Editor's Note: Take a look at our featured best practice, Growth Strategy (41-slide PowerPoint presentation). The reality is: all businesses face the challenge of achieving sustainable Growth. They need viable Growth Strategies. So, what is Growth Strategy? It is the organization's high-level Corporate Strategy Plan that outlines everything the organization needs to do to achieve its goals for [read more]
Environmental Consulting as a Revenue Line for Professional Services Firms
Also, if you are interested in becoming an expert on Strategy Development, take a look at Flevy's Strategy Development Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.
* * * *
This is a very big industry that is becoming more main stream. The industry consolidation bandwagon is starting, so like the Gartner Hype Cycle predicts, its only a matter of time before there is wholesale buy-ups of niche Environmental Consulting firms by the broader based players. The USA market is the worlds largest, with spend on Environmental Consulting already at $11.7 Billion. However its also a mature market and not predicted to really grow over the remainder of this decade. If you expand the above to the build side of Environmental facilities, the number rises to over $19 Billion. However, the global growth expectations across all areas of consulting are predicted to stay fairly flat over the next 5 years, so the prediction is not surprising. Based on Hoovers data, the aggregated revenues of the world’s top 20 firms breaks down like this:
- Water and waste management services = 30%
- Contaminated land services = 29%
- Environmental management, compliance, and due diligence = 14%
- Environmental impact assessment and sustainable development= 14%
- Climate change and energy = 8%
The world’s largest firms that account for about 30% of global spend are
- Veolia Environmental Services (US)
- Tetra Tech (US)
- AECOM (US)
- Bechtel (US)
- CH2M HILL (US)
- AMEC Earth & Environmental
- Golder Associates (both based in Canada)
- Environmental Resources Management (UK)
- Arcadis (Netherlands).
Worth noting that even the largest has less than 5% market share under any segmentation that I could see. However, and just to make a point, a great deal of the companies in this area are actually very small. The overall category comes under Engineering Services, which has a Global Revenue of $783 Billion, employs over 4 Million People across over 730,000 companies (an average of just 5 people per firm).
Where the Customers Come From
Businesses and government agencies have to comply with environmental laws and regulations. The profitability of any company depends on securing contracts with large organizations such as the government. While Large firms have the advantage of providing a wide range of environmental expertise, small firms are able to compete by specializing in local markets or focused areas of expertise.
If it makes sense to enter the market, it is probably best achieved by buying an existing small firm. The number in the UK alone looks in excess of 1000 firms, with small employment in 90% of them And equally, the day rates do not look that great either when if comes to what the IT industry achieves, with lower than average utilization rates. So my deduction is that much of the Environmental Services Consulting Industry could do with a “Best Practice” bath from the broader industry its a subset of.
But fundamentally, Environmental Consulting is a Professional Services Industry, so its challenges are familiar to us all.
Want to Achieve Excellence in Strategy Development?
Gain the knowledge and develop the expertise to become an expert in Strategy Development. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.
"Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat." - Sun Tzu
For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to "Tactical" Strategy. Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations.
These frameworks include Porter's Five Forces, BCG Growth-Share Matrix, Greiner's Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.
Readers of This Article Are Interested in These Resources
44-slide PowerPoint presentation
76-slide PowerPoint presentation
About Alan CreanAs a PSA&PPM Principal at the Changepoint, Alan enjoys working with and advising a variety of interesting Managers and Executives about the best practices that help us all achieve our business goals. Alan Crean is a Subject Matter Expert in Professional Services Automation with a particular focus on supporting the Lead to Cash process for Technology based Professional Services and Consulting firms. You can connect with him on LinkedIn here.
Top 10 Recommended Documents on Growth Strategy