One-Third of Corporate Leaders List Cost Management as Their Most Critical Priority for 2025

• New BCG Survey Reveals Cost Management Remains Top Priority for Executives Around the World for Third Consecutive Year—up 8 Percentage Points from 2024
• Despite Years of Navigating Disruptions, 40% of Business Leaders Feel Unprepared for Market Shocks in 2025; Still, Many Express Optimism About the Growth Potential for Their Markets
• Following the US Election Outcome, 31% Have Launched Contingency Plans for Tariff and Regulatory Changes
• 86% of Executives Plan to Invest in AI and Advanced Analytics for Cost Reductions in Customer Service, Sales and Marketing, and Supply Chains this Year

BOSTON, Feb. 3, 2025 /PRNewswire/ -- Business leaders around the world are entering 2025 facing significant challenges and opportunities. Many are responding to policy shifts in the United States as economic and geopolitical uncertainty collides with the need for strategic investment. Nearly one-third of executives have already launched contingency plans to mitigate potential disruptions from expected tariff and regulatory changes. In the face of all of these factors, one-third of corporate leaders list cost management as their most critical priority in the year ahead.

These are among the findings of a new publication by Boston Consulting Group (BCG) titled, BCG's Guide to Cost and Growth: Strategic Insights for Navigating Economic Uncertainty. Based on results from BCG's third annual survey of C-suite executives from around the world (570+ respondents), the publication reveals that cost management remains a primary goal for more leaders, compared to other areas, for the third consecutive year across regions and industries, ranking ahead of growth/expansion and revenue management, and up eight percentage points over 2024.

The survey also reveals that—despite years of navigating major disruptions ranging from COVID to supply chain upheaval to the rise of AI—40% of corporate leaders feel unprepared for market shocks in 2025. Nevertheless, some leaders are expressing cautious optimism, searching for opportunities to innovate and grow, despite possible turbulence. Given recent inflation and rising interest rates, cost management will be central to this effort.

The survey respondents achieved only an average of 48% of their cost-saving targets in 2024, and most say their companies struggle to maintain cost efficiencies. Still, many of those surveyed plan to implement and sustain cost savings in 2025, recognizing that sustainable cost management is vital. In fact, BCG research shows that companies falling short of their cost targets tend to underperform on total shareholder returns by an average 9 percentage points, compared to the average total shareholder return (TSR) of peers that meet their targets.

Despite the challenging economic landscape, executives are still focused on growth and expansion for 2025, including innovation programs, with 70% believing they have enough visibility into the medium-term future to make informed investment decisions and 67% planning to reinvest savings from cost-reduction efforts in these areas. Others plan to use their savings to support strategic investments in areas such as talent advancement, sustainability, and operational excellence. And 86% plan to invest in AI and advanced analytics for cost reductions in customer service, sales and marketing, and supply chains.

According to the survey, the top five cost drivers executives are prioritizing in 2025, and the industries where each cost action is top of mind, are:

• Supply chain optimization (Consumer; Industrials)
• Product portfolio simplification (Insurance; Technology; Finance)
• Operating model and workforce productivity (Industrials; Healthcare)
• Customer service operations (Insurance; Finance)
• Sales and marketing (Consumer; Technology)

"We remain in a challenging and dynamic business landscape. As a result, we see executives prioritizing cost management, and there is no one-size-fits-all approach. It must be tailored to focus on areas that strengthen the company's competitive advantage," said Paul Goydan, a managing director and senior partner at BCG, and global lead for the firm's cost and efficiency offer. "In a complex and challenging environment, global executives are zeroing in on effective cost management as the primary tool for growing margins."

Download the publication here:
https://www.bcg.com/publications/2025/cost-efficiencies-remain-an-executive-priority-in-2025

Media Contact:
Eric Gregoire
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SOURCE Boston Consulting Group (BCG)