Five forces

Threat of entry by new or potential competitors

• Global competition is a threat for big design firms as it is rising, but consultancies report that opportunities for work outside the UK has also increased, so it’s fair.

• Emerging markets such as China, South Korea and Singapore offer better design services than before and therefore can be a threat.

The degree of rivalry among incumbent firms

• Even though the international competition is increasing, 90% of design businesses consider that their biggest competition is still coming from the UK.

• Smaller businesses now become a competitor for bigger firms for smaller or not-so-small projects.

• Though the number of in-house teams has been increasing, many companies merge their in-house designer team with extern designers for bigger projects. Smaller businesses also collaborate with freelance talents for some projects.  In fact, 57% of design consultancies say they have collaboration with other design businesses

 

The bargaining power of suppliers

• 55 310 undergraduate design students

• Low power for inexperienced designers

 

The bargaining power of buyers

• Empowerment of clients is definitely a challenge designers have to work with.

• Though, since there are a lot of design businesses and freelance designers, international clients tend to go to design businesses with a reputation.

• In the last decade, companies have recognized the power of design, as it is literally a part of their strategy.

• As design becomes more important for business, design consultancies are conscious that their work offers value and differentiation, making brands more competitive .

 

The threat of substitute products and services 

• Rise of in-house designer teams
  

   

 Source: Design Industry Insights : Comments and Conversations on the Business of Design in the UK