Analysis of the Us Business Services Sector Essay

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The US business services sector consists of about 340,000 companies with combined annual sales of about $580 billion. Major companies include staffing services providers Manpower and Kelly Services; facilities service companies ABM Industries and Rollins Inc; and solid waste handlers Waste Management and Republic Services. Other major companies in the sector include office administrative service firms such as Automatic Data Processing and Iron Mountain; ADT Security Services, and the travel division of American Express. The business services sector is highly fragmented: the 50 largest companies account for less than 25 percent of sector revenue.

Europe and the US are the world's largest business services markets. Major companies outside the US include staffing services provider Adecco (Switzerland); waste and remediation services provider Veolia Environnement (France); security services provider G4S (UK); travel agency service TUI Travel (UK); and facilities support services provider Serco Group (UK). Other large business services companies are Rentokil Initial (UK); and ISS (Denmark).

Companies in the sector provide support services to businesses in a variety of industries and, in some cases, to households. Offerings include office administration, hiring and placing of personnel, document preparation and similar clerical services, travel planning, solicitation, collection, security and surveillance services, cleaning, landscaping, pest control, and waste disposal.

COMPETITIVE LANDSCAPE

Demand ultimately depends on the level of business spending, which is determined by the health of the overall economy. The profitability of individual companies depends on efficient operations and effective marketing. Large companies often enjoy economies of scale and can compete for large, national accounts. Small companies can compete by offering highly specialized services, or through superior customer service. The sector is labor-intensive: annual revenue per employee averages about $80,000. Business support activities are often undertaken in-house by establishments in many sectors of the economy.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services provided include employment services (30 percent of sector revenue), services to buildings and dwellings (20 percent), and waste management and environmental remediation services (12 percent). Travel arrangement, and investigations and security services together account for nearly 15 percent. Office administrative services, facilities support, and other business support services account for the remainder of sector revenue.

The personnel staffing industry is divided into three major segments: placement agencies, temporary help services, and professional employer organizations (PEOs). Placement agencies find workers to fill permanent positions at customer companies. Temporary help services provide workers for customers for limited periods, often to substitute for absent permanent workers or to help during periods of peak demand. PEOs contract to provide workers to customers for specific functions, often related to human resource management. The personnel staffing industry has been radically changed by the Internet. Many employers list available positions with one or several Internet personnel sites like monster.com or jobs.com, and on their own site.

Major services to buildings and dwellings include pest control, janitorial services and carpet cleaning, and landscaping. Commercial pest control firms offer services to apartment buildings, office buildings, institutions, hotels, and to the food industry. Services often involve regular preventative measures like spraying and inspection. Janitorial services include cleaning, removing trash, and washing windows. Carpet and upholstery cleaning uses specialty equipment and is slightly less labor-intensive than regular janitorial work. Landscaping services include landscape installation and maintenance, irrigation systems, tree
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