Sink or swim

Too many of the world’s leading B2B Services firms are at risk of revenue and margin decline – and only a few are acting with sufficient aggression to pursue their next wave of profitable growth.

Business to Business (B2B) Services is one of the world’s largest and yet most under-reported, markets. However it provides the foundations of a substantial part of the broader economy – as it includes construction, outsourcing, marketing, workplace services – and hence its sheer scale can surprise the uninitiated. Despite often operating in highly fragmented markets, the 200 companies that we focus on in this report alone have combined revenues of £1.5trn ($2.3trn).

For the UK and many European players, the sector is disproportionately important. For many years, European firms have led the world in delivering innovative outsourcing propositions and sustainable competitive advantage. This sector accounts for almost 30% of the UK economy and over half of its growth. It is one of the UK’s primary exports and its medium term vitality will be critical to continued economic recovery.

Traditionally B2B has outperformed other sectors. Resilience during the recession catapulted B2B stocks onto every serious investor’s agenda, accompanied by increasing recognition of the certainty provided by contract-based business models with high visibility of forward revenues. yet in this edition of OC&C’s annual B2B Index we find that the sector has failed to respond to the ‘Global Warning’ we issued in last year’s B2B Index report.