The coming decade of consolidation in B2C ServicesFriday 10 December 2010
B2C Services is big business – around £80bn in the UK alone – but in contrast to retail, most B2C services markets are highly fragmented: the top players in aggregate often account for less than 20% of share, and independents thrive.
However, a number of recent developments – ranging from evolving consumer demand to technological improvements and regulatory changes – mean it’s time to reconsider the case for consolidation over the coming decade. Even taking into account these recent developments, OC&C’s experience suggests only some B2C Services markets will consolidate profitably, and that others will remain fragmented. The determining factor is how the customer buys: are independents always going to be advantaged because the customer values the personal relationship, or can an innovative scale player deliver a differentiated proposition that the customer prefers?
The B2B Services sector is diverse but contains some of the world’s most successful businesses. Leading players are capitalising on waves of outsourcing
Higher and higher
As Western economies are showing hesitant growth paths and uncertainty is freezing investment plans, growth options are dwindling for multinational companies (MNCs) and many heads are turning to China
Moving into the fast lane
The B2B Services sector is a huge and profitable market, but poorly understood, and typically given much less attention than more mature consumer-facing industries. As a result, grasping the realities of how this sector functions can be a source of tremendous value
Pricing for profit
Companies tend to set their prices too low in the business-to-business market. Regardless of pricing policy, some customers end up paying a price that is not justified by the amount they buy or the costs that they incur