ibisworld industry report 56161 security services … security services in the us august 2012 1...

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IBISWorld Industry Report 56161 Security Services in the US August 2012 Andrew Krabeepetcharat 6HQVH RI VHFXULW\ 5LVLQJ VHFXULW\ EXGJHWV DQG GHPDQG IURP EXVLQHVVHV ZLOO VSXU JURZWK 2 About this Industry 2 Industry Definition 2 Main Activities 2 Similar Industries 2 Additional Resources 3 Industry at a Glance 4 Industry Performance 4 Executive Summary 4 Key External Drivers 5 Current Performance 7 Industry Outlook 9 Industry Life Cycle 11 Products & Markets 11 Supply Chain 11 Products & Services 13 Demand Determinants 13 Major Markets 15 International Trade 16 Business Locations 18 Competitive Landscape 18 Market Share Concentration 18 Key Success Factors 18 Cost Structure Benchmarks 20 Basis of Competition 21 Barriers to Entry 21 Industry Globalization 22 Major Companies 22 Securitas AB 23 G4S PLC 24 Allied Security LLC 27 Operating Conditions 27 Capital Intensity 28 Technology & Systems 28 Revenue Volatility 29 Regulation & Policy 29 Industry Assistance 30 Key Statistics 30 Industry Data 30 Annual Change 30 Key Ratios 31 Jargon & Glossary www.ibisworld.com | 1-800-330-3772 | info @ ibisworld.com

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Page 1: IBISWorld Industry Report 56161 Security Services … Security Services in the US August 2012 1 IBISWorld Industry Report 56161 Security Services in the US August 2012 Andrew Krabeepetcharat

WWW.IBISWORLD.COM Security Services in the US August 2012 1

IBISWorld Industry Report 56161Security Services in the USAugust 2012 Andrew Krabeepetcharat

6HQVH�RI�VHFXULW\��5LVLQJ�VHFXULW\�EXGJHWV�DQG�GHPDQG�IURP�EXVLQHVVHV�ZLOO�VSXU�JURZWK

2 About this Industry2 Industry Definition

2 Main Activities

2 Similar Industries

2 Additional Resources

3 Industry at a Glance

4 Industry Performance4 Executive Summary

4 Key External Drivers

5 Current Performance

7 Industry Outlook

9 Industry Life Cycle

11 Products & Markets11 Supply Chain

11 Products & Services

13 Demand Determinants

13 Major Markets

15 International Trade

16 Business Locations

18 Competitive Landscape18 Market Share Concentration

18 Key Success Factors

18 Cost Structure Benchmarks

20 Basis of Competition

21 Barriers to Entry

21 Industry Globalization

22 Major Companies22 Securitas AB

23 G4S PLC

24 Allied Security LLC

27 Operating Conditions27 Capital Intensity

28 Technology & Systems

28 Revenue Volatility

29 Regulation & Policy

29 Industry Assistance

30 Key Statistics30 Industry Data

30 Annual Change

30 Key Ratios

31 Jargon & Glossary

www.ibisworld.com | 1-800-330-3772 | [email protected]

Page 2: IBISWorld Industry Report 56161 Security Services … Security Services in the US August 2012 1 IBISWorld Industry Report 56161 Security Services in the US August 2012 Andrew Krabeepetcharat

WWW.IBISWORLD.COM Security Services in the US August 2012 2

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The primary activities of this industry areArmored car services

Bodyguard services

Polygraph services

Private detective services

Security guard services

56145 Credit Bureaus & Rating Agencies in the USThe Credit Bureaus and Rating Agencies industry provides credit checks.

56162 Security Alarm Services in the USThe Security Alarm Services industry sells, maintains, monitors and services security equipment, including burglar and fire alarms.

Industry Definition

Main Activities

Similar Industries

Additional Resources

About this Industry

For additional information on this industrywww.sdmmag.com Security Distributing and Marketing

www.securitymagazine.com Security Magazine USA

www.census.gov US Census Bureau

The major products and services in this industry areArmored vehicle services

Investigation services

On-site security guard services

Security personnel at special events

Other services

Page 3: IBISWorld Industry Report 56161 Security Services … Security Services in the US August 2012 1 IBISWorld Industry Report 56161 Security Services in the US August 2012 Andrew Krabeepetcharat

WWW.IBISWORLD.COM Security Services in the US August 2012 3

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Corporate profit

SOURCE: WWW.IBISWORLD.COM

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Revenue Employment

Revenue vs. employment growth

Products and services segmentation (2012)

69.2%On-site security guard services

16.3%Investigation

services

9.9%Armored vehicle

services

3%Security personnel

at special events 1.6%Other services

SOURCE: WWW.IBISWORLD.COM

Key Statistics Snapshot

Industry at a GlanceSecurity Services in 2012

Industry Structure Life Cycle Stage Mature

Revenue Volatility Low

Capital Intensity Low

Industry Assistance None

Concentration Level Low

Regulation Level Light

Technology Change Low

Barriers to Entry Low

Industry Globalization Low

Competition Level High

Revenue

$28.2bnProfit

$2.3bnWages

$16.3bnBusinesses

40,874

Annual Growth 12-17

4.2%Annual Growth 07-12

-0.2%

Key External DriversCorporate profitCrime rateValue of private non-residential constructionNumber of businesses

Market Share6HFXULWDV�$%�������

*�6�3/&�����

$OOLHG�6HFXULW\�//&�����

p. 22

p. 4

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 30

SOURCE: WWW.IBISWORLD.COM

Page 4: IBISWorld Industry Report 56161 Security Services … Security Services in the US August 2012 1 IBISWorld Industry Report 56161 Security Services in the US August 2012 Andrew Krabeepetcharat

WWW.IBISWORLD.COM Security Services in the US August 2012 4

Key External Drivers Corporate profit&KDQJHV�LQ�FRUSRUDWH�SUR¿W�FDQ�GHWHUPLQH�WKH�UHQHZDO�RU�XSJUDGLQJ�RI�FRQWUDFWV�DQG�WKH�UHFUXLWPHQW�RI�QHZ�FOLHQWV��$Q�LQFUHDVH�LQ�FRUSRUDWH�SUR¿W�ZLOO�FDXVH�EXVLQHVVHV�WR�VSHQG�PRUH�RQ�RXWVRXUFHG�VHUYLFHV��LQFOXGLQJ�WKRVH�RIIHUHG�E\�WKLV�LQGXVWU\��7KLV�GULYHU�LV�H[SHFWHG�WR�LQFUHDVH�GXULQJ�������

UHSUHVHQWLQJ�D�SRWHQWLDO�RSSRUWXQLW\�IRU�WKH�LQGXVWU\�

Crime rate$FWXDO�DQG�SHUFHLYHG�LQFUHDVHV�LQ�FULPH�OHDG�WR�XSJUDGHV�RI�VHFXULW\�V\VWHPV�DQG�VHUYLFHV��$Q�LQFUHDVH�LQ�SHUFHLYHG�FULPH��ZKHWKHU�RU�QRW�DFWXDOL]HG��ZLOO�ERRVW�GHPDQG�IRU�VHFXULW\�VHUYLFHV��7KLV�

Executive Summary

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Industry PerformanceExecutive Summary | Key External Drivers | Current PerformanceIndustry Outlook | Life Cycle Stage

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Page 5: IBISWorld Industry Report 56161 Security Services … Security Services in the US August 2012 1 IBISWorld Industry Report 56161 Security Services in the US August 2012 Andrew Krabeepetcharat

WWW.IBISWORLD.COM Security Services in the US August 2012 5

Industry Performance

Current Performance

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Key External Driverscontinued

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Number of businesses%XVLQHVVHV�DUH�RQH�RI�WKH�LQGXVWU\¶V�ODUJHVW�PDUNHWV��&RQVHTXHQWO\��DQ�LQFUHDVH�LQ�WKH�QXPEHU�RI�EXVLQHVVHV�ZLOO�ERRVW�GHPDQG�IRU�VHFXULW\�VHUYLFHV��7KLV�GULYHU�LV�H[SHFWHG�WR�LQFUHDVH�VORZO\�GXULQJ������

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SOURCE: WWW.IBISWORLD.COM

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Page 6: IBISWorld Industry Report 56161 Security Services … Security Services in the US August 2012 1 IBISWorld Industry Report 56161 Security Services in the US August 2012 Andrew Krabeepetcharat

WWW.IBISWORLD.COM Security Services in the US August 2012 6

Industry Performance

Continuing demand 'HVSLWH�UHFHVVLRQDU\�WURXEOHV��WKH�LQGXVWU\�KDV�FRQWLQXHG�WR�JDLQ�EXVLQHVV�IURP�DQ�LQFUHDVH�LQ�VHFXULW\�RXWVRXUFLQJ��D�WUHQG�WKDW�VWDUWHG�LQ�WKH�PLG�����V��7KH�VHFWRUV�WKDW�RXWVRXUFH�WR�VHFXULW\�VHUYLFH�¿UPV�WKH�PRVW�LQFOXGH�FRPPHUFLDO��LQGXVWULDO��UHWDLO�DQG�EDQNV��&RPSDQLHV�KDYH�DOVR�EHHQ�LQFUHDVLQJO\�XVLQJ�FRQWUDFWHG�VHFXULW\�SHUVRQQHO�DW�VSRUWLQJ�DQG�RWKHU�PDMRU�HYHQWV�WR�DVVLVW�LQ�FURZG�FRQWURO�DQG�JHQHUDO�VHFXULW\��$OWKRXJK�PDQ\�FOLHQWV�DUH�VWLOO�

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Hard times bring consolidation

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SOURCE: WWW.IBISWORLD.COM

Page 7: IBISWorld Industry Report 56161 Security Services … Security Services in the US August 2012 1 IBISWorld Industry Report 56161 Security Services in the US August 2012 Andrew Krabeepetcharat

WWW.IBISWORLD.COM Security Services in the US August 2012 7

Industry Performance

Hard times bring consolidationcontinued

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More businesses, more demand

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Industry Outlook

,Q�WKH�¿YH�\HDUV�WR�������,%,6:RUOG�SURMHFWV�WKDW�LQGXVWU\�UHYHQXH�ZLOO�LQFUHDVH�DW�DQ�DQQXDOL]HG�UDWH�RI������WR�������ELOOLRQ��'XULQJ�WKH�QH[W�¿YH�\HDUV��DQ�LQFUHDVH�LQ�WKH�QXPEHU�RI�EXVLQHVVHV�DQG�HPSOR\HG�$PHULFDQV�ZLOO�ERRVW�GHPDQG�IRU�VHFXULW\�VHUYLFHV��)XUWKHUPRUH��FRPSDQLHV�WKDW�UHGXFHG�WKHLU�EXGJHWV�DIWHU�WKH�UHFHVVLRQ�ZLOO�LQFUHDVH�WKH�DPRXQW�RI�PRQH\�WKH\�VSHQG�RQ�VHFXULW\�VHUYLFHV�DV�WKH�IXQGV�EHFRPH�DYDLODEOH��&RQVHTXHQWO\��PDQ\�FOLHQWV�ZLOO�H[SDQG�WKH�QXPEHU�RI�VHFXULW\�JXDUGV�RQ�VWDII�RU�WKH�QXPEHU�RI�KRXUV�WKDW�JXDUGV�DUH�RQ�GXW\�,Q�������,%,6:RUOG�IRUHFDVWV�WKDW�

LQGXVWU\�UHYHQXH�ZLOO�LQFUHDVH�DERXW������WR�������ELOOLRQ��$V�WKH�HFRQRP\�UHWXUQV�WR�JURZWK�DQG�FRUSRUDWH�SUR¿W�ULVHV��FRPSDQLHV�ZLOO�VSHQG�PRUH�RQ�RXWVRXUFHG�

VHUYLFHV��FDXVLQJ�GHPDQG�WR�ULVH��6HFXULW\�VHUYLFH�¿UPV�ZLOO�OLNHO\�SOD\�D�JUHDWHU�UROH�LQ�SULYDWH�VHFXULW\�DV�ORFDO�JRYHUQPHQWV�FRQWLQXH�WR�KDYH�SUREOHPV�ZLWK�IXQGLQJ��'HVSLWH�WKLV�JURZWK��WKH�LQGXVWU\�ZLOO�IDFH�LQFUHDVLQJ�FRPSHWLWLRQ�IURP�DODUP�FRPSDQLHV�WKDW�RIIHU�PRQLWRULQJ�VHUYLFHV�RII�VLWH��,Q�DGGLWLRQ��SULFH�EDVHG�FRPSHWLWLRQ�ZLOO�FRQWLQXH�LQ�WKH�VKRUW�WHUP�DV�¿UPV�ORZHU�WKHLU�SULFHV�WR�UHWDLQ�FOLHQWV��3UR¿WDELOLW\�ZLOO�WKXV�UHPDLQ�UHODWLYHO\�ÀDW�RYHU�WKH�QH[W�¿YH�\HDUV�

Competition causes alarm

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Industry Performance

More businesses, more demandcontinued

DQQXDOL]HG�UDWH�RI������WR���������7KLV�JURZWK�LQ�HQWHUSULVHV�ZLOO�DOVR�EULQJ�PRUH�ZRUNHUV�LQWR�WKH�LQGXVWU\��&RQVHTXHQWO\��LQGXVWU\�HPSOR\PHQW�LV�H[SHFWHG�WR�JURZ������DQQXDOO\�WR���������SHRSOH�RYHU�WKH�VDPH�SHULRG��

ODUJHO\�EHFDXVH�RI�WKH�LQFUHDVH�LQ�EXVLQHVVHV�WKDW�UHTXLUH�VHFXULW\��6XEGXHG�JURZWK�LQ�WKH�LQGXVWU\¶V�VL]H�LV�H[SHFWHG�GXULQJ�WKH�VKRUW�WHUP�EHFDXVH�SRWHQWLDO�PDUNHW�HQWUDQWV�ZLOO�ZDLW�XQWLO�WKHUH�DUH�VXVWDLQHG�VLJQV�RI�D�UHFRYHU\�

Competition growing 3UR¿W�LV�SURMHFWHG�WR�UHFRYHU�VOLJKWO\�RYHU�WKH�QH[W�¿YH�\HDUV��1RQHWKHOHVV��FRPSHWLWLRQ�ZLOO�UHPDLQ�LQWHQVH�DPRQJ�RSHUDWRUV�DQG�IURP�VHFXULW\�V\VWHPV�FRPSDQLHV��OLPLWLQJ�LQGXVWU\�SUR¿W�PDUJLQV�WR������LQ�������7KLV�SHUFHQWDJH�LV�XS�IURP������LQ�������EXW�LW�LV�EHORZ�SUHUHFHVVLRQ�OHYHOV�RI������7KH�LQFUHDVLQJ�XVH�RI�PRQLWRUHG�

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RIIHULQJ�JXDUGV��HTXLSPHQW�DQG�RWKHU�YDOXH�DGGHG�VHUYLFHV�DW�D�KLJKHU�SULFH�DQG�PDUJLQ��2SHUDWRUV�ZLOO�HPSKDVL]H�RIIHULQJ�KLJKHU�TXDOLW\�VWDII�DQG�WUDLQLQJ�DQG�UHGXFLQJ�VWDII�WXUQRYHU�WR�ORZHU�DVVRFLDWHG�FRVWV��7KHVH�PHDVXUHV�ZLOO�EH�LPSOHPHQWHG�LQ�RUGHU�WR�LQVWLOO�FOLHQWV�ZLWK�D�KLJKHU�GHJUHH�RI�FRQ¿GHQFH��$V�YDOXH�DGGHG�VHUYLFHV�EHFRPH�PRUH�SRSXODU��VRPH�RI�WKH�ODUJHU�FRPSDQLHV�ZLOO�OLNHO\�IRUP�VWUDWHJLF�SDUWQHUVKLSV�ZLWK�RWKHU�VSHFLDOLVW�PDLQWHQDQFH�FRPSDQLHV�WR�RIIHU�D�WRWDO�IDFLOLWLHV�PDQDJHPHQW�VROXWLRQ�WR�EXVLQHVVHV�DQG�JRYHUQPHQW�HQWLWLHV�

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Industry Performance&RPSHWLWLRQ�IURP�KLJK�WHFK�VHFXULW\�VROXWLRQV�LV�LQFUHDVLQJ

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Life Cycle Stage

SOURCE: WWW.IBISWORLD.COM

30

25

20

15

10

5

0

–5

–10–10 100 20–5 155 25 30

% G

row

th o

f pro

fi t/G

DP

% Growth of establishments

DeclineCrash or Grow?

Potential Hidden GemsFuture Industries

Quality GrowthHigh growth in economic importance; weaker companies close down; developed technology and markets

Time WastersHobby Industries

MaturityCompany consolidation;level of economic importance stable

Shake-out

Shake-outQuantity GrowthMany new companies; minor growth in economic importance; substantial technology change

Key Features of a Mature Industry

Revenue grows at same pace as economyCompany numbers stabilize; M&A stageEstablished technology & processesTotal market acceptance of product & brandRationalization of low margin products & brands

Credit Bureaus & Rating Agencies

Security Alarm ServicesElectronic & Computer Repair ServicesNon-Hotel Casinos

Security Services

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Industry Performance

Industry Life Cycle 7KH�6HFXULW\�6HUYLFHV�LQGXVWU\�LV�LQ�WKH�PDWXUH�SKDVH�RI�LWV�OLIH�F\FOH��7KH�PDWXULW\�LV�HYLGHQW�LQ�WKH�UHFHQW�FRQVROLGDWLRQ�DPRQJ�SOD\HUV��SULFH�EDVHG�FRPSHWLWLRQ�IRU�VHFXULW\�VHUYLFHV�FRQWUDFWV�DQG�LQFUHDVLQJ�GRPLQDWLRQ�E\�D�IHZ�YHU\�ODUJH�FRPSDQLHV��)XUWKHUPRUH��WKH�LQGXVWU\�LV�H[SHFWHG�WR�JURZ�LQ�OLQH�ZLWK�WKH�RYHUDOO�HFRQRP\�LQ�WKH����\HDUV�WR�������'XULQJ�WKDW�WLPH��,%,6:RUOG�HVWLPDWHV�WKDW�WKH�LQGXVWU\¶V�FRQWULEXWLRQ�WR�WKH�RYHUDOO�HFRQRP\��PHDVXUHG�E\�LQGXVWU\�YDOXH�DGGHG��,9$���ZLOO�LQFUHDVH�DW������DQQXDOO\�RQ�DYHUDJH��&RPSDUDEO\��*'3�LV�H[SHFWHG�WR�JURZ�DW�DQ�DQQXDOL]HG������GXULQJ�WKH�VDPH�SHULRG�7KH�GHFOLQH�LQ�GHPDQG�GXULQJ�WKH�

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This industry is Mature

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Products & Services 7KH�VHFXULW\�SURGXFWV�RIIHUHG�E\�WKLV�LQGXVWU\�LQFOXGH�SDWUROV�DQG�JXDUGLQJ�VHUYLFHV��FDVK�WUDQVLW��VHFXULW\�WUDQVSRUW��RI�GRFXPHQWV��GDWD�DQG�YDOXDEOHV��DQG�VHFXULW\�FRQVXOWLQJ�VHUYLFHV��:KLOH�FRQVXPHUV�KDYH�LQFUHDVLQJO\�LQVWDOOHG�VHFXULW\�V\VWHPV�DQG�PRQLWRULQJ�GHYLFHV��WKRVH�SURGXFWV�DUH�FRYHUHG�LQ�WKH�6HFXULW\�$ODUP�6HUYLFHV�LQGXVWU\��,%,6:RUOG�UHSRUW��������

Security guard services7KH�VHFXULW\�JXDUGV�VHJPHQW�LQFOXGHV�VHFXULW\�SURIHVVLRQDOV�ZKR�DUH�KLUHG�WR�JXDUG�SHRSOH��SURSHUW\�DQG�EXLOGLQJV��2Q�VLWH�JXDUGV�SHUIRUP�D�YDULHW\�RI�WDVNV��LQFOXGLQJ�PDLQWDLQLQJ�D�VHFXULW\�SUHVHQFH�DW�D�IURQW�GHVN�RU�JDWH��JXDUGLQJ�PDQXIDFWXULQJ�SODQWV�DQG�HTXLSPHQW��PRQLWRULQJ�FRPSXWHU�URRPV��FKHFNLQJ�DXWRPDWLF�PDFKLQHU\�DQG�DVVLVWLQJ�LQ�

Products & MarketsSupply Chain | Products & Services | Demand DeterminantsMajor Markets | International Trade | Business Locations

KEY BUYING INDUSTRIES23 Construction in the US

Security service companies provide construction firms with guards for residential and non-residential construction sites and materials.

31-33 Manufacturing in the US Manufacturing companies require security services to limit access, guard inventory and provide monitoring services.

44-45 Retail Trade in the US Retail stores use security services for inventory control, cash transfers and in-store video monitoring services.

48-49 Transportation and Warehousing in the US Public transportation companies require security services for passenger safety.

52 Finance and Insurance in the US Security service companies provide banks with security associated with cash transfers, ATMs and general patrol.

71321 Non-Hotel Casinos in the US Casinos use security service firms for cash transfers, particularly from slot machines, and general and monitored security.

72112 Casino Hotels in the US Casinos use security service firms for cash transfers, particularly from slot machines, and general and monitored security.

92 Public Administration in the US Schools, universities, health and hospital facilities and courts and prisons in the public sector demand security services from the industry.

KEY SELLING INDUSTRIES33431 Audio & Video Equipment Manufacturing in the US

The Audio and Video Equipment Manufacturing industry provides firms with security equipment.

56162 Security Alarm Services in the US The Security Alarm Services industry supplies security systems to operators.

81121 Electronic & Computer Repair Services in the US The Electronic and Computer Repair Services industry provides security service firms with repair and maintenance services of electronic security equipment.

Supply Chain

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Products & Markets

Products & Servicescontinued

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Investigation services5HSUHVHQWLQJ�������RI�UHYHQXH��WKH�LQYHVWLJDWLRQ�VHUYLFHV�VHJPHQW�LV�WKH�VHFRQG�ODUJHVW�LQGXVWU\�VHJPHQW��$FWLYLWLHV�UDQJH�IURP�LQYHVWLJDWLRQ�RI�OHJDO�DQG�LQVXUDQFH�FODLPV�WR�FRUSRUDWH�DQG�GRPHVWLF�LVVXHV��3ULYDWH�LQYHVWLJDWRUV�DUH�KLUHG�WR�LQYHVWLJDWH�DFFLGHQWV��DUVRQ��HPSOR\HH�FKHFNV��IUDXG��ZKLWH�FROODU�FULPH��VWRFN�VKULQNDJH�DQG�RWKHUV��0DQ\�SULYDWH�LQYHVWLJDWRUV�DUH�VHOI�HPSOR\HG�LQGLYLGXDOV�ZKR�ZRUN�SDUW�WLPH��,%,6:RUOG�H[SHFWV�WKLV�VHJPHQW�WR�LQFUHDVH�LQ�WKH�IXWXUH�DV�PRUH�FRUSRUDWH�IUDXG�FDVHV�DUH�LQYHVWLJDWHG�

Armored vehicles$UPRUHG�YHKLFOHV�GHOLYHU��FROOHFW�DQG�FRXQW�FDVK�IURP�¿QDQFLDO�LQVWLWXWLRQV��UHWDLOHUV��LQFOXGLQJ�IRU�MHZHOU\�DQG�SUHFLRXV�PHWDO�VKLSPHQWV��DQG�FDVLQRV��7KH�VHJPHQW�DOVR�SURYLGHV�GRFXPHQW�WUDQVIHU��LQFOXGLQJ�FDQFHOOHG�FKHFNV�DQG�WKH�SURYLVLRQ�RI�VHFXUH�VDIHV�IRU�VRPH�FOLHQWV��VXFK�DV�FRQYHQLHQFH�VWRUHV�DQG�JDV�VWDWLRQV��,QGXVWU\�RSHUDWRU�%ULQN¶V�&RPSDQ\�DOVR�KDV�LWV�RZQ�ÀHHW�RI�DLUFUDIW�IRU�GRFXPHQW�DQG�YDOXDEOHV�WUDQVIHUV��$�

Products and services segmentation (2012)

Total $28.2bn

69.2%On-site security guard services

16.3%Investigation

services

9.9%Armored vehicle

services

3%Security personnel

at special events 1.6%Other services

SOURCE: WWW.IBISWORLD.COM

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Products & Markets

DemandDeterminants

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Products & Servicescontinued

VXE�FRPSRQHQW�RI�WKH�DUPRUHG�YHKLFOH�VHJPHQW�LV�WKH�VHUYLFLQJ�RI�$70V��ZKLFK�KDV�ODUJHO\�EHHQ�RXWVRXUFHG�E\�EDQNV��7KH�VHJPHQW�LV�HVWLPDWHG�WR�DFFRXQW�IRU������RI�LQGXVWU\�UHYHQXH�

Other7KLV�LQGXVWU\�DOVR�SURYLGHV�D�QXPEHU�RI�RWKHU�VHUYLFHV�WKDW�DUH�VLPLODU�DQG�UHODWHG�WR�WKH�DERYH�VHUYLFHV��7KHVH�VHUYLFHV��ZKLFK�DFFRXQW�IRU�D�WRWDO�RI������RI�UHYHQXH��LQFOXGH�ERG\JXDUGV�DQG�VHFXULW\�FRQVXOWLQJ��%RG\JXDUGV�DUH�WKH�ODUJHVW�

FRPSRQHQW�RI�WKH�RWKHU�VHJPHQW��UHSUHVHQWLQJ�DERXW������RI�WRWDO�LQGXVWU\�UHYHQXH��7KLV�QLFKH�SURWHFWV�SHRSOH�LQ�KLJK�SUR¿OH�RFFXSDWLRQV��VXFK�DV�SROLWLFLDQV��&(2V�DQG�FHOHEULWLHV��7KLV�VHUYLFH�DLPV�WR�SURYLGH�SK\VLFDO�SURWHFWLRQ�IROORZLQJ�GHDWK�WKUHDWV��SURSHUW\�GDPDJH�DQG�KDUP�WR�IDPLO\�PHPEHUV��2SHUDWRUV�DOVR�SURYLGH�VHFXULW\�UHFRPPHQGDWLRQV�WKURXJK�FRQVXOWLQJ�ZRUN��7KHVH�VHUYLFHV�LQFOXGH�,7�V\VWHPV�VHFXULW\�FKHFNV��WUDLQLQJ��IUDXG�HYDOXDWLRQ�DQG�JDPLQJ�VXUYHLOODQFH�V\VWHPV�

Major Markets &OLHQWV�DFURVV�D�ZLGH�DUUD\�RI�LQGXVWULHV�XVH�WKH�6HFXULW\�6HUYLFHV�LQGXVWU\��6HFXULW\�FDQ�EH�WDLORUHG�IRU�QHDUO\�HYHU\�QHHG��IURP�SURYLGLQJ�SDWUROV�DQG�DODUP�PRQLWRULQJ�WR�VXSSO\LQJ�SHUPDQHQW�JXDUGV�DW�IDFWRU\�VLWHV�RU�EXLOGLQJ�VLWHV�WR�SURWHFW�PDWHULDOV��&RQVHTXHQWO\��PDQ\�LQGXVWU\�FOLHQWV�DUH�VPDOO��WR�PHGLXP�VL]H�FRPSDQLHV��

JRYHUQPHQW�GHSDUWPHQWV�DQG�UHVLGHQWLDO�FXVWRPHUV�6HFXULW\�SURYLGHUV�GHULYH�D�ODUJH�

SRUWLRQ�RI�UHYHQXH�IURP�FRPPHUFLDO�DQG�LQGXVWULDO�FOLHQWV��,%,6:RUOG�HVWLPDWHV�WKDW�PDMRU�FRUSRUDWLRQV�DFFRXQW�IRU�DERXW�������RI�LQGXVWU\�UHYHQXH��0DQ\�FOLHQWV�KDYH�WUHQGHG�WRZDUG�RXWVRXUFLQJ�DOO�DVSHFWV�RI�WKHLU�VHFXULW\��,QWHJUDWHG�

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Products & Markets

VHFXULW\�LQYROYHV�HYHU\WKLQJ�IURP�UHFHSWLRQ�PDQDJHPHQW��SURSHUW\�VHFXULW\�E\�FORVHG�FLUFXLW��DFFHVV�FRQWURO�V\VWHPV��DODUPV�DQG�SK\VLFDO�EDUULHUV��VXFK�DV�IHQFHV�DQG�EDUV���,W�DOVR�LQYROYHV�ULVN�PDQDJHPHQW�DQG�IUDXG�GHWHFWLRQ�DQG�SUHYHQWLRQ��:KLOH�VRPH�FRPSDQLHV�UHGXFHG�WKHVH�VHUYLFHV�IROORZLQJ�WKH�UHFHVVLRQ��WKH�LQWHJUDWHG�VHFXULW\�VHJPHQW�LV�H[SHFWHG�WR�FRQWLQXH�JURZLQJ�GXULQJ�WKH�QH[W�¿YH�\HDUV�DV�PRUH�FRPSDQLHV�XVH�KLJK�YDOXH��FRPSUHKHQVLYH�VHUYLFHV�7KH�JRYHUQPHQW�PDUNHW�VHJPHQW�

DFFRXQWV�IRU�DERXW�������RI�UHYHQXH��6LQFH�WKH�6HSWHPEHU����WHUURULVW�DWWDFNV��WKH�JRYHUQPHQW�KDV�WDNHQ�D�JURZLQJ�UROH�LQ�SURWHFWLQJ�WKH�SXEOLF�DQG�ODUJH�LQIUDVWUXFWXUH�RSHUDWLRQV��LQFOXGLQJ�DLUSRUWV��DLUOLQHV��RWKHU�PDVV�WUDQVSRUW�V\VWHPV�DQG�XWLOLWLHV��&RQVHTXHQWO\��WKLV�VHJPHQW�KDV�GHFOLQHG�DV�D�SURSRUWLRQ�RI�LQGXVWU\�UHYHQXH�DV�WKH�JRYHUQPHQW�WDNHV�RQ�PRUH�RI�WKHVH�DFWLYLWLHV�LQWHUQDOO\�,QGLYLGXDO�UHWDLO�FOLHQWV�SULPDULO\�XVH�

VHFXULW\�VHUYLFHV�WR�SUHYHQW�WKHIW��0DOOV�DOVR�XVH�JXDUGV�WR�GHWHU�FULPLQDO�DFWLYLW\�DQG�YDQGDOLVP�ZKLOH�SURPRWLQJ�D�VDIH�DWPRVSKHUH�IRU�VKRSSHUV��)XUWKHUPRUH��UHWDLO�FOLHQWV�XVH�FDVK�WUDQVLW�VHUYLFHV�WR�KDQGOH�WKH�SK\VLFDO�ÀRZ�RI�FDVK��0DOOV�DQG�RWKHU�UHWDLO�FHQWHUV�RIWHQ�KDYH�

FORVHG�FLUFXLW�FDPHUD�V\VWHPV�LQ�DGGLWLRQ�WR�VHFXULW\�JXDUGV�RQ�IRRW�DQG�LQ�FDUV��7KLV�VHJPHQW�LV�DQWLFLSDWHG�WR�GHFOLQH�GXULQJ�WKH�QH[W�¿YH�\HDUV�DV�PRUH�UHWDLO�RXWOHWV�RSW�IRU�KLJK�WHFK�VHUYLFHV�RIIHUHG�E\�FRPSHWLQJ�LQGXVWULHV��,Q�������LW�DFFRXQWV�IRU�DQ�HVWLPDWHG�������RI�UHYHQXH�%DQNV�XVH�VHFXULW\�VHUYLFHV�WR�SURWHFW�

SK\VLFDO�DVVHWV��H�J��FDVK��DQG�PDLQWDLQ�WKHLU�$70V��7KH\�DOVR�XVH�JXDUGV�DQG�FORVHG�FLUFXLW�V\VWHPV�WR�SURYLGH�D�VDIH�HQYLURQPHQW�IRU�FXVWRPHUV��)LQDQFLDO�LQVWLWXWLRQV�DQG�EDQNV�DFFRXQW�IRU�DERXW�������RI�LQGXVWU\�UHYHQXH��DQG�WKH�VHJPHQW¶V�PDUNHW�VKDUH�LV�QRW�H[SHFWHG�WR�FKDQJH�VLJQL¿FDQWO\�GXULQJ�WKH�QH[W�¿YH�\HDUV�5HVLGHQWLDO�FOLHQWV�XVH�SDWUROV�IRU�

SULYDWH�FRPPXQLWLHV�DQG�DSDUWPHQW�FRPSOH[HV��6LPLODUO\��WKH�LQGXVWU\�DOVR�VHUYLFHV�D�YDULHW\�RI�RWKHU�LQGXVWULHV��LQFOXGLQJ�SRUWV��XWLOLW\�FRPSDQLHV�DQG�SULYDWH�FLWL]HQV��:KLOH�WKH�PDMRULW\�RI�UHVLGHQWLDO�FOLHQWV�XVH�VHFXULW\�VHUYLFHV�IRU�JXDUGV��SULYDWH�FLWL]HQV�XVH�WKH�LQGXVWU\�IRU�ERG\JXDUGV�DQG�SULYDWH�LQYHVWLJDWLRQ�VHUYLFHV��'XULQJ�WKH�QH[W�¿YH�\HDUV��RWKHU�VHJPHQWV�DUH�DQWLFLSDWHG�WR�JURZ�DV�PRUH�LQGXVWULHV�DQG�FRPSDQLHV�XVH�RXWVRXUFHG�VHUYLFHV�

Major Marketscontinued

Major market segmentation (2012)

Total $28.2bn

26%Major corporations

5%Residential clients

23%Retail clients21%

Financial institutions

16%Government clients

9%Other clients

SOURCE: WWW.IBISWORLD.COM

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WWW.IBISWORLD.COM Security Services in the US August 2012 15

Products & Markets

International Trade 7UDGH�GRHV�QRW�RFFXU�LQ�WKLV�LQGXVWU\�GXH�WR�WKH�VHUYLFH�EDVHG�QDWXUH�RI�VHFXULW\�VHUYLFHV��+RZHYHU��JOREDOL]DWLRQ�KDV�PDGH�PDLQWDLQLQJ�DQ�LQWHUQDWLRQDO�SUHVHQFH�PRUH�SUHYDOHQW�DPRQJ�ODUJH�SOD\HUV��

:KLOH�WKH�LQGXVWU\�PDLQO\�VHUYHV�WKH�GRPHVWLF�PDUNHW��WZR�RI�WKH�WKUHH�ODUJHVW�¿UPV�DUH�EDVHG�LQ�(XURSH��DQG�%ULQN¶V��D�PDMRU�86�RSHUDWRU��KDV�HVWDEOLVKHG�D�JOREDO�VHFXULW\�VHUYLFHV�FRPSDQ\�

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Products & Markets

Business Locations 2012

MO1.4

West

West

West

Rocky Mountains Plains

Southwest

Southeast

New England

VT0.1

MA1.8

RI0.3

NJ3.3

DE0.3

NH0.2

CT1.1

MD3.1

DC0.9

1

5

3

7

2

6

4

8 9

Additional States (as marked on map)

AZ1.7

CA16.2

NV1.7

OR0.6

WA1.5

MT0.2

NE0.3

MN1.2

IA0.3

OH2.8 VA

6.4

FL6.4

KS0.4

CO2.2

UT0.5

ID0.2

TX6.5

OK1.2

NC2.2

AK0.5

WY0.1

TN2.9

KY0.6

GA2.9

IL4.2

ME0.2

ND0.1

WI0.7 MI

2.0 PA3.2

WV0.4

SD0.2

NM0.7

AR0.4

MS0.5

AL1.0

SC1.4

LA1.5

HI0.9

IN1.2

NY9.4 5

67

8

321

4

9

SOURCE: WWW.IBISWORLD.COM

Mid- Atlantic

Revenue (%)

Less than 3% 3% to less than 10% 10% to less than 20% 20% or more

Great Lakes

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Products & Markets

Business Locations 7KLV�LQGXVWU\�LV�ODUJHO\�FRQFHQWUDWHG�DFFRUGLQJ�WR�SRSXODWLRQ�GHQVLW\��$�JUHDWHU�FRQFHQWUDWLRQ�RI�VHFXULW\�VHUYLFHV�¿UPV�RFFXUV�LQ�UHJLRQV�ZLWK�ODUJH�SRSXODWLRQV�DQG�FLWLHV��LQFOXGLQJ�WKH�6RXWKHDVW�DQG�WKH�:HVW��6LPLODUO\��WKH�GLVSHUVLRQ�RI�UHYHQXH�ODUJHO\�IROORZV�WKH�FRQFHQWUDWLRQ�RI�HVWDEOLVKPHQWV��7KLV�OHYHO�RI�JHRJUDSKLF�FRQFHQWUDWLRQ�LV�QRW�H[SHFWHG�WR�FKDQJH�GXULQJ�WKH�QH[W�¿YH�\HDUV�7KH�UHJLRQ�ZLWK�WKH�ODUJHVW�QXPEHU�RI�

LQGXVWU\�HVWDEOLVKPHQWV�LV�WKH�6RXWKHDVW��7KH�UHJLRQ�DFFRXQWV�IRU�DERXW�������RI�WRWDO�LQGXVWU\�RI¿FHV�DQG�������RI�UHYHQXH��7KHVH�¿JXUHV�DUH�ODUJHO\�LQ�OLQH�ZLWK�WKH�UHJLRQ¶V�������SURSRUWLRQ�RI�WKH�QDWLRQDO�SRSXODWLRQ��:LWKLQ�WKH�UHJLRQ��

)ORULGD�KDV�D�GRPLQDQW�VKDUH��DFFRXQWLQJ�IRU�������DQG������RI�UHJLRQDO�DQG�QDWLRQDO�HVWDEOLVKPHQWV��UHVSHFWLYHO\��9LUJLQLD��ZKLFK�LV�DOVR�KRPH�WR�D�IHZ�ODUJH�SOD\HUV��LV�D�KXE�RI�JRYHUQPHQW�DFWLYLW\��7KHUHIRUH��LW�LV�RQH�RI�WKH�LQGXVWU\¶V�ODUJHVW�PDUNHWV�7KH�:HVW�DFFRXQWV�IRU�DERXW�������RI�

HVWDEOLVKPHQWV�DQG�������RI�LQGXVWU\�UHYHQXH��:LWK�������RI�WKH�86�SRSXODWLRQ��WKH�UHJLRQ�KDV�PRUH�LQGXVWU\�RI¿FHV�SHU�FDSLWD�FRPSDUHG�ZLWK�WKH�6RXWKHDVW��,W�LV�DOVR�KRPH�WR�&DOLIRUQLD��ZKHUH�HVWDEOLVKPHQWV�DUH�FRQVLGHUDEO\�ODUJHU��&DOLIRUQLD�KDV����HVWDEOLVKPHQWV�ZLWK�RYHU�������HPSOR\HHV��ZKLFK�LV�PRUH�WKDQ�DQ\�RWKHU�LQ�WKH�8QLWHG�6WDWHV�

%30

0

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20

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ntic

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Sout

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RevenueEstablishments

Revenue vs. establishments

SOURCE: WWW.IBISWORLD.COM

%

30

0

10

20

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RevenuePopulation

Revenue vs. population

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Cost Structure Benchmarks

7KH�6HFXULW\�6HUYLFHV�LQGXVWU\¶V�FRVW�VWUXFWXUH�GHSHQGV�RQ�D�YDULHW\�RI�IDFWRUV��LQFOXGLQJ�WKH�W\SH�RI�VHUYLFHV�SURYLGHG�DQG�WKH�FOLHQWV�WKDW�DUH�VHUYHG��)RU�H[DPSOH��¿UPV�WKDW�SURYLGH�VSHFLDOL]HG�VHUYLFHV��VXFK�DV�ERG\JXDUGV�DQG�SULYDWH�

LQYHVWLJDWRUV��W\SLFDOO\�KDYH�KLJKHU�PDUJLQV�WKDQ�¿UPV�WKDW�SURYLGH�VHFXULW\�JXDUGV��7KH�VDPH�IDFWRU�LV�WUXH�IRU�¿UPV�WKDW�VHUYH�JRYHUQPHQW�ERGLHV�FRPSDUHG�ZLWK�¿UPV�WKDW�KDYH�D�OHVV�VSHFLDOL]HG�FOLHQW�EDVH�

Key Success Factors Ability to compete on tender7KH�DELOLW\�WR�FRPSHWH�IRU�QHZ�VHFXULW\�FRQWUDFWV�DQG�KDYH�D�KLJK�UDWH�RI�FRQWUDFW�UHQHZDOV�HQVXUHV�JRRG�FDVK�ÀRZV�

Fast adjustments made to changing regulations)LUPV�PXVW�PRQLWRU�FKDQJHV�WR�WKH�VWDWH�UHJXODWLRQV�WKDW�DIIHFW�WKLV�LQGXVWU\�DQG�DGDSW�DFFRUGLQJO\��5HJXODWLRQV�DUH�H[SHFWHG�WR�LQFUHDVH�RYHU�WLPH�

Close monitoring of competition%HFDXVH�WKH�LQGXVWU\�LV�KLJKO\�FRPSHWLWLYH��¿UPV�PXVW�FORVHO\�PRQLWRU�WKHLU�FRPSHWLWRUV�IRU�VHUYLFH�DQG�SULFH�FKDQJHV�

Access to multiskilled and flexible workforce)LUPV�EHQH¿W�IURP�KDYLQJ�DFFHVV�WR�D�SRRO�RI�ZRUNHUV�ZKR�DUH�ÀH[LEOH�DQG�RSHUDWH�HIIHFWLYHO\�DFURVV�D�QXPEHU�RI�IXQFWLRQV��SDUWLFXODUO\�JLYHQ�WKH�LQGXVWU\¶V�KLJK�ODERU�WXUQRYHU�UDWHV�

Having a good reputation0DLQWDLQLQJ�D�UHSXWDWLRQ�IRU�TXDOLW\�VHUYLFH�KHOSV�PRYH�FOLHQWV�DZD\�IURP�VROHO\�SULFH�EDVHG�FRPSHWLWLRQ�

Use of most efficient work practices(I¿FLHQW�ZRUN�SUDFWLFHV��LQFOXGLQJ�ZDJHV��WUDLQLQJ�DQG�VWDII�EHQH¿WV��FDQ�UHGXFH�WKH�ODERU�WXUQRYHU�UDWH��ZKLFK�FDQ�EH�DV�KLJK�DV�������D�\HDU�

Market Share Concentration

,%,6:RUOG�HVWLPDWHV�WKDW�WKH�IRXU�ODUJHVW�SOD\HUV�LQ�WKLV�LQGXVWU\�DFFRXQW�IRU�������RI�PDUNHW�VKDUH�LQ�������LQGLFDWLQJ�D�ORZ�OHYHO�RI�FRQFHQWUDWLRQ��$PRQJ�¿UPV�ZLWK�HPSOR\HHV��DERXW�������RI�HQWHUSULVHV�KDYH�IHZHU�WKDQ�¿YH�HPSOR\HHV��,QGXVWU\�FRQFHQWUDWLRQ�GHFOLQHV�HYHQ�IXUWKHU�ZKHQ�VHOI�HPSOR\HG�LQGLYLGXDOV�DUH�WDNHQ�LQWR�DFFRXQW��)RU�H[DPSOH��DERXW�������RI�SULYDWH�LQYHVWLJDWRUV�DUH�VHOI�HPSOR\HG��DFFRUGLQJ�WR�WKH�%XUHDX�RI�/DERU�6WDWLVWLFV��6LPLODUO\��ERG\JXDUGV�DUH�RIWHQ�VHOI�HPSOR\HG��0DQ\�VROH�SURSULHWRUV�RIIHU�WKHLU�VHUYLFHV�RQ�D�SDUW�WLPH�EDVLV��RIWHQ�WR�VXSSOHPHQW�RWKHU�VRXUFHV�RI�LQFRPH��2QO\�DERXW������LQGXVWU\�UHYHQXH�LV�JHQHUDWHG�WKURXJK�WKHVH�QRQHPSOR\HU�HVWDEOLVKPHQWV�

7KH�LQGXVWU\�DOVR�KDV�D�ORW�RI�PHGLXP��DQG�ODUJH�VL]H�¿UPV��ZKLFK�W\SLFDOO\�RIIHU�LQWHJUDWHG�VHFXULW\��YDOXH�DGGHG�VHUYLFHV�DQG�FDVK�KDQGOLQJ��'XULQJ�WKH�QH[W�¿YH�\HDUV��WKH�RYHUDOO�OHYHO�RI�FRQFHQWUDWLRQ�LV�QRW�H[SHFWHG�WR�FKDQJH�VLJQL¿FDQWO\�

Competitive LandscapeMarket Share Concentration | Key Success Factors | Cost Structure BenchmarksBasis of Competition | Barriers to Entry | Industry Globalization

Enterprises by employment size (2012)No. of employees Share (%)

0 to 4 51.85 to 9 12.510 to 19 11.520 to 99 16.6100 to 499 5.5500+ 2.1

SOURCE: US CENSUS BUREAU AND IBISWORLD

Level Concentration in this industry is Low

IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:

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Competitive Landscape

Cost Structure Benchmarkscontinued

Profit7KH�LQGXVWU\¶V�FRPSHWLWLYH�QDWXUH�PDNHV�SUR¿W��HDUQLQJV�EHIRUH�LQWHUHVW�DQG�WD[HV��VHQVLWLYH�WR�DQ\�FKDQJHV�LQ�WKH�HFRQRP\�EHFDXVH�SOD\HUV�RIWHQ�HQJDJH�LQ�SULFH�FRPSHWLWLRQ�ZKHQ�GHPDQG�IDOOV��%XVLQHVV�EDQNUXSWFLHV��UHGXFHG�VHFXULW\�EXGJHWV�DQG�ODFN�RI�VPDOO�EXVLQHVV�JURZWK�UHGXFHG�GHPDQG�LQ������DQG�������)LQDQFLDO�ORVVHV�DOVR�RFFXU�EHFDXVH�RI�PDMRU�FRQWUDFW�FDQFHOODWLRQV�DQG�GHPDQG�IRU�UHGXFHG�FRQWUDFW�SULFHV��ZLWK�¿UPV�SURYLGLQJ�WKH�VDPH��DQG�HYHQ�KLJKHU��OHYHO�RI�VHUYLFHV��3UR¿W�KDV�DOVR�EHHQ�KXUW�E\�LQFUHDVHG�FRPSHWLWLRQ�IURP�FRPSHWLQJ�LQGXVWULHV�VXFK�DV�WKH�6HFXULW\�$ODUP�6HUYLFHV�LQGXVWU\��,%,6:RUOG�UHSRUW��������2Q�WKH�RWKHU�KDQG��ULVLQJ�

XQHPSOR\PHQW�KDV�FDXVHG�HPSOR\PHQW�WXUQRYHU�WR�GHFOLQH�EHFDXVH�SHRSOH�DUH�KDQJLQJ�RQ�WR�WKH�MREV�WKDW�WKH\�KDYH��UDWKHU�WKDQ�ORRNLQJ�IRU�PRUH�GHVLUDEOH�

RQHV��$V�D�UHVXOW��PDQ\�¿UPV�KDYH�REWDLQHG�FRVW�VDYLQJV�UHODWHG�WR�WUDLQLQJ�DQG�UHFUXLWPHQW��7KLV�IDFWRU�KDV�PLWLJDWHG�GHFOLQHV�LQ�SUR¿WDELOLW\��ZLWK�PDUJLQV�HVWLPDWHG�WR�UHSUHVHQW������LQ�������:KLOH�SUR¿WDELOLW\�ZLOO�LPSURYH�DV�FXVWRPHUV�WKDW�KDYH�WULPPHG�EDFN�RQ�VHFXULW\�FRVWV�UHVXPH�VHUYLFHV��LQFUHDVLQJ�FRPSHWLWLRQ�IURP�GLJLWDO�DXWRPDWHG�DODUPV�LV�H[SHFWHG�UHVWUDLQ�JURZWK�GXULQJ�WKH�¿YH�\HDUV�WR������

Wages*XDUGV��SDWUROV�DQG�LQYHVWLJDWLYH�VHUYLFHV��WKH�PDMRU�DFWLYLWLHV�RI�WKLV�LQGXVWU\��DUH�KLJKO\�ODERU�LQWHQVLYH��&RQVHTXHQWO\��WKH�ODUJHVW�FRVW�IRU�WKLV�LQGXVWU\�LV�ZDJHV��,Q�������,%,6:RUOG�HVWLPDWHV�WKDW�������RI�UHYHQXH�LV�VSHQW�RQ�ZDJHV��:DJHV�KDYH�VORZO\�GHFOLQHG�DV�D�SURSRUWLRQ�RI�LQGXVWU\�UHYHQXH�RYHU�WKH�SDVW�GHFDGH��:KLOH�WKLV�LV�QRW�H[SHFWHG�WR�FKDQJH�VLJQL¿FDQWO\��WKH�LQFUHDVLQJ�XVH�RI�

Sector vs. Industry Costs

Q Profi tQ WagesQ PurchasesQ DepreciationQ MarketingQ Rent & UtilitiesQ Other

Average Costs of all Industries in sector (2012)

Industry Costs (2012)

0

20

40

60

Perc

enta

ge o

f rev

enue

80

100 6.9

17.1

4.7 2.42.913.2

52.8

8.1

22.8

3.00.6 4.03.6

57.9

SOURCE: WWW.IBISWORLD.COM

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WWW.IBISWORLD.COM Security Services in the US August 2012 20

Competitive Landscape

Basis of Competition )LUPV�LQ�WKH�6HFXULW\�6HUYLFHV�LQGXVWU\�FRPSHWH�RQ�D�YDULHW\�RI�IDFWRUV��6HFXULW\�SURYLGHUV�KDYH�IDFHG�LQFUHDVLQJ�FRPSHWLWLRQ�IURP�KLJK�WHFK�VROXWLRQV�SURYLGHG�E\�RWKHU�LQGXVWULHV��$OVR��SULFH�DQG�VHUYLFH�TXDOLW\�KDYH�EHFRPH�PRUH�LPSRUWDQW�EHFDXVH�FOLHQWV�FDQ�QHJRWLDWH�PRUH�HDVLO\��JLYHQ�WKH�XQHDV\�HFRQRPLF�FOLPDWH�

Internal competition,QWHUQDO�LQGXVWU\�FRPSHWLWLRQ�LV�ODUJHO\�EDVHG�RQ�SULFH�DQG�VHUYLFH�TXDOLW\��SDUWLFXODUO\�LQ�WKH�DUHD�RI�JXDUGV��:KHQ�LW�FRPHV�WR�VHUYLFH�TXDOLW\��FOLHQWV�W\SLFDOO\�SD\�PRUH�IRU�VSHFLDOO\�WUDLQHG�JXDUGV��VXFK�DV�WKRVH�ZKR�DUH�DOORZHG�WR�FDUU\�¿UHDUPV��&RPSDQLHV�DOVR�WU\�WR�PLQLPL]H�WKHLU�HPSOR\HH�WXUQRYHU�UDWH��KLVWRULFDOO\��WKH�LQGXVWU\�KDV�KDG�H[WUHPHO\�KLJK�WXUQRYHU�EHFDXVH�RI�XQGHVLUDEOH�ZRUN�FRQGLWLRQV��0DLQWDLQLQJ�D�ORZ�WXUQRYHU�FDQ�ORZHU�FRVWV�DVVRFLDWHG�ZLWK�WUDLQLQJ�&OLHQWV�KDYH�LQFUHDVLQJO\�ORRNHG�IRU�

¿UPV�WKDW�FDQ�SURYLGH�PRUH�YDOXH�DGGHG�VHUYLFHV��)RU�H[DPSOH��D�FOLHQW�PLJKW�QHHG�D�VHFXULW\�FRPSDQ\�WKDW�FDQ�SURYLGH�FDVK�WUDQVLW�LQ�DGGLWLRQ�WR�RQ�VLWH�JXDUG�

VHUYLFHV��6RPH�YDOXH�DGGHG�VHUYLFHV�UHTXLUH�LQYHVWPHQW�LQ�KLJK�WHFK�HTXLSPHQW��ZKLFK�FDQ�SURYLGH�D�FRPSHWLWLYH�DGYDQWDJH��)XUWKHUPRUH��KDYLQJ�QDWLRQDO�RSHUDWLRQV�FDQ�SOD\�D�GHWHUPLQLQJ�IDFWRU�ZKHQ�D�FOLHQW�FKRRVHV�D�VHFXULW\�SURYLGHU��&OLHQWV�RIWHQ�SUHIHU�ZRUNLQJ�ZLWK�RQH�FRPSDQ\�UDWKHU�WKDQ�PXOWLSOH�SURYLGHUV�

External competition([WHUQDO�FRPSHWLWLRQ�FRPHV�IURP�VXEVWLWXWLQJ�HOHFWURQLF�DODUPV��FORVHG�FLUFXLW�WHOHYLVLRQ�DQG�VHQVRUV��7KH�LQGXVWU\�DOVR�IDFHV�FRPSHWLWLRQ�IURP�WKH�6HFXULW\�$ODUP�6HUYLFHV�LQGXVWU\��,%,6:RUOG�UHSRUW���������ZLWK�VRPH�FOLHQWV�OHDYLQJ�JXDUG�VHUYLFHV�IRU�PRUH�DXWRPDWHG�IRUPV�RI�VHFXULW\��0RQLWRUHG�VHFXULW\�V\VWHPV�DUH�QRZ�D�PDMRU�FRPSHWLWRU�WR�PDQ\�RI�WKH�PRUH�ODERU�LQWHQVLYH�DUHDV��DQG�WKH\�RIWHQ�SURYLGH�D�PRUH�FRVW�HIIHFWLYH�VHFXULW\�VROXWLRQ�WR�FOLHQWV��7KLV�IDFWRU�KDV�SDUWLFXODUO\�EHHQ�WKH�FDVH�ZLWK�WKH�SURYLVLRQ�RI�PRQLWRUHG�VHFXULW\�V\VWHPV�LQ�FHQWUDO�FLWLHV�DQG�PDMRU�VXEXUEDQ�VKRSSLQJ�PDOOV��HVSHFLDOO\�LQ�SXEOLF�DUHDV�

Cost Structure Benchmarkscontinued

WHFKQRORJ\�ZLOO�UHGXFH�WKH�DPRXQW�RI�UHYHQXH�VSHQW�RQ�ZDJHV��)LUPV�ZLOO�LQYHVW�LQ�V\VWHPV�VXFK�DV�&&79�WKDW�DOORZ�WKHP�WR�PRQLWRU�PXOWLSOH�ORFDWLRQV�UHPRWHO\��%\�������,%,6:RUOG�HVWLPDWHV�WKDW�ZDJHV�ZLOO�UHSUHVHQW�������RI�LQGXVWU\�UHYHQXH�

Other,QGXVWU\�RSHUDWRUV�DUH�DOVR�VXEMHFW�WR�D�QXPEHU�RI�RWKHU�FRVWV��LQFOXGLQJ�

DGPLQLVWUDWLRQ��OHJDO�DQG�DFFRXQWLQJ�H[SHQVHV��)LUPV�PXVW�DOVR�SD\�IRU�LQVXUDQFH�DQG�OLFHQVH�IHHV��/LFHQVHV�DUH�SDUWLFXODUO\�LPSRUWDQW�IRU�DUPHG�JXDUGV�ZKR�KDYH�WR�JR�WKURXJK�DGGLWLRQDO�FHUWL¿FDWLRQ�FRXUVHV�WR�FDUU\�D�ZHDSRQ��6LPLODUO\��GLIIHUHQW�LQVXUDQFH�SROLFLHV��VXFK�DV�OLDELOLW\�LQVXUDQFH��FDQ�UHSUHVHQW�D�ODUJH�FRVW�IRU�RSHUDWRUV��HQVXULQJ�WKH�VDIHW\�RI�SHRSOH�DQG�SURSHUW\�

Level & Trend Competition in this industry is High and the trend is Increasing

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WWW.IBISWORLD.COM Security Services in the US August 2012 21

Competitive Landscape

Industry Globalization

7KH�LQGXVWU\¶V�JOREDOL]DWLRQ�LV�ORZ�DQG�LQFUHDVLQJ��,%,6:RUOG�DQDO\VLV�VXJJHVWV�WKDW�WKLV�LQGXVWU\�ZLOO�EH�VXEMHFW�WR�DQ�LQFUHDVLQJ�OHYHO�RI�JOREDOL]DWLRQ��SDUWLFXODUO\�DV�LQWHUQDWLRQDO�FRPSDQLHV�FRQWLQXH�H[SDQGLQJ�LQWR�WKH�GRPHVWLF�PDUNHW��,%,6:RUOG�HVWLPDWHV�WKDW�WKH�86�PDUNHW�DFFRXQWV�IRU�DERXW�������RI�WKH�JOREDO�VHFXULW\�VHUYLFHV�PDUNHW��

&RQVHTXHQWO\��LW�LV�DQ�DWWUDFWLYH�PDUNHW�IRU�IRUHLJQ�¿UPV��ZKLFK�RIWHQ�RSHUDWH�LQ�D�FRXQWU\�ZKHUH�WKH�LQGXVWU\�KDV�DOUHDG\�UHDFKHG�PDWXULW\�RU�PDUNHW�VDWXUDWLRQ��0DQ\�RI�WKHVH�IRUHLJQ�FRPSDQLHV��LQFOXGLQJ�*�6�3/&�DQG�6HFXULWDV�$%��KDYH�H[SDQGHG�LQWR�WKH�8QLWHG�6WDWHV�WKURXJK�WKH�DFTXLVLWLRQ�RI�GRPHVWLF�RSHUDWRUV�

Barriers to Entry 7KH�6HFXULW\�6HUYLFHV�LQGXVWU\�KDV�D�ORZ�OHYHO�RI�FRQFHQWUDWLRQ��ZLWK�WKH�WRS�IRXU�SOD\HUV�DFFRXQWLQJ�IRU�DERXW�������RI�PDUNHW�VKDUH��7KLV�FRQFHQWUDWLRQ�LQGLFDWHV�WKDW�WKHUH�DUH�QR�VLJQL¿FDQW�EDUULHUV�WR�HQWU\�EDVHG�RQ�PDMRU�SOD\HU�GRPLQDQFH��+RZHYHU��FRPSDQLHV�WKDW�DLP�WR�HQWHU�WKH�LQGXVWU\�QHHG�WR�EH�DZDUH�RI�LQFUHDVLQJ�FRPSHWLWLRQ�IURP�DODUP�FRPSDQLHV��,%,6:RUOG�UHSRUW���������7KHVH�¿UPV�ZLOO�SRVH�D�WKUHDW�WR�WKH�LQGXVWU\�DV�PRUH�FOLHQWV�ORRN�IRU�FRVW�HIIHFWLYH�DOWHUQDWLYHV�7KLV�LQGXVWU\�LV�KLJKO\�ODERU�

LQWHQVLYH��EXW�LW�KDV�PLQLPDO�FDSLWDO�UHTXLUHPHQWV��7KH�HVWDEOLVKPHQW�FRVWV��ZKLFK�DUH�W\SLFDOO\�DVVRFLDWHG�ZLWK�KLULQJ�VHFXULW\�JXDUGV��DUH�UHODWLYHO\�VPDOO��6RPH�VHUYLFH�VHJPHQWV�UHTXLUH�PRUH�FDSLWDO��VXFK�DV�WKH�SXUFKDVH�RI�DUPRUHG�WUXFNV�IRU�FDVK�WUDQVSRUW��2Q�WKH�RWKHU�KDQG��RWKHU�VHUYLFHV��LQFOXGLQJ�WKRVH�SURYLGHG�E\�ERG\JXDUGV��UHTXLUH�DOPRVW�QR�FDSLWDO�LQYHVWPHQW�

,QGXVWU\�UHJXODWLRQ�LV�OLJKW��1R�IHGHUDO�ODZV�DSSO\�WR�WKH�LQGXVWU\��EXW�VWDWH�JRYHUQPHQWV�JHQHUDOO\�UHTXLUH�D�PLQLPXP�DPRXQW�RI�WUDLQLQJ�LQ�RUGHU�WR�JHW�D�OLFHQVH��)RU�JXDUGLQJ�DQG�SDWUROOLQJ�SRVLWLRQV��WUDLQLQJ�LV�OLPLWHG�DQG�PRVW�MREV�RIIHU�ORZ�SD\�DQG�EHQH¿WV��-REV�DUH�RIWHQ�SHUIRUPHG�RQ�D�WHPSRUDU\�RU�SDUW�WLPH�EDVLV��FDXVLQJ�ODERU�WXUQRYHU�UDWHV�WR�EH�DV�KLJK�DV�������D�\HDU��+DYLQJ�DFFHVV�WR�D�VXLWDEOH�SRRO�RI�HPSOR\HHV�FDQ�SURYLGH�RSHUDWRUV�ZLWK�D�FRPSHWLWLYH�DGYDQWDJH�

Barriers to Entry checklist LevelCompetition HighConcentration LowLife Cycle Stage MatureCapital Intensity LowTechnology Change LowRegulation & Policy LightIndustry Assistance None

SOURCE: WWW.IBISWORLD.COM

Level & Trend Barriers to Entry in this industry are Low and Increasing

Level & Trend Globalization in this industry is Low and the trend is Steady

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WWW.IBISWORLD.COM Security Services in the US August 2012 22

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Major CompaniesSecuritas AB | G4S PLC | Allied Security LLC | Other Companies

71.9%Other

Securitas AB 12.6%

G4S PLC 9.7%

Allied Security LLC 5.8%SOURCE: WWW.IBISWORLD.COM

Major players(Market share)

Securitas AB (Security Services North America segment) – fi nancial performance

YearRevenue

($ million) (% change)Operating Income

($ million) (% change)

2007 3,119.7 N/C 166.2 N/C

2008 3,216.7 3.1 182.2 9.6

2009 3,098.2 -3.7 181.8 -0.2

2010 3,318.7 7.1 201.5 10.8

2011 3,460.7 4.3 196.6 -2.4

2012* 3,560.0 2.9 205.0 4.3

*EstimateSOURCE: ANNUAL REPORT AND IBISWORLD

Securitas AB Market share: 12.6% Industry Brand NamesSecuritas Security Services USA

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Major Companies

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Player Performancecontinued

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G4S PLC Market share: 9.7%

G4S PLC (North America segment) – fi nancial performance

YearRevenue

($ million) (% change)Operating Income

($ million) (% change)

2007 2,245.6 N/C 80.4 N/C

2008 2,429.0 8.2 67.4 -16.2

2009 2,496.2 2.8 78.1 15.9

2010 2,590.8 3.8 87.6 12.2

2011 2,649.6 2.3 142.7 62.9

2012* 2,726.5 2.9 146.9 2.9

*EstimateSOURCE: ANNUAL REPORT AND IBISWORLD

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WWW.IBISWORLD.COM Security Services in the US August 2012 24

Major Companies

Player Performancecontinued

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([SUHVV�6HUYLFHV��521&2��7RXFKFRP�DQG�0-0��ZLWK�WKH�ODWWHU�LQYROYHG�LQ�LQVXUDQFH�IUDXG�LQYHVWLJDWLRQV��7KH�DGGLWLRQDO�UHYHQXH�IURP�WKHVH�FRPSDQLHV�KHOSHG�UHYHQXH�JURZ������WR������ELOOLRQ��3HUIRUPDQFH�LQ�WKH�8QLWHG�6WDWHV�LPSURYHG�IURP�D�UHGXFWLRQ�LQ�QRQ�ELOOHG�RYHUWLPH�WR�FOLHQWV�DQG�VLJQL¿FDQW�VWDUW�XS�FRVWV�RQ�QHZ�JRYHUQPHQW�FRQWUDFWV��7KH�FRPSDQ\�DOVR�VXFFHVVIXOO\�QHJRWLDWHG�D�ODUJH�LPPLJUDWLRQ�PRQLWRULQJ�FRQWUDFW�DFURVV����FLWLHV��2UJDQLF�JURZWK�ZDV�������HYHQ�WKRXJK�LW�FRPPHQFHG�ZLWKGUDZDO�IURP�WKH�([HORQ�QXFOHDU�FRQWUDFW��,W�VWLOO�JHQHUDWHG�JRRG�UHYHQXH�JURZWK�IURP�DUP\�EDVHV�DQG�WKH�6DYDQQDK�5LYHU�QXFOHDU�VLWH��3UR¿W�IRU�WKH�\HDU�UHPDLQHG�VWDWLF�DW������

Player Performance $OOLHG%DUWRQ�6HFXULW\�6HUYLFHV�LV�KHDGTXDUWHUHG�LQ�.LQJ�RI�3UXVVLD��3$��DQG�LW�SURYLGHV�FRQWUDFW�VHFXULW\�RI¿FHUV�

DQG�UHODWHG�VHUYLFHV��$OOLHG%DUWRQ�LV�WKH�ODUJHVW�86�RZQHG�VHFXULW\�RI¿FHU�VHUYLFHV�FRPSDQ\��7KH�FRPSDQ\�SULPDULO\�

AlliedBarton Security Services (US segment) – fi nancial performance

YearRevenue

($ million) (% change)Operating Income

($ million) (% change)

2007 1,484.7 17.7 47.6 63.0

2008 1,607.3 8.3 59.6 25.2

2009* 1,526.9 -5.0 45.8 -23.2

2010* 1,543.7 1.1 39.0 -14.8

2011* 1,575.0 2.0 49.0 25.6

2012* 1,635.0 3.8 52.0 6.1

*EstimateSOURCE: ANNUAL REPORT AND IBISWORLD

Allied Security LLC Market share: 5.8% Industry Brand NamesAlliedBarton Security Services

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Major Companies

Player Performancecontinued

SURYLGHV�VHFXULW\�VHUYLFHV�WR�FOLHQWV�LQ�KLJK�ULVH�RI¿FH�EXLOGLQJV��FRUSRUDWH�FRPSOH[HV��VKRSSLQJ�PDOOV��EDQNV��XQLYHUVLWLHV��KRVSLWDOV�DQG�LQGXVWULDO�VLWHV��$OOLHG%DUWRQ�HPSOR\V�DERXW��������VHFXULW\�RI¿FHUV�WKDW�VHUYH�LWV�������FOLHQWV��7KH�FRPSDQ\��ZKLFK�KDV�����RI¿FHV�DFURVV�WKH�FRXQWU\��VHUYHV�DERXW�����)RUWXQH�����FRPSDQLHV�,Q�-XO\�������$OOLHG%DUWRQ�

DQQRXQFHG�WKDW�SULYDWH�HTXLW\�IXQG�%ODFNVWRQH�*URXS�ZRXOG�DFTXLUH�WKH�FRPSDQ\�LQ�D�GHDO�HVWLPDWHG�WR�EH�ZRUWK��������PLOOLRQ��$FTXLVLWLRQV�DUH�QRW�QHZ�WR�WKH�FRPSDQ\��ZKLOH�SHUIRUPDQFH�KDV�KLVWRULFDOO\�EHHQ�DWWULEXWHG�WR�WKH�JDLQ�RU�ORVV�RI�FRQWUDFWV��LWV�FRQWLQXDO�DFTXLVLWLRQ�SURJUDP�VLQFH������KDV�IXHOHG�FRPSDQ\�JURZWK��:KLOH�WKH�%ODFNVWRQH�DFTXLVLWLRQ�PD\�SURYLGH�

VWDELOLW\�LQ�DQ�XQFHUWDLQ�PDUNHW��¿QDQFLDO�LQIRUPDWLRQ�IRU�WKH�FRPSDQ\�KDV�QRW�EHHQ�UHOHDVHG�VLQFH�LWV�FRPSOHWLRQ�RI�WKH�DFTXLVLWLRQ��,%,6:RUOG�HVWLPDWHV�WKDW�$OOLHG%DUWRQ¶V�UHYHQXH�ZLOO�LQFUHDVH�DW�DQ�DQQXDOL]HG�UDWH�RI������WR������ELOOLRQ�LQ�WKH�¿YH�\HDUV�WR�������ODUJHO\�DV�D�UHVXOW�RI�DFTXLVLWLRQV�HDUO\�LQ�WKH�SHULRG�,Q�������UHYHQXH�LV�HVWLPDWHG�WR�KDYH�

LQFUHDVHG������PDLQO\�EHFDXVH�RI�QHZ�FRQWUDFWV��7KH�FRPSDQ\�ZDV�DEOH�WR�JURZ�GXULQJ�WKDW�\HDU�GHVSLWH�ORVLQJ�D�FRQWUDFW�ZLWK�WKH�VWDWH�RI�)ORULGD¶V�'HSDUWPHQW�RI�7UDQVSRUWDWLRQ�WROO�FROOHFWLRQ�VHUYLFH�LQ�0DUFK�������,Q�������WKH�FRPSDQ\¶V�UHYHQXH�LQFUHDVHG�������WR�������ELOOLRQ��SDUWO\�EHFDXVH�RI�LWV�DFTXLVLWLRQ�RI�,QLWLDO�6HFXULW\�IURP�5HQWRNLO�,QLWLDO�3/&�LQ�WKH�\HDU�SULRU�

Other Companies ,Q�DGGLWLRQ�WR�WKH�LQGXVWU\¶V�PDMRU�SOD\HUV��PDQ\�VPDOO�RSHUDWRUV�H[LVW��0RUH�WKDQ�KDOI�RI�WKH�¿UPV�RSHUDWLQJ�LQ�WKLV�LQGXVWU\�KDYH�IHZHU�WKDQ�¿YH�HPSOR\HHV��0DQ\�¿UPV�SURYLGH�PRUH�VSHFLDOL]HG�VHUYLFHV��VXFK�DV�SULYDWH�LQYHVWLJDWLRQ��6LPLODUO\��FRPSDQLHV�OLNH�%ULQN¶V�KDYH�EHHQ�DEOH�WR�JURZ�EH\RQG�WKH�VPDOO�EXVLQHVV�ODEHO�E\�RIIHULQJ�VSHFLDOL]HG��\HW�ZLGHO\�XVHG�VHUYLFHV��VXFK�DV�FDVK�WUDQVLW�

The Brink’s CompanyEstimated market share: 2.7%+HDGTXDUWHUHG�LQ�5LFKPRQG��9$��WKH�%ULQN¶V�&RPSDQ\�LV�D�JOREDO�VHFXULW\�VHUYLFHV�FRPSDQ\�ZLWK�RSHUDWLRQV�LQ�����FRXQWULHV��7KH�FRPSDQ\¶V�86�VHJPHQW�JHQHUDWHV�DERXW��������PLOOLRQ�DQQXDOO\��,WV�PDLQ�VHUYLFHV�LQFOXGH��DUPRUHG�FDU�WUDQVSRUW��$70�VHUYLFLQJ��FXUUHQF\�DQG�GHSRVLW�SURFHVVLQJ��FRLQ�VRUWLQJ�DQG�ZUDSSLQJ��VHFXUH�DLU�WUDQVSRUW�RI�YDOXDEOHV�DQG�GHSOR\LQJ�DQG�VHUYLFLQJ�RI�VDIHV�DQG�VDIH�FRQWURO�GHYLFHV��,WV�FOLHQW�EDVH�LV�ODUJHO\�GUDZQ�

IURP�EDQNV��LQGXVWULDO�DQG�FRPPHUFLDO�EXVLQHVVHV��LQYHVWPHQW�EDQNLQJ�DQG�EURNHUDJH�¿UPV��DQG�JRYHUQPHQW�DJHQFLHV��5HWDLO�FXVWRPHUV�XVH�WKHLU�VHUYLFHV�WR�FRXQW�DQG�UHFRQFLOH�FRLQV�DQG�FXUUHQF\��SUHSDUH�EDQN�GHSRVLW�LQIRUPDWLRQ�DQG�VXSSO\�FRLQV�DQG�FXUUHQF\�LQ�UHTXLUHG�GHQRPLQDWLRQV�%ULQN¶V�KDV�UHFHQWO\�XQGHUJRQH�VRPH�

VWUXFWXUDO�FKDQJHV��7KH�FRPSDQ\�KDV�IRFXVHG�RQ�VHOOLQJ�VRPH�RI�LWV�SUHYLRXVO\�KHOG�VHJPHQWV�WR�EHFRPH�D�VHFXULW\�RQO\�¿UP��'HVSLWH�WKLV�IRFXV��%ULQN¶V�VSXQ�RII�%ULQN¶V�+RPH�6HFXULW\�+ROGLQJV�LQ�2FWREHU�������7KH�VHJPHQW�KDG�EHHQ�WKH�WKLUG�ODUJHVW�UHVLGHQWLDO�PRQLWRULQJ�VHUYLFHV�RSHUDWRU�LQ�1RUWK�$PHULFD�

Loomis ABEstimated market share: 2.3%/LNH�%ULQN¶V��/RRPLV�ODUJHO\�RSHUDWHV�LQ�WKH�VSHFLDOL]HG�FDVK�KDQGOLQJ�DQG�WUDQVLW�PDUNHW��/RRPLV��ZKLFK�RSHUDWHV�DFURVV�(XURSH�DQG�WKH�8QLWHG�6WDWHV��¿QLVKHG�LWV�¿UVW�IXOO�\HDU�DV�D�VWRFN�H[FKDQJH�OLVWHG�FRPSDQ\�LQ�������3UHYLRXVO\��

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Major Companies

Other Companiescontinued

/RRPLV�KDG�EHHQ�D�GLYLVLRQ�RI�6HFXULWDV��ZKLFK�SXUFKDVHG�WKH�FRPSDQ\�IRU��������PLOOLRQ�LQ�������,Q�'HFHPEHU�������/RRPLV�ZDV�VSXQ�RII�IURP�

6HFXULWDV�ZLWK�VKDUHV�GLVWULEXWHG�WR�VKDUHKROGHUV��7KH�FRPSDQ\�LV�HVWLPDWHG�WR�JHQHUDWH�DERXW������PLOOLRQ�DQQXDOO\�LQ�LQGXVWU\�UHODWHG�UHYHQXH�

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Capital Intensity 7KLV�LQGXVWU\�UHTXLUHV�D�ORZ�OHYHO�RI�FDSLWDO�LQYHVWPHQW�EHFDXVH�DOO�RI�LWV�PDMRU�DFWLYLWLHV�LQYROYH�D�KLJK�GHJUHH�RI�GLUHFW�ODERU�LQSXW��:KLOH�VXEVWDQWLDO�LQYHVWPHQW�PXVW�EH�PDGH�IRU�VRPH�VHUYLFHV��VXFK�DV�WKH�SXUFKDVH�RI�DUPRUHG�WUXFNV�IRU�FDVK�WUDQVSRUW��WKH�PDMRULW\�RI�UHYHQXH�LV�GHULYHG�IURP�ODERU�LQWHQVLYH�VHUYLFHV�0RVW�LQGXVWU\�HPSOR\HHV�PXVW�

FRPSOHWH�D�PLQLPDO�DPRXQW�RI�WUDLQLQJ�FRPSDUHG�ZLWK�RWKHU�VHUYLFH�LQGXVWULHV��'HVSLWH�WKLV�IDFWRU��ZDJHV�DUH�WKH�ODUJHVW�FRVW�IRU�RSHUDWRUV��DFFRXQWLQJ�IRU�������RI�UHYHQXH�LQ�������/DERU�FRVWV�FRPH�LQ�WKH�IRUP�RI�JXDUGV��LQYHVWLJDWLYH�ZRUN�DQG�FRUSRUDWH�HPSOR\HHV��,%,6:RUOG�

HVWLPDWHV�WKDW�IRU�HYHU\�GROODU�VSHQW�RQ�WKH�XVH�DQG�UHSODFHPHQW�RI�EXLOGLQJ�DQG�HTXLSPHQW�LQ��������������LV�

Operating ConditionsCapital Intensity | Technology & Systems | Revenue VolatilityRegulation & Policy | Industry Assistance

Tools of the Trade: Growth Strategies for Success

SOURCE: WWW.IBISWORLD.COM

Labo

r Int

ensiv

eCapital Intensive

Change in Share of the Economy

New Age EconomyRecreation, Personal Services, Health and Education. Firms benefi t from personal wealth so stable macroeconomic conditions are imperative. Brand awareness and niche labor skills are key to product differentiation.

Traditional Service EconomyWholesale and!Retail. Reliant on labor!rather than capital to sell goods. Functions cannot be outsourced therefore fi rms must use new technology or improve staff training to increase revenue growth.

Old EconomyAgriculture and Manufacturing. Traded goods can be produced using cheap labor abroad. To expand fi rms must merge or acquire others to exploit economies of scale, or specialize in niche, high-value products.

Investment EconomyInformation, Communications, Mining, Finance and Real Estate. To increase revenue fi rms need superior debt management, a stable macroeconomic environment and a sound investment plan.

Credit Bureaus & Rating Agencies

Audio & Video Equipment Manufacturing

Security Alarm Services

Electronic & Computer Repair Services Non-Hotel Casinos

Security Services

Capital intensity

0.5

0.0

0.1

0.2

0.3

0.4

SOURCE: WWW.IBISWORLD.COMDotted line shows a high level of capital intensity

Capital units per labor unit

Security Services

Administration, Business Support & Waste

Management Services

Economy

Level The level of capital intensity is Low

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Operating Conditions

Revenue Volatility )ROORZLQJ�WKH�UHFHVVLRQ��LQGXVWU\�RSHUDWRUV�H[SHULHQFHG�D�GHFOLQH�LQ�GHPDQG�DV�EXVLQHVVHV�UHGXFHG�WKHLU�VHFXULW\�EXGJHWV��0DQ\�FOLHQWV�VWDUWHG�XVLQJ�PRUH�FRVW�HIIHFWLYH�DOWHUQDWLYHV��RU�WKH\�UHGXFHG�WKHLU�XVH�RI�VHFXULW\�JXDUGV��)XUWKHUPRUH��VRPH�FRPSDQLHV�WKDW�XVHG�VHFXULW\�VHUYLFHV�ZHQW�RXW�RI�EXVLQHVV��KXUWLQJ�WKH�LQGXVWU\��7KH�ULVH�LQ�EDQNUXSWFLHV�UHGXFHG�UHYHQXH�DQG�GHPDQG�GXULQJ�

������DQG������E\�OLPLWLQJ�WKH�QXPEHU�RI�SRWHQWLDO�FOLHQWV�$OWKRXJK�UHYHQXH�GHFOLQHG�LQ�

UHVSRQVH�WR�WKH�UHFHVVLRQ��LW�KDV�RQFH�DJDLQ�VWDUWHG�JURZLQJ��1HYHUWKHOHVV��UHYHQXH�YRODWLOLW\�KDV�UHPDLQHG�UHODWLYHO\�ORZ�RYHU�WKH�SDVW�¿YH�\HDUV��7KLV�WUHQG�LV�ODUJHO\�EHFDXVH�EXVLQHVVHV�DQG�JRYHUQPHQW�ERGLHV�KDYH�LQFUHDVHG�WKHLU�VHFXULW\�RXWVRXUFLQJ��KHOSLQJ�PLWLJDWH�WKH�ORVVHV�FDXVHG�E\�D�VORZLQJ�

Technology& Systems

,%,6:RUOG�DQDO\VLV�LQGLFDWHV�WKDW�WKH�LQGXVWU\�KDV�H[SHULHQFHG�PLQLPDO�WHFKQRORJLFDO�FKDQJH�LQ�UHFHQW�\HDUV��1HYHUWKHOHVV��FRPPXQLFDWLRQV��VXUYHLOODQFH��DODUP�DQG�DOHUW�HTXLSPHQW�DUH�LQFUHDVLQJO\�EHLQJ�XVHG�WR�VXSSRUW�WUDGLWLRQDO�JXDUGLQJ�DQG�SDWURO�VHUYLFHV��6HFXULW\�JXDUGV�DUH�DOVR�EHLQJ�HTXLSSHG�ZLWK�D�ZLGHU�DUUD\�RI�HTXLSPHQW��LQFOXGLQJ�SHSSHU�VSUD\�DQG�VWXQ�JXQV�6HFXULW\�SURYLGHUV�QHHG�WR�EH�

DZDUH�RI�H[LVWLQJ�DQG�HPHUJLQJ�

WHFKQRORJLHV�WR�HYDOXDWH�DQG�SURYLGH�DSSURSULDWH�VROXWLRQV�WR�FOLHQWV��7KHVH�WHFKQRORJLHV�LQFOXGH�DODUP�PRQLWRULQJ��&&79�DQG�HPHUJLQJ�ELRPHWULFV�SURGXFWV��H�J��¿QJHUSULQW�VFDQQHUV��UHWLQD�UHFRJQLWLRQ�DQG�DFFHVV�V\VWHPV���$OVR��SURYLGHUV�LQFUHDVLQJO\�XVH�VDWHOOLWH�WHFKQRORJ\��LQFOXGLQJ�YHKLFOH�LPPRELOL]DWLRQ�V\VWHPV�DQG�JOREDO�SRVLWLRQLQJ�V\VWHPV��*36��IRU�FDVK�KDQGOLQJ�YHKLFOHV�

Capital Intensitycontinued

VSHQW�RQ�ODERU��$V�VXFK��WKLV�LQGXVWU\�LV�GHHPHG�WR�KDYH�D�KLJK�OHYHO�RI�ODERU�LQWHQVLW\��+RZHYHU��GXULQJ�WKH�

¿YH�\HDUV�WR�������ODERU�LQWHQVLW\�LV�SURMHFWHG�WR�GHFUHDVH�DV�¿UPV�LQYHVW�LQ�PRUH�DXWRPDWHG�WHFKQRORJLHV�

Level The level of Technology Change is Low

SOURCE: WWW.IBISWORLD.COM

Volatility vs Growth

Reve

nue

vola

tility

* (%

)

1000

100

10

1

0.1

Five year annualized revenue growth (%)–30 –10 10 30 50 70

Hazardous

Stagnant

Rollercoaster

Blue Chip

* Axis is in logarithmic scale

Security Services

A higher level of revenue volatility implies greater industry risk. Volatility can negatively affect long-term strategic decisions, such as the time frame for capital investment.

When a fi rm makes poor investment decisions it may face underutilized capacity if demand suddenly falls, or capacity constraints if it rises quickly.

Level The level of Volatility is Low

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Operating Conditions

Industry Assistance 7KH�'HSDUWPHQW�RI�+RPHODQG�6HFXULW\�SURYLGHV�D�V\VWHP�RI�ULVN�DQG�OLDELOLW\�PDQDJHPHQW�EHQH¿WV�WR�FHUWL¿HG�SURYLGHUV�RI�DQWL�WHUURULVP�SURGXFWV�DQG�VHUYLFHV�XQGHU�LWV�6XSSRUW�$QWL�WHUURULVP�E\�)RVWHULQJ�(IIHFWLYH�7HFKQRORJLHV�

�6$)(7<��$FW��7KH�$FW�DOVR�SURYLGHV�WKLUG�SDUW\�OLDELOLW\�LPPXQLW\�IURP�FODLPV�WKDW�DULVH�IURP�WHUURULVP�DFWV�ZLWKLQ�WKH�8QLWHG�6WDWHV��7KH�SURWHFWLRQ�IURP�WKLUG�SDUW\�OLDELOLW\�H[WHQGV�WR�WKH�¿UP¶V�VXEFRQWUDFWRUV�DQG�FOLHQWV�

Regulation & Policy :KLOH�PRVW�VWDWHV�UHTXLUH�D�OLFHQVH�WR�RSHUDWH�DV�D�VHFXULW\�RI¿FHU��WKH�UHJXODWLRQ�RI�WKH�6HFXULW\�6HUYLFHV�LQGXVWU\�YDULHV�IURP�VWDWH�WR�VWDWH��1R�IHGHUDO�ODZV�DSSO\�WR�WKLV�LQGXVWU\��+RZHYHU��JXDUGV�ZKR�FDUU\�JXQV�PXVW�XQGHUJR�WUDLQLQJ�DQG�EDFNJURXQG�FKHFNV��$UPHG�JXDUGV�KDYH�TXLFNO\�EHFRPH�WKH�QRUP�LQ�WKH�DUPRUHG�FDU�VHUYLFHV�VHJPHQW��:LWKLQ�WKH�VHFXULW\�JXDUG�VHJPHQW��JXDUGV�KDYH�WKH�VDPH�SRZHU�DV�RUGLQDU\�FLWL]HQV�UHJDUGLQJ�FLWL]HQ¶V�DUUHVW��7KHUHIRUH��SHRSOH�ZKR�DUH�DSSUHKHQGHG�E\�VHFXULW\�JXDUGV�DUH�QRW�WDNHQ�WR�MDLO�XQOHVV�ORFDO�ODZ�HQIRUFHPHQW�LV�FRQWDFWHG�7KH�DPRXQW�RI�WUDLQLQJ�UHTXLUHG�WR�

EHFRPH�D�VHFXULW\�RI¿FHU�DOVR�YDULHV�EHWZHHQ�VWDWHV��)RU�LQVWDQFH��$ODVND�UHTXLUHV����KRXUV�RI�WUDLQLQJ��ZKLOH�

PDQ\�RWKHU�VWDWHV�UHTXLUH�DV�OLWWOH�DV�IRXU�WR�HLJKW�KRXUV��6RPH�MXULVGLFWLRQV��LQFOXGLQJ�WKH�'LVWULFW�RI�&ROXPELD��GR�QRW�UHTXLUH�DQ\�WUDLQLQJ�IRU�XQDUPHG�JXDUGV��)XUWKHUPRUH��XQDUPHG�JXDUGV�GR�QRW�KDYH�WR�EH�OLFHQVHG�LQ����VWDWHV�RU�XQGHUJR�HPSOR\HH�EDFNJURXQG�FKHFNV�LQ����/LFHQVH�IHHV�DSSO\�WR�WKLV�LQGXVWU\�

DFURVV�PRVW�VWDWHV��LQFOXGLQJ�&DOLIRUQLD��1HZ�-HUVH\�DQG�2NODKRPD��)HHV�DUH�OHYLHG�LQ�OLQH�ZLWK�FRVWV�DVVRFLDWHG�ZLWK�SURFHVVLQJ�DSSOLFDWLRQV��EDFNJURXQG�FKHFNV�DQG�RWKHU�LQTXLULHV��LQFOXGLQJ�ZLWK�WKH�)%,��$UPHG�JXDUGV�PD\�DOVR�EH�UHTXLUHG�WR�WDNH�D�SV\FKRORJLFDO�WHVW��)LUPV�PXVW�DOVR�SD\�D�YDULHW\�RI�HPSOR\PHQW�DQG�SD\UROO�WD[HV��ZKLFK�FDQ�EH�TXLWH�KHIW\��JLYHQ�WKH�KLJK�SHUFHQWDJH�RI�UHYHQXH�WKDW�LV�VSHQW�RQ�ZDJHV�

Revenue Volatilitycontinued

HFRQRP\��)XUWKHUPRUH��WKH�LQGXVWU\�FRQWLQXHV�WR�EHQH¿W�IURP�WKH�SXEOLF¶V�IHDU�RI�IXWXUH�WHUURULVW�DWWDFNV��,Q�WKH�¿YH�\HDUV�WR�������,%,6:RUOG�HVWLPDWHV�WKDW�WKH�LQGXVWU\¶V�\HDU�RQ�\HDU�UHYHQXH�

FKDQJHV�DYHUDJHG������DQQXDOO\��'XULQJ�WKDW�SHULRG�RI�WLPH��LQGXVWU\�UHYHQXH�LV�H[SHFWHG�WR�JURZ�E\�DV�PXFK�DV������LQ������DQG�KDV�GHFOLQHG�E\�DV�PXFK�DV������LQ������

Level & Trend The level of Regulation is Light and the trend is Increasing

Level & Trend The level of Industry Assistance is None and the trend is Steady

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Key StatisticsRevenue

($m)

Industry Value Added

($m)Establish-

ments Enterprises Employment Exports ImportsWages ($m)

Domestic Demand

Number of Businesses With Employees

(Million)2003 25,317.6 18,426.5 54,500 40,573 666,497 -- -- 15,034.0 N/A 7.32004 25,839.6 18,752.0 55,154 40,978 692,761 -- -- 15,289.5 N/A 7.42005 26,533.9 19,557.6 55,816 41,388 706,819 -- -- 16,002.1 N/A 7.52006 27,616.4 20,021.1 56,374 41,760 716,075 -- -- 16,375.7 N/A 7.62007 28,517.6 20,464.1 56,938 42,178 721,876 -- -- 16,756.8 N/A 7.72008 27,771.0 19,759.0 57,379 42,629 725,119 -- -- 16,343.3 N/A 7.62009 26,407.7 18,675.5 55,601 41,459 701,074 -- -- 15,506.6 N/A 7.52010 26,852.5 18,823.6 55,329 41,352 700,920 -- -- 15,735.6 N/A 7.62011 27,394.3 19,296.5 55,250 41,201 699,585 -- -- 16,036.6 N/A 7.62012 28,189.0 19,732.3 54,853 40,874 703,034 -- -- 16,321.4 N/A 7.72013 29,649.2 20,585.4 55,829 41,509 709,387 -- -- 16,997.9 N/A 7.92014 30,988.7 21,341.9 57,144 42,424 728,836 -- -- 17,592.3 N/A 8.02015 32,318.6 22,080.1 57,898 42,919 738,638 -- -- 18,137.2 N/A 8.12016 33,216.8 22,896.3 60,089 44,544 771,052 -- -- 18,810.7 N/A 8.22017 34,628.0 23,799.8 62,549 46,402 798,570 -- -- 19,540.6 N/A 8.3Sector Rank 8/26 6/26 6/26 6/26 6/26 N/A N/A 6/26 N/A N/AEconomy Rank 275/706 129/706 108/705 121/705 54/706 N/A N/A 89/706 N/A N/A

IVA/Revenue (%)

Imports/Demand

(%)Exports/Revenue

(%)

Revenue per Employee

($’000)Wages/Revenue

(%)Employees

per Est.Average Wage

($)

Share of the Economy

(%)2003 72.78 N/A N/A 37.99 59.38 12.23 22,556.74 0.162004 72.57 N/A N/A 37.30 59.17 12.56 22,070.38 0.152005 73.71 N/A N/A 37.54 60.31 12.66 22,639.60 0.152006 72.50 N/A N/A 38.57 59.30 12.70 22,868.69 0.152007 71.76 N/A N/A 39.50 58.76 12.68 23,212.85 0.152008 71.15 N/A N/A 38.30 58.85 12.64 22,538.78 0.152009 70.72 N/A N/A 37.67 58.72 12.61 22,118.35 0.152010 70.10 N/A N/A 38.31 58.60 12.67 22,449.92 0.142011 70.44 N/A N/A 39.16 58.54 12.66 22,923.02 0.142012 70.00 N/A N/A 40.10 57.90 12.82 23,215.66 0.152013 69.43 N/A N/A 41.80 57.33 12.71 23,961.39 0.152014 68.87 N/A N/A 42.52 56.77 12.75 24,137.53 0.152015 68.32 N/A N/A 43.75 56.12 12.76 24,554.92 0.152016 68.93 N/A N/A 43.08 56.63 12.83 24,396.15 0.152017 68.73 N/A N/A 43.36 56.43 12.77 24,469.49 N/ASector Rank 5/26 N/A N/A 24/26 5/26 11/26 23/26 6/26Economy Rank 24/706 N/A N/A 684/706 15/706 367/705 597/706 129/706

Figures are inflation-adjusted 2012 dollars. Rank refers to 2012 data.

Revenue (%)

Industry Value Added

(%)

Establish-ments

(%)Enterprises

(%)Employment

(%)Exports

(%)Imports

(%)Wages

(%)

Domestic Demand

(%)

Number of Businesses With Employees

(%)2004 2.1 1.8 1.2 1.0 3.9 N/A N/A 1.7 N/A 1.42005 2.7 4.3 1.2 1.0 2.0 N/A N/A 4.7 N/A 1.42006 4.1 2.4 1.0 0.9 1.3 N/A N/A 2.3 N/A 1.32007 3.3 2.2 1.0 1.0 0.8 N/A N/A 2.3 N/A 1.32008 -2.6 -3.4 0.8 1.1 0.4 N/A N/A -2.5 N/A -1.32009 -4.9 -5.5 -3.1 -2.7 -3.3 N/A N/A -5.1 N/A -1.32010 1.7 0.8 -0.5 -0.3 0.0 N/A N/A 1.5 N/A 1.32011 2.0 2.5 -0.1 -0.4 -0.2 N/A N/A 1.9 N/A 0.02012 2.9 2.3 -0.7 -0.8 0.5 N/A N/A 1.8 N/A 1.32013 5.2 4.3 1.8 1.6 0.9 N/A N/A 4.1 N/A 2.62014 4.5 3.7 2.4 2.2 2.7 N/A N/A 3.5 N/A 1.32015 4.3 3.5 1.3 1.2 1.3 N/A N/A 3.1 N/A 1.32016 2.8 3.7 3.8 3.8 4.4 N/A N/A 3.7 N/A 1.22017 4.2 3.9 4.1 4.2 3.6 N/A N/A 3.9 N/A 1.2Sector Rank 19/26 20/26 24/26 24/26 23/26 N/A N/A 17/26 N/A N/AEconomy Rank 299/706 402/706 528/705 511/705 491/706 N/A N/A 356/706 N/A N/A

Annual Change

Key Ratios

Industry Data

SOURCE: WWW.IBISWORLD.COM

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WWW.IBISWORLD.COM Security Services in the US August 2012 31

Jargon & Glossary

BARRIERS TO ENTRY Barriers to entry can be High, Medium or Low. High means new companies struggle to enter an industry, while Low means it is easy for a firm to enter an industry.CAPITAL/LABOR INTENSITY An indicator of how much capital is used in production as opposed to labor. Level is stated as High, Medium or Low. High is a ratio of less than $3 of wage costs for every $1 of depreciation; Medium is $3 – $8 of wage costs to $1 of depreciation; Low is greater than $8 of wage costs for every $1 of depreciation.CONSTANT PRICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using 2012 as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the ‘real’ growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.DOMESTIC DEMAND The use of goods and services within the US; the sum of imports and domestic production minus exports.EARNINGS BEFORE INTEREST AND TAX (EBIT) IBISWorld uses EBIT as an indicator of a company’s profitability. It is calculated as revenue minus expenses, excluding tax and interest.EMPLOYMENT The number of working proprietors, partners, permanent, part-time, temporary and casual employees, and managerial and executive employees.ENTERPRISE A division that is separately managed and keeps management accounts. The most relevant measure of the number of firms in an industry.ESTABLISHMENT The smallest type of accounting unit within an Enterprise; usually consists of one or more locations in a state or territory of the country in which it operates.EXPORTS The total sales and transfers of goods produced by an industry that are exported.IMPORTS The value of goods and services imported with the amount payable to non-residents.

INDUSTRY CONCENTRATION IBISWorld bases concentration on the top four firms. Concentration is identified as High, Medium or Low. High means the top four players account for over 70% of revenue; Medium is 40 –70% of revenue; Low is less than 40%.INDUSTRY REVENUE The total sales revenue of the industry, including sales (exclusive of excise and sales tax) of goods and services; plus transfers to other firms of the same business; plus subsidies on production; plus all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); plus capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded.INDUSTRY VALUE ADDED The market value of goods and services produced by an industry minus the cost of goods and services used in the production process, which leaves the gross product of the industry (also called its Value Added).INTERNATIONAL TRADE The level is determined by: Exports/Revenue: Low is 0 –5%; Medium is 5 –20%; High is over 20%. Imports/Domestic Demand: Low is 0 –5%; Medium is 5 –35%; and High is over 35%.LIFE CYCLE All industries go through periods of Growth, Maturity and Decline. An average life cycle lasts 70 years. Maturity is the longest stage at 40 years with Growth and Decline at 15 years each.NON-EMPLOYING ESTABLISHMENT Businesses with no paid employment and payroll are known as non-employing establishments. These are mostly set-up by self employed individuals.VOLATILITY The level of volatility is determined by the percentage change in revenue over the past five years. Volatility levels: Very High is greater than ±20%; High Volatility is between ±10% and ±20%; Moderate Volatility is between ±3% and ±10%; and Low Volatility is less than ±3%.WAGES The gross total wages and salaries of all employees of the establishment.

Industry Jargon

IBISWorld Glossary

BIOMETRICS A technology that involves the use of face, fingerprint or similar recognition of individuals to allow secure access.

CLOSED-CIRCUIT TELEVISION (CCTV) A technology that uses video surveillance equipment to transmit images to a specific set of monitors.MONITORED SECURITY SYSTEM A security system that involves the use of video, such as CCTV systems.

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