- Cost optimization ranks as the number one management priority, followed by digital transformation and AI as key levers for efficiency
- In the manufacturing sector, innovation and R&D, as well as production footprint optimization are gaining importance
- Sustainability drops six spots in the ranking – yet most companies remain committed to their net-zero targets
Annually, the management consultancy Horváth surveys hundreds of C-level executives from major international corporations to identify the most pressing strategic priorities on their agendas. This year, more than 1,000 board members and managing directors from manufacturing and service companies across 15 sectors and 33 countries shared their insights. In addition to their top strategic priorities, the executives provided exclusive perspectives on revenue trends, location and workforce strategies, AI ambitions and investments, and more through in-depth interviews.
Cost Optimization and Profitability Lead the Strategic Agenda
Compared to last year, the ranking of priorities has shifted significantly. “Cost and profitability optimization” now leads the list of management priorities, after the topic had already climbed from fourth to second place between 2023 and 2024. Digital transformation – including the use of AI – follows in second place, while cybersecurity ranks third.
Industry Doubles Down on Innovation
Among manufacturing companies, “R&D and innovation” ranks third – and for good reason. “Excellence in core business is the strategic focus for manufacturers. This includes sharpening and enhancing product portfolios to meet customer needs while generating long-term value,” says Ralf Sauter, Study Lead and Partner at Horváth.
AI and Global Footprint Shifts Reshape Workforce Strategy
Strategic workforce topics – including talent availability, skills development, and leadership culture – rank fourth overall. While the talent shortage has eased somewhat, global footprint strategies and the rapid rise of AI are introducing new challenges. Among manufacturing companies, fourth place is taken by production footprint and supply chain optimization – up three spots from last year. “A balanced global value chain is key to resilience, which has become even more critical in light of ongoing trade conflicts,” explains Horváth expert Ralf Sauter.
Trade Conflicts Casts a Shadow Over 2025
Among all macroeconomic factors, trade conflicts and tariffs are expected to have the most negative impact on business performance in 2025, according to the executives surveyed. In the service sector, however, tariffs rank only fourth. Here, changing interest and inflation rates are seen as the most significant challenges – though these are also heavily influenced by global economic uncertainty and trade tensions.
Growth Only Comes With Structural Change
Across all industries, “reorganization of structures and processes” ranks fifth – up from seventh last year. “Companies understand that navigating the path back to growth amid technological disruption and global economic realignment requires a dual focus: excellence and efficiency in core business, and a proactive approach to structural transformation,” says Horváth Partner Ralf Sauter. Striking the right balance between resilience and targeted investment is also crucial. “Future-readiness depends on a mix of four strategic fundamentals: first, cost optimization and efficiency; second, a high-quality, competitive product portfolio; third, a resilient global footprint; and fourth, targeted investments in future-oriented initiatives.”
Sustainability Slips Down the Strategic Agenda
Since 2021, environmental sustainability has steadily declined in strategic importance. Once ranked second, and still sixth last year, it now sits at twelfth place – its lowest position yet. “Sustainability has become operational rather than strategic. Companies are fulfilling their obligations and investing where it makes business sense. But they are not abandoning their net-zero goals – at least not yet,” says Ralf Sauter. According to the study, fewer than 20% of companies are considering or have already decided to delay their targets. The majority remain committed, and 15% even aim to reach their goals ahead of schedule.
About the Study
The 6th annual Horváth CxO Priorities Study surveyed over 1,000 board members and managing directors from large companies across 15 industries and 33 countries on current management trends and business outlooks. Eighty percent of the companies surveyed generate annual revenues exceeding €100 million. The majority are from the manufacturing sector. The survey was conducted between March and June 2025. Here you can download the full study report: 6th Annual Horváth CxO Priorities Study - Horváth