20 trends you need to know when drafting and executing your long term growth strategy

THE 2016 WATCH LIST

September 2015

Assume the world will be fully connected by 2020

Source: United Nations, 2015; emarketer, December 2015; Internet World Stats, 2015 (as of December 2014); Experience Think, 2015; Ericsson Mobility Report, June 2015.

1

2010 2015F 2020E

Global Population

6.9Bn

26%

42%

7.3Bn

60%

7.7Bn

Internet penetration

Smartphone penetration

10%

20%

3.1Bn

4.6Bn

1.9Bn

5.0Bn

0.7Bn

1.4Bn

Connected World

66%

Soon most devices, products -even clothes- will be connected2

Source: Business Insider, 2014. Cisco IBSG.

2005 2010 2015E 2020E

PersonalComputers

Smartphones

Tablets

Internetof Things

WearablesSmart TVs

0.5Bn2Bn

12Bn

50Bn

Global connected device numbers grew 24X in just 10 years

Connected World

Consumer Business Security

Education Healthcare Government

All industries are playing the “digital catch-up” game to stay competitive

Source: KPCB, 2015.

3Estimated global digital penetration, by industry

Connected World

GENERATION ZGENERATION ZMILLENNIALSMILLENNIALS16 - 34 years old16 - 34 years oldweb firstweb first 0 - 15 years oldmobile firstmobile first

Young adults will redefine how we produce and sell our products and services

Source: Sparks & Honey, “Meet Generation Z:Forget Everything You Learned About Mille”nnials, 2014; Rob Norman’s, “Turning 13 in 2014”, BTIG, 2014, IAB México Teens, 2015.

Multimedia devices

Content focus

Socially integrated

TV prime-time chasm2012 - 2014 hours per week change

On demand vs. linearpaid vs. free

2

share / mostly text

78%

-6hrs

create / mostly image/video

-5hrs

89%

5

50/50 90 on demand mostly freePPV / DVR / ROD

( )from

23 ( )from

20

Millennials and Gen Z

4

People, values, incentives and global sourcing

5

Enhanced business intelligence

Source: PSFK Labs, “The Future of Work,”, 2013.

“Great spaces”

Future of Work

OpenKnowledgeConstant learning

On-DemandStaffing

Optimized skillsets

OptimalInteractionDigital + physical

employees-vendors-clients

The work enviroment must constantly adapt to an ever-shifting marketplace

6 Technology investments and partnerships will drive productivity and growthWorldwide enterprise software spending (Bn of USD)

2010 2017E

$55.2

$108.7

21.3

34.4

13.9

36.5

10.56.8

18.7

13.6

2.6 5.6

Source: Gartner, December, 2014.

Enterprise Resource Planning

CRM

Business Intelligence

Supply Chain ManagementWeb Conferencing

IT Spending

+$54Bn Bn

Bn

CAGR +10%

7 Actionable business intelligence will be a mandatory competitive edge

Source: IBM Software Day, 2014.

Enterprises that applyadvanced analytics have...

33%more revenue growth

12xmore profit growth

&

Business Intelligence

Have aconsistentview of the

business

Determinewhere

to makeinvestments

Getreal-time

analysis

Identifywaste andcontaincosts

Improvethe decision-

makingprocess

Accessand shareinformation

easily

BusinessIntelligence

Source: Forrester, eMarketer January, December; 2014; AMIPCI, 2015.

$2,541$491

$75$12

1998 2006 2014 2018E

Top 10 eCommercecompanies by revenue

eCommerce will enable accelerated growth and set new service standards Share of e-commerce as part of total retail sales (Bn of USD)

0.1%

8.9%8.5%

3.0%2.9%

0.05%0.2%0.3%

MEXICOLATAMGLOBALUSA

eCommerce

8

9

Source: Deloitle 2015. Bain & Company 2014.

Competition will lead us to embrace loyalty programs and new service standards

increase in profitabilityChurnreduction

Loyalty-CRM

5 %

%25-125

Retailers with loyalty programs are

88 %

x

moreprofitable

One new customer

= cost of retaining acurrent customer7

Recurrent revenue models generate exponential value based on lasting relationships10

Source: Gartner. BI, “Suscription Revenue Report ,” 2015 John Warrilow, “The automatic consumer,” 2015.

Higher multiples:Enterprise Value / EBITDA (Aug 15)

of all media and digital businessesembracing subscription services

incremental revenue of reported global 2000 companies

40% 35%

Subscription Models

4 in 5 CEOs believe customers are switching to new consumption models like sharing or subscribing

128 44 4.28

Advertising grows 6%/yr through 2020; digital and mobile capture the lion's share11Share of global marketing spend, 2004-2017 (% of total)

Source: Zenith Optimedia, 2014.

30%

12% 13%

0%4%

6%

20%

11%

38% 37%

9%6%

0.5%0.5%

6% 7%

@

2004

2017

E

TV Radio Film OOHMagazinesNewspaper Digital Mobile

31%31%31%

Marketing Re-Mix

37%41%

11% 11%

4%

18%

8%

24% 24%23%

TV Radio Print Internet Mobile

Mobile marketing represents the biggest opportunity in terms of time

Source: IAB, emarketer, 2014; KPCB, 2015.

AD S

PEND

TIME S

PENT

OPPO

RTUN

ITY

$25BN

The mobile catch-upopportunity

Time spent vs. ad spend (% of US 2015 total)

Marketing Re-Mix

11

11 Marketing experts will dramatically change their marketing mix

Email marketing

LESS MORE

Mobile marketing

Social media

Search (SEO/PPC)

Online display advertising

Tradeshows and events

Direct mail

Public relations

Print advertising

Radio/TV advertising

61%

49%

40%

38%

37%

18%

17%

17%

12%

8%

4%

5%

1%

6%

8%

17%

22%

33%

18%

6%

Source: Sensorpro, Strong View Survey 2014.

% spend% spend

Investment increase/decrease based on "affirmative answers" (according to a survey of 377 global CMOs)

Marketing Re-Mix

11 In Mexico alone, the “marketing re-mix” already happened

Source: CICOM, April 2015.

Marketing/advertising investment plus share change, 2005 vs. 2013 (Bn of USD)

Open TV$2.9

-31%Radio $ 0.5

-15%

Newspaper$ 0.4

-36%Pay TV$ 0.4 +20%

Outdoors$ 0.4 -48%

Internet $ 0.6

Magazines $ 0.2 -58%Movies$ 0.1 -51%

DirectMarketing $ 2.1

Research$ 0.4

PR$ 0.4

Grap

hic D

esign

$ 0

.1

Promotions and BTL$ 3.8

+729%

+46% +85%-37%

+40%

Marketing Re-Mix

33HRS

5HRS

22Min

29HRS

Hours spent watching video per weekDigital video is starting to compete head-to-head with live and linear TV

2010 2012 2014 2016 2018 2020 2022Source: The Diffusion Group, 2014.

Digital Video

Live TV

Online Video

12

Mobile screens already capture one-third of all viewers13Hours spent watching video, per day (adults 18+, USA)

2010 2015

7.2hrs

9.5hrs

0.4 6%

2.4 2.4

4.4

33%

61%

29%

26%

Source: eMarketer, April, 2015.

Mobile spikes from

6 to 29%of screen share

Mobile spikes fromMobile spikes fromMobile spikes from

6 to 29%of screen shareof screen shareof screen share

TV & Desktopshare drops 24%total hours viewed remains flat!

Mobile

Desktop/laptop

TV

2.9

4.345%

Online Video

14

Source: PwC, 2015.

Shared economy sector

Traditional rental sectorPeer-to-peer lendingand crowdfunding

Peer-to-peeraccommodations

Onlinestaffing

Car-sharing

Music and videostreaming

Equipmentrental

B&Bs/hostels

Lending libraries

Car rental

DVD rental

Global shared economy growth (Bn of USD)

Limited supply

Unlimited idle capacity

The sharing economy is impacting most service industries

$255

$670

50%$335

50%$335

94%$240

6% $15

2014 2025E

The Sharing Economy

15

Source: PWC, 2014; US Dep of Labor, 2015.

Future of Education

Education/learning systems and protocols are changing dramatically

77% of teachers use technology to motivate students in the classroom

43% of teachers using gaming as a learning resource

23% of total consumer/educational book publishing revenues derived from e-books

65% of today´s grade school kids will end up at jobs that haven’t been invented yet

1 in 3 students take an online college course

Yesterday 2015-2018 2018-2025Education/learning largely fixed—centered on pre-programmed computer or classroom

Peer-to-peer environment; mobile media target kids in general

Learning system adapted to each child (vs. child adapting to school)

16

Source: Singularity 2015.

Artificial Intelligence

Machine learning is displacing numerous human tasks at accelerated speeds

1026

1020

1015

1010

105

0.0001

204520202015200019801960194019201900

1

Surpasses brainpowerof single human

Surpasses brainpowerof Insect

Surpasses brainpowerof mouse

Calcu

lation

s per

seco

nd pe

r $10

00

Surpasses brainpowerequivalent to that of all human brains combined

Exponentialgrowth of computing

The accelerating pace of changeAgriculturalRevolution

8000years

120years

90years

22 years

IndustrialRevolution

LightBulb

MoonLanding

WorldWide Web

Human genomesequenced

9 years

Data -

Information

-

Wisdom

17 3D printing will disrupt a $10Tn manufacturing and design industry

Source: Peter Diamandis and Steven Kotler, "Bold: How to Go Big, Create Wealth and Impact the World," 2015.

On-demand parts in spaceAEROSPACE

Co-design and co-creation with customersRETAIL

AUTOMOTIVESophisticated components/crowdsourced design

HEALTHCAREImplants, prostheses, organs

COMMERCIAL AVIATIONLow-volume replacement parts

Disrupted industries

3D Printing

materialreduction costs

energy usereduction

Organic andinorganic materials

Crowdsourced design

Easyprototyping

90 % 50 %

Gaming

18 The gaming industry will revolutionize how people interact, learn, love...

Source: Newzoo, 2014 Global Games Market Report & Service.

online population1.8Bn 60%gamers

2000$8Bn

$103Bn

3x Box Office$32Bn

Gaming Industry

Revenue byscreen

24%

TV/Console

22%

Mobile

40%

PC

14%

Tablet

2017

Source: Rock Health funding database, 2015.

ANALYTICS AND BIG DATA DIGITAL MEDICAL DEVICES

Software/hardware designedto treat a specific diseaseor condition.

HEALTHCARE CONSUMER ENGAGEMENT

Consumer tools for thepurchasing of healthcareservices or health insurance(B2B and B2C).

PAYER ADMINISTRATION

Management andadministration toolsfor payers.

POPULATION HEALTH MANAGEMENT

Comprehensive platformsfor managing the health ofpopulations under the shiftto risk-based payment models.

TELEMEDICINE

Delivery of healthcareservices through non-physicalmeans (e.g. telephone, digitalimaging, videoconferencing).

Future of Health

The healthcare industry seeks to extend/improve quality-of-life

$381M $280M $238M

$223M $195M $172M

Data aggregation and analysis to support a wide range of healthcare use cases.

19

New productsand servicesDonations to

social causes

Qualityimprovements

Social Value

Busin

ess V

alue

Source: Michael E. Porter and Mark R. Kramer, 2014.

Corporate shared-value models are effective and profitable20Shared Value

Social-impact business modeling

Businessas usual

Charity

Shared-valueenterprises

Shared-valueinitiatives

2016TRENDS TO

WATCH

MEDIA& MKT

RE-MIX

DATA &ANALYTICSEXPLOSION

GAMING

3DPRINTING

SUBSCRIPTIONBUSINESS MODELS

GLOBALCONNECTIVITY

THE FUTURE OF HEALTH

NEW CONSUMPTION

SHIFTSMILLENNIALS

GEN Z

THE SHAREECONOMY

THE NEWWAY TO SHOP:

E-COMMERCE

INTERNET &SMARTPHONEPENETRATION

DIGITAL VIDEO TRUMPS

TRADITIONAL TV

MOBILEFIRST

CORPORATESHAREDVALUE

DIGITALGROWTH VS.TRADITIONAL

MEDIA

THE FUTUREOF WORK

ARTIFICIALINTELLIGENCE

/ MACHINELEARNING

ITSPENDINGGROWTH

BUSINESSINTELLINGENCE

FOR COMPETITIVEADVANTAGE

LOYALTY@THE CORE

INTERNETOF THINGS

ABOUT

info@sws.ms sws.ms

SWS is a hands-on consulting firm specialized in disruptive and results-oriented strategy. Our client list includes global players and local industry leaders in search for solid future positions that embrace the powerful benefits the connected world can offer.

Focused on both the US Latino and Mexican markets, our strengths comprise proven expertise in the telecom, media, marketing and digital space.