Market drivers and competitive landscape

The scale of our infrastructure and breadth of our expertise provide us with a strong competitive edge across our markets and enable us to present strong propositions to clients.

Most of our markets contain a stable set of responsible competitors providing a healthy market place in which to bid. New entrants to our markets face significant barriers to entry as it takes time and scale to establish a strong presence.

We focus on supporting clients from the UK and Ireland where there are significant opportunities for growth. An independent survey has estimated the market’s potential at £94.8bn, split 2:1 between private and public sectors respectively. In 2007, the total market for BPO was estimated at £5.1bn and forecast to grow at 10% a year until 2011*.

Drivers behind our markets

We currently operate in nine distinct markets where the drivers for seeking outsourced solutions and professional support services are strong.

We constantly expand our offering in existing markets and broaden into complementary new market segments. In 2007, our private/public sector split was 48%/52% (2006: 48%/52%). Over time, we expect to move closer to the overall market’s 2:1 ratio; but we will continue to pursue the most attractive opportunities where we can generate value for our clients and sensible returns for Capita, irrespective of their market sector.

Appetite for outsourcing remains strong and we are experiencing an increase in interest from clients in a number of our target market sectors. In 2007, we were most active in securing large outsourcing contracts in life and pensions and local government. Central government was the quietest market. So far in 2008, we are experiencing buoyant activity across many of our markets but still expect central government to remain fairly quiet, apart from support required to set up service infrastructures for new initiatives.

Some of our prospective private sector clients are expecting their market conditions to deteriorate over the next 18 months. This is prompting them to explore how outsourcing could help create a more flexible and lower cost operating model. Given our scale and expertise in achieving this, we may see growing demand from private sector organisations. However, we will continue to pursue such opportunities selectively and ensure controlled growth across the Group.


Competitor rankings UK BPO market*