Rising corporate profit levels, an increasing number of US businesses and rebounding government investment will further boost prices for government relations services
Los Angeles, CA (PRWEB) May 29, 2014
Government relations services have a buyer power score of 3.4 out of 5. This score reflects moderate negotiating strength for buyers. “Demand for government relations services has remained strong over the past three years as companies have sought ways to open up lines of communication with key policymakers,” says IBISWorld procurement analyst Andrew Rebhan. Legislative processes are important to buyers, given the potential consequences that laws may have on their business sectors. This ongoing demand, coupled with strengthening corporate profit levels and an increasing number of businesses, has caused service prices to rise over the past three years, and prices are expected to continue rising in the three years to 2016. Although increasing prices have hurt negotiation power, buyers have benefited from low price volatility, which has reduced the risk of large price swings.
Buyers of government relations services currently benefit from a low level of market share concentration. “Many new suppliers continue to enter the market, giving buyers more choices during negotiations,” says Rebhan. “Major suppliers include Interpublic Group of Companies, Publicis Groupe SA, Omnicom Group Inc. and WPP PLC.” Larger public relations firms with diverse service lines have started to incorporate government relations advisory to bolster their portfolios, further increasing the intensity of competition among vendors. Firms in this market can obtain moderate to high profit margins for their services, opening up potential opportunities for buyers to negotiate prices down, particularly if entering into long-term contracts.
Buyers will face a combination of risks and opportunities during the purchasing process. Communicating with government representatives is an important strategic process for business owners because many laws will either directly or indirectly have an impact on how their businesses operate. Thus, buyers continue to rely on the skills and expertise of suppliers to help influence public policy in a way that is beneficial for all parties involved. Despite strong demand and rising prices, other purchasing factors will aid buyer negotiation power, such as the low total cost of ownership and low supply chain risk.
For more information, visit IBISWorld’s Government Relations Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of government relations services. Suppliers assist buyers by influencing the actions and policies of government officials to help achieve mutually beneficial outcomes. Government relations services are meant to bridge any disconnect that may arise between businesses and political leaders on the effects legislation could have on a given sector. Service providers may form political action committees, build direct relationships with government officials and staff and act as a liaison between the government and their client. Government officials may include senators, congressional staff, regulators and other political representatives. This report does not include services for investor relations, internal relations, crisis management or public relations.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
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