Bell Laboratories Competition
Now Viewing Bell Laboratories's competition in: Testing Laboratories (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
What percentage of the lab’s revenue comes from the government? - The government is a large customer of testing labs.
What industries does the company target? - Typical customers are in auto, aerospace, telecom, transportation, electronics, and manufacturing.
What industry accounts for the greatest percentage of lab work? - Testing labs often cater to a particular industry.
How many customers does the lab have? - Testing labs can have just a few customers or hundreds over a variety of industries.
How often do the company’s sales opportunities involve competitive bidding? - Most government contracts and large private sector contracts involve competitive bids.
What type of marketing does the lab use to gain more work? - Some labs advertise in specialty journals.
What percentage of the company's work is repeat business? - Some labs depend on repeat business from a few key customers.
What is the lab’s primary competition? - In-house corporate labs and government labs compete with independent testing labs.
Competitive Landscape
Demand is driven largely by industry and government spending on R&D to improve the efficiency of operations and develop new products and services. The profitability of individual companies depends on technical expertise and the ability to accurately predict project costs. Large labs have advantages in providing a larger breadth of service through multiple locations; some have strategic partnerships with major corporations. Small labs compete effectively by specializing in particular types of service. The industry is labor-intensive: average revenue per worker is less than $100,000. Testing labs compete with internal labs of major corporations and government entities.
Business Challenges
CRITICAL ISSUES
Reliance on Cyclical Customer Industries - The auto, telecom, aerospace, and high-tech industries, major users of testing labs, are sensitive to economic cycles. During economic downturns, these industries often cut new product development. Increases in US market share by imported products also reduce domestic demand for testing labs. Testing labs that rely on the auto industry have experienced declining gross margins since 2005.
Dependence on Government Spending - The US Department of Defense (DoD) and the Department of Homeland Security are major customers of independent testing labs. Some labs rely on the DoD for all their work. Testing labs certify innovations in weapons systems and homeland security equipment. Fluctuations in authorized government spending or changes in program priorities can greatly affect testing lab revenue.
Industries Where Bell Laboratories Competes
- Business Services
- Technical & Scientific Research Services(primary)
- Telecommunications Equipment
- Telecommunications Services
