Environmental Consulting Competitive Analysis

Wade ArmstrongGarrett DeBernardi

Tim LewisLane Naramore

Quinton PooleRob Warren

Agenda

• Industry Overview• Major Players• Survey Results

1. Types of Consulting Services2. Services Most Often Requested3. Most Common Industries Served4. Most Common Areas Served5. Service Compensation

• Summary• Recommendation

Stakeholders

• Client– Dr. Darrell Dechant

• Director, Dept. of Environmental and Industrial Programs, College of Continuing Studies

– College of Continuing Studies• Advisor

– Billy Hatmaker, GBA 526 Instructor• Team

– Wade Armstrong– Garrett DeBernardi– Tim Lewis– Lane Naramore– Quinton Poole– Rob Warren

Project Scope & Charter

• Develop a comprehensive competitive analysis of the environmental services consulting industry as it pertains the Southeast and Alabama in particular

Industry Overview: Definition

DefinitionConsultation to businesses and federal

governments on environmental issues regarding, but not limited to, the following:– Contamination control consulting– Risk evaluation– Air and water quality consulting– Site remediation consulting– Sustainable development consulting

Industry Overview: Products/Services

Major Products & Services Offered:– Air quality management– Water quality management– Compliance/auditing– Soil quality management– Sustainability studies/consulting– Noise pollution monitoring and prevention

Industry Overview: Revenue Growth

Industry Overview: Establishment/Enterprise

Growth

Industry Overview: Product & Services Segmentation

Industry Overview: Major Market Segments

Private Firms•Approximately 80% of the revenues•Construction, manufacturing, government and energy industries (62.2% of revenues)•Mining and forestry industries (16.0% of revenues)

Industry Overview: Analytic Conditions

• Barriers to Entry—Low • Taxation—Nonexistent • Industry Assistance—Nonexistent • Regulation and Deregulation—Low • Capital and Labor Intensity—Low • Technology and Systems—Low • Volatility—Medium • Globalization—Low (increasing)

Industry Overview: Employee Volume

•Concentration extremely low•Four largest firms in the industry = 6.7% of industry revenue•66.1% of all firms in 2010 will employ 1-4 individuals•Approximately 82.3% will employ 1-9 individuals•Concentration projected to remain fairly steady due to low barriers to entry•As larger firms acquire smaller firms industry concentration may increase in far future

Industry Overview: Establishments by Region

•Southeast, Great Lakes, West, and Mid-Atlantic regions make up approximately 71.9% of entire industry•Concentration of competing firms is tied to concentration of major clients and demand for services

Industry Overview: Key Success Factors

• Ability to secure contracts• Effective cost controls• Access to multi-skilled and flexible workforce• Ability to negotiate successfully with regulator

Industry Overview: Revenue Projections

Major Players

• CH2M Hill– 3% market share

– $532.6 million in total Revenue

– Birmingham, Mobile and Montgomery

– Engineering, consulting and construction services

– Federal, Civil infrastructure and Industrial

– Environmental consulting < 10% of total revenue

Major Players

• Malcolm Pirnie– 2.5% market share– Birmingham and Mobile– $443.8 million in total revenue– Consulting, engineering and management

services– Exhibited 5.8% growth last year

Major Players

• TRC Companies, Inc.– 1.3% market share

– $209 million in total revenue

– Environmental, energy/power and infrastructure engineering and consulting services

– Investigation, and remediation of impaired sites, licensing of facilities, environmental compliance and auditing support

– Expanding its business with the increase in government regulations.

Survey Methodology

• Identified actual consulting firms in the state from large list

• Narrowed larger question list to five– Services Offered– Services Requested– Industries Most Often Served– Areas Most Often Served– Rates

• Phoned firms

Types of Consulting Services

• Most companies have one or more area of expertise, but offer a wide range of services• Some of the common areas include

asbestos/hazardous materials removal; air/water/soil treatment; underground storage tank service

• Some of the specific areas are conservation services; geological services, and brownfield remediation

Services Most Often Requested

• Most Common– Environmental Compliance – Waste Management

• Depending on the area of expertise within the company, niche services are the most frequently requested among the companies surveyed

• According to Randy Payne, the economic environment of late has dictated the services requested from his firm

Most Common Industries Served

• Government

• Industrial Manufacturers

• Commercial and Residential Developers

• General Contractors

• Mining/Exploration

Most Common Areas Served

• All of the firms surveyed are based in, or operate heavily, in the Southeastern United States– Alabama is the most commonly served state– Scattered due to level of manufactures in the

state and current economic conditions– Some serve areas across the Southeast and

even nationwide

Service Compensation

• Most firms reluctant to answer this question

• Fees can and are based both on the type of service requested, as well as time spent working on the service– Some services are billed by the hour, while

others are fixed rates or depend on materials usage

– Usually ranges from $60/hr-$260/hr depending on level of expertise and the project itself

– Most fell in the range of $90/hr-$150hr

Summary

• Industry Lifecycle Stage – Growth• Over 60% Revenues

– Construction/Manufacturing– Government– Energy

• Over 50% of firms employ 1-4 people• Average Salary - $65,000• Key Success Factors• Competitors

Recommendation

• Not too many major names– Mostly small firms

• University’s “Brand Name”

• Test the Waters– Focus on construction, manufacturing, gov’t and

energy• Full Program

– Niche Services (emergency planning, underground storage, hydrocarbon leakage, etc.)

Questions?