By Petre Barac
Copyright thediplomat
Cost and profitability optimization has become the top priority for C-level executives (CxOs) from over 1,000 companies worldwide. These findings come from the sixth edition of the “CxO Priorities” study conducted by Horváth, an international management consultancy present on the Romanian market since 2005.
This strategic priority climbed to first place, after already moving from 4th to 2nd position between the 2023 and 2024 editions of the study.
In today’s global economic environment—marked by trade conflicts and technological disruptions—the Horváth study identified four key factors that secure a strategic advantage and drive company performance:
Operational excellence: boosting efficiency and cost competitiveness;
Refined product and service portfolio: prioritizing growth and high value-added offerings;
Balanced global value chain: building a resilient and competitive footprint;
Future-ready core: innovation through technology and artificial intelligence.
The study shows that the bulk of forecasted revenue growth for 2025 (73% in manufacturing and 60% in services) will come from sales volumes rather than prices, confirming mounting pressure on profit margins. Both manufacturing and services target a 3% cost reduction relative to revenues, reflecting a shared commitment to spending efficiency and stronger financial discipline.
Investments in AI and R&D Move Up the Agenda
Digital transformation—including the use of artificial intelligence (AI)—ranks second among strategic priorities, while cybersecurity comes in third for service industries. In contrast, for manufacturing companies, innovation and research & development (R&D) occupy the third spot.
AI investments are growing rapidly year-on-year: up to 1.3% of revenues in telecom, 0.4% in manufacturing, and 0.6% in services.
For manufacturing companies, excellence in the core business is the leading strategic priority. This involves refining and diversifying product portfolios to meet customer needs and generate long-term value. In this context, 65% of CxOs leading manufacturing companies state they plan to increase investments in innovation and R&D over the next 12 months.
Workforce-related topics—talent availability, skills development, and leadership culture—rank fourth across all industries. Even though the talent shortage has eased, global production networks and the rapid rise of AI bring new challenges. In manufacturing, production footprint and supply chain optimization take fifth place, climbing three positions from last year.
Reorganization Gains Ground, Sustainability Slips
Across industries, organizational restructuring and process redesign have risen to fifth place, up from seventh in 2024. The study shows that 58% of companies plan to implement organizational restructuring within the next two years.
Since 2021, sustainability has been on a steady decline in the rankings. Once second, and sixth last year, it has now dropped to 12th place for 2025. Overall, 67% of companies remain committed to “net zero” goals, but one in five has decided to delay sustainability initiatives, reflecting an uncertain climate and the dominance of other business objectives.
“As the global economy becomes increasingly fragmented, executives are focusing on the real drivers of performance: maintaining competitiveness in established markets with proven products and services, while managing costs to protect profit margins. Companies understand that returning to growth in an environment of technological disruption and global economic shifts requires a dual focus: excellence and efficiency in the core business, alongside proactive structural transformation,” said Maria Boldor, Partner and Managing Director at Horváth Romania.
The Horváth “CxO Priorities 2025” study was conducted in May–June 2025, interviewing over 1,000 board members and CEOs across 15 industries, including energy, manufacturing, automotive, retail, technology, and financial services.
Respondents came from 33 countries across North and South America, the Middle East, Asia, Australia, and Europe—including Germany, Austria, Switzerland, Poland, Romania, and Hungary—providing both regional and sector-specific insights. 80% of participating companies generate annual revenues exceeding €100 million.
