallowing up more and more consumer mindshare by the day. Microsoft has been making gains in the search-engine space with Bing, which nonetheless occupies just under 10 percent of that particular market. Experts say that time, and the partnership deal with Yahoo, will ultimately determine whether Bing can be a truly effective challenger to Google, which continues to handily dominate search. Analysts have suggested that, even with the forces of Microsoft and Yahoo combined, it may not be quite enough to present Google with a survival threat at this stage in the game. If you put these issues squarely on Ballmer’s shoulders – and he is CEO, which means the buck stops with him – then one could make an argument for his dismissal. Critics argue that Ballmer seems to catch onto trends too late, directing Microsoft to follow them only after another company has established a working model. For example, the Zune HD is a great product, but following on the heels of the iPod Touch basically doomed it to (at least so far) a relatively tiny market share.
