IHS Competition
Now Viewing IHS's competition in: Professional Services
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Does the firm serve mainly individuals or corporate customers? - Most firms have mainly corporate customers.
Are customers concentrated in a particular industry? - Industry specialization is common, but many firms are broadening their practice to include more disciplines.
How much business is from repeat customers? - Small firms may get most of their business from repeat customers.
Do a few customers account for a large part of revenue? - Many small professional firms get a big percentage of revenue from a few large customers.
Does the firm have long-term relationships with some customers? - Large firms frequently have long-term relationships with corporate or government customers.
How much of the firm’s business comes from referrals? - Small firms typically rely more on referrals.
Does the firm bid on contracts? - Firms are often invited to bid on a project in competition with other firms through a request for proposal (RFP).
Does the firm ally with other firms to bid on large contracts? - Because many projects require a breadth of expertise that individual firms may not have, partnerships or alliances with other firms are common, particularly in the legal and engineering segments.
Competitive Landscape
Demand is driven by corporate profits and the overall health of the US economy. Although some professional services are necessary for the normal functioning of most companies, many services can be postponed during economic downturns. The profitability of individual firms depends on having a regular flow of projects. Large firms have advantages in marketing and in being able to offer wider ranges of services to meet the needs of major clients. Small firms can compete successfully by offering special expertise or focusing on particular regions. Revenue per employee varies among the different types of professional services, but overall, the industry is labor-intensive: average annual revenue per employee is about $135,000.
Business Challenges
CRITICAL ISSUES
Corporate Spending Sharply Affects Revenue - Many corporate customers cut outside expenses or delay major projects when profits are low. The revenue of many professional firms dropped during the early 2000s recession; particularly hard-hit were advertising, engineering, and IT services firms. Corporate customers depend on some professional services and view others as discretionary.
Greater Liability for Professional Advice - Because of the greater involvement of professional firms in the operations of corporate customers, firms face greater risk of blame or liability if their advice proves faulty. Customers are quicker to blame advisors, and regulators are more likely to impose penalties. Accountants and lawyers, in particular, are subject to discipline from licensing authorities if professional standards are violated.
Industries Where IHS Competes
- Media
- Information Collection & Delivery(primary)
- Internet Content Providers
- Business Services
- Education
- Education & Training Services
