Unfortunately for all of us, high-profit margins are not necessarily guaranteed in the current market. This can be attributed to any number of individual or a combination of factors, a majority of which are closely aligned with the increased levels of external competition. Factors such as the decreased level of client loyalty, the competitiveness of panel membership, the growth of in-house representation and the pressures caused by the growing divide between the first and second tier firms, all contribute to the pressures a firm faces in its struggle to maintain profitability.
However, there is an upside to difficult market conditions, although firms do not have significant control over the external factors influencing profitability, they do have control over their own internal factors. Hence, it is during these times that firms typically achieve management and process improvements by identifying and improving areas of inefficiency in performance management, measurement and reporting.
