Thursday, February 12, 2009

Competition and New Entrants to the Federal Market in a Recessionary Environment

As the U.S. economy continues to be roiled by cutbacks in both consumer and corporate spending, I’m seeing an increased number of companies turning to the federal government market.

Entering the federal market in difficult economic times is nothing new. A similar wave of newcomers arrived in the aftermath of the 2001 dot-com crash. Some of these companies went on to become successful contractors, while others floundered for a few years before returning to their roots in the commercial marketplace.

Both new entrants to the market and established contractors need to be aware of the impact of these changes to the competitive landscape.

If you’re a new entrant to the market, you’ll quickly find that the competition in your strategic group may be completely different than you’re used to. In the federal market, you will encounter rivals you've never before heard of, and your biggest competitors may be nowhere in sight.

Established contractors also need to be aware of the quickly changing competitive landscape. New firms may enter the federal market with blazing speed, and they have the potential to disrupt established relationships with your customers. They may literally be fighting for their corporate lives, and may aggressively price their products or services to establish a presence in this new market.

While not every company in the federal market has a GSA Schedule, they are the contract vehicles toward which commercial companies tend to first gravitate, and GSA Schedule activity often provides the first indications of a company’s actions in the federal market. Therefore, the best places to monitor the changing composition of your strategic group remain GSA Advantage and the GSA Schedules E-Library.

Please contact us at Rozycki Associates to learn more about our competitive intelligence services.

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