Business review
Experian: overview
Nature of business
Experian is a global leader in providing information solutions to organisations and consumers. It helps organisations to find, develop and manage customer relationships by providing information, decision-making solutions and processing services. It also helps consumers to understand, manage and protect their personal information and provides valuable information to help them make more informed purchasing decisions. Experian sells to clients in more than 60 countries.
It has four main areas of activity:
- Credit: providing data
and solutions to help corporate clients with decision making for
credit purposes;
- Marketing: providing data
and solutions to help corporate clients with decision making for
marketing purposes;
- Outsourcing: supporting
corporate clients in process tasks; and
- Interactive: providing consumers with valuable information to make more informed financial and purchasing decisions.
Experian’s databases are the foundation of its business, with its solutions (proprietary analytics, software and systems) providing further value for clients by automating decision making.
Additional detailed information on Experian is available in “Explaining Experian” which is on the GUS website, www.gusplc.com.
Markets in which Experian operates
Experian has a widespread and balanced portfolio by product type, by vertical market served and by country served. As examples:
- in the year to 31 March 2006, the breakdown
of sales was Credit (47%), Marketing (25%), Outsourcing (8%) and
Interactive (20%);
- financial services clients account for 55%
of sales, followed by 12% in direct-to-consumer, 11% for retail
and home shopping, 7% from telecomms, utilities and insurance and
the balance from automotive, government, publishing and media;
- it employs over 12,600 people in 28 countries;
- it owns and operates consumer credit bureaux
in 12 countries and business credit bureaux in 6 countries; and
- it classifies one billion consumers by sociodemographic type in 25 countries around the world.
Experian as a whole is dependent on the economic environment in which it operates but its broad portfolio of products and markets served gives it some resilience should its major markets weaken. New products also affect Experian’s performance, as does its success in gaining share in its chosen markets. “Explaining Experian” details some of the economic indicators that Experian monitors.
Growth drivers
Experian is well-positioned to benefit from a number of key drivers of long-term growth, including expansion in:
- the direct-to-consumer market and online advertising;
- consumer credit and card usage;
- multi-channel marketing;
- fraud prevention;
- vertical markets such as automotive and government;
and
- emerging markets such as Asia Pacific and Eastern Europe.
Competitive position
Experian’s competition varies by product and market, as summarised below:
- Credit information: there are two other national
consumer credit bureaux in the US (Equifax and TransUnion). In the
UK, Experian is the clear market leader in consumer credit with
mainly local competition elsewhere. Dun & Bradstreet is the
only global business credit competitor;
- Credit solutions: the market leader in the
US is Fair Isaac; outside the US, Experian is the major player,
facing mainly fragmented local competition;
- Marketing: there are some large competitors
in the US (such as Acxiom and Harte-Hanks) but competition elsewhere
is local, fragmented and often specialist; and
- Interactive: Experian is the clear market leader in selling credit reports direct to consumers ahead of Equifax, TransUnion, Fair Isaac and other specialist providers. The online lead generation market is fragmented and Experian has strong market positions in its areas of operation.
Experian is able to compete effectively with the competition in any one of its business areas. However, its ability to offer more products and solutions in more countries around the world is a real competitive advantage. Experian can offer its clients a one-stop shop for many of their information and solutions needs. This is increasingly important as many of its existing clients expand into emerging markets and wish to use the same tools as they do in their established markets.
Corporate objectives and strategy
Experian’s vision is to use its people, data and technology to become a necessary part of every major consumer economy around the world. It has a clear strategy to capitalise on these opportunities by:
- building on its core businesses, by, for example,
selling additional products into the existing customer base. A good
example is where financial services clients who have historically
bought credit products from Experian then buy marketing data and
analytics;
- selling new value-added solutions. Experian
helps improve clients’ decision-making processes through the provision
of software and analytics. These solutions are often implemented
into the clients’ processing systems and incorporate Experian’s
data, as well as other information; and
- growing by complementary acquisitions, which bring new products, new data or entry into new vertical or regional markets, while leveraging the core assets of Experian. This often enables Experian to accelerate the rate of growth of acquired companies by sharing expertise across the business.
