What: Global businesses must develop new operating models that balance regional autonomy with global efficiency, as geopolitical realignment, AI advancement, and slowing growth reshape traditional trade relationships.

Why it is important: The shift from rules-based multilateral trade to regional blocs demands new operational approaches, particularly as 87% of companies implementing AI report significant revenue increases, highlighting the critical link between technological adoption and business success.

Three major trends are fundamentally reshaping how global companies operate: geopolitical realignment, rapid AI advancement, and slowing global growth. The traditional system of rules-based multilateral trade is being replaced by distinct blocs and clusters, each with potentially incompatible business rules. While CEOs are currently focused on immediate challenges like supply chain resilience and cost-cutting, the research shows they must also address longer-term structural changes. Companies need to reconfigure their value chains, revise governance frameworks, and modernise their approach to talent management. The study reveals that over 60% of large companies prioritise supply chain resilience, while only 35% focus on building AI capabilities. Success requires a careful balance between maintaining global scale advantages and developing regional flexibility. Leading companies are already adapting through innovative interventions, from restructuring business units to advancing partnerships and implementing AI at scale.

IADS Notes: Recent market evidence underscores the urgency of operational transformation. In March, retailers faced unprecedented complexity in tariff management, with BCG projecting $640 billion in additional import costs. By February, major retailers began implementing AI-powered analytics for supply chain optimisation, while only 10% successfully scaled their applications. The impact of these changes is particularly evident in Asia, where January data showed significant shifts in retail dynamics, with emerging markets growing at 11% compared to developed markets' 4.5%. Success stories demonstrate the potential of new operating models: in May, Estée Lauder's AI implementation reduced analysis time from weeks to minutes, while December saw retailers achieving 30% faster operations through automated systems. These developments highlight how companies must balance technological innovation with regional market understanding to succeed in the new global landscape.

If you’re a global business, you need a new operating model