Introduction
A management consulting firm works with both global and domestic clients with its major aims being to identify, solve as well as improve complex organizational, business and operational issues and processes. Although the task is highly demanding, it has also associated long-term benefits as well as other career perquisites. The business is open to greater opportunities of working with senior executives within organizations hence cultivating and building a supportive connection. Some of the major activities to be undertaken by the firm include:
Operational specializations and expertise
This provides market counsel as well as functional expertise in some of the specialized areas such as risk management, governance, change management, talent managing, leadership and human resources just to highlight a few.
Assessment and objective
The business will serve as an objective third party in conducting an in-depth study and analysis. Thereafter, using the research findings it will avail unbiased perspective and opinion on hard and complicated business problems.
Project management
In this role, management consulting will operate directly with the top leadership as well as internal project groups in providing services related to headship consulting and project management. This will entail project execution and evaluation. It has been clear through experience acquired in the army that the mindset that one has on management consulting really matters if one wants to make difference. Whether from my personal experiences or out of the success of those I have worked with, it is clear that the mindset that one has for this kind of business is critical in determining success (Teo, 2019). However, it is important to recognize the ability of rival firms in limiting business success in spite of a positive mindset.
To be outstanding in the industry, it is required that the firm develops either defensive or offensive action. This will help in attaining a defendable place against several competing forces and realizing a desirable return from investment. Although the business may have diverse strengths as well as weaknesses, there are common competitive advantages that every successful business needs to possess for success: differentiation, focus, and low cost.
The business will work to ensure it becomes a low-cost service provider in the market and with a given mark of quality. This will help in attracting clients based on price or cost. The strategy will be highly significant considering the sensitivity of most of the clients, especially on price. This will be achieved by making the low cost to be the major theme in the whole enterprise strategy. My business will aim at selling its management products at an average price to gain more than competitors or below the industry price to attain a higher market share. This will be realized by making maximum outsourcing of all necessary resources at low cost combined with vertically integrated resolutions. Outsourcing helps in gaining a desirable unique large access to low-cost materials (Bolisani & Bratianu, 2018).
Moreover, avoiding some of the unnecessary costs in running business will help in lowering costs hence reducing general prices of services for the client. Applying Porter’s idea on low cost, the firm will vigorously make the pursuit of low cost by ensuring tight cost measures. This involves minimizing cost in areas such as advertising, study, and development. To attain full realization of this aims, the business will employ frequent as well as detailed control of reports and offer incentives on the basis of meeting stringent qualitative goals.
In spite of the above analytical strategies to increase market share, the business is not ignorant of the possible risk factors associated with the strategy. In this regard, research has established that change in technology that ignores all past savings on learning may curtail the effort of the firm. This brings the need of continually upgrading to ensure business activities remains updated. Additionally, low cost discovery particularly by competing followers through such things as ability to invest and imitation possess greater risk of failing to attain required market share. In addition, the business might be placed at a risk of failing to realize changes in industry and market need due to increased attention on cost.
This gives the need of continually engaging in market research to determine required products. The general effect of inflation is known for narrowing the business ability to keep required differential price needed to outshine competitors’ service image. Therefore, the firm’s ability to overcome some of the controllable limitations highlighted here will cause it to maintain its sharp cutting edge in the industry and for a considerable longer period.
Product differentiation is another exemplary strategy that the business will embrace to attain necessary competitive advantage. This seeks to avail unique services with unique results in the market. The strategy will be applied based on the fact that customers tend to prefer products with unique attributes regardless of the premium price of the product (Nguyen, 2017). The business will concentrate more on ensuring its services are differentiated so as to attain the class leader position in the industry. In this regard, we shall focus in differentiating our products in terms of quality and taste to clients. Other forms of product differentiation will include dealer connection, client service alongside other viable dimensions.
The strategy aims at attaining the general brand loyalty from clients with considerable minimal or no sensitivity to price. The practice may not necessarily results to increased market share. Instead, it might result to increase profit margins. The practice might also bring about higher cost especially if the activities involved in bring about differentiation are costly. Such practices include increased client support, extensive research, as well as good quality material.
However, the practice is likely to face various limitations: imitations from competing firms tend to reduce firm’s uniqueness of service (Jamoza & Oloko, 2018). Moreover, changes in clients taste together with the unwillingness of clients to go for differentiated product may become a big barrier to the success of firm.
Finally the business has a broad option of narrowing the segment of customer service by either using product differentiation or cost advantage approach. This is based on the premise that concentrating and serving a specific target can provide better services to the group (Kamran, 2019). In this regard, the firm will aim at meeting the needs of top and good performing organizations or those wishing to better their performance to the peak.
One of the major risks associated with the strategy is that the firm is likely to attract main competitors that were waiting for the business to test the market. In addition, there other common risk of imitation as well as change in the target industry. Moreover, adopting this strategy the business is at risk of competitors moving carving out to segments that attract more clients.
The table below demonstrates the common strategies available for the business to undertake, the necessary resources and skills as well as general business requirements for each approach.
Porter’s Five Forces
The use of porter’s five forces model is a holistic scheme that takes strategic ideas far from evaluating the existing competition in the industry. It attempts to build on how the business can attain a competitive advantage in the industry. In light of new entrant threats, upcoming businesses have already developed unique ways of doing things hence requiring the business to attain higher standards for fair competition. This has brought about the need of challenge management to maintain competitive edge against other competing firms. This can also be liftedby working to realize economies of scale that will help in minimizing per unit cost. In addition, it is necessary to be innovative on new services and products.
In view of negotiation power of supplier, it is clear that most of the management firms have multiple supplies all with diverse negotiating abilities. Therefore, there is need to establish a robust supply chain by using many suppliers.Buyers also are in many cases so demanding with desire to get the best service offer by the least price available as possible. To curd this, the organization needs to establish a huge base of clients to minimize their bargaining strength. In addition, this will help business to stream its proceeds as well as delivery process. To overcome threat of available substitute in the industry, the firm will aim at giving special attention to service delivery to attract more clients through quality service. Moreover, it is required to try to understand the major need of the client rather than what they can pay for.
SWOT Analysis
Just like any other firm in the market, the business has several strengths and weaknesses.
Its major strength includes
- Highly promising market strategies for its services
- Reliable suppliers hence overcome shortcoming associated with supply chain restrictions (Puyt, et al., 2020).
- Highly skilled workers with innovative strategies of advertising and other ways of reaching potential clients
Weaknesses include
- Need more capital to incorporate new technologies in service delivery.
- The existing investment in research is below the highly growing players in the market.
- Limited abilities to succeed outside its main business
The business is also surrounded by several opportunities as well as threats in the outside market:
Opportunities
- Emerging trends in client’s behavior is likely to create more market for the business. This will provide opportunity for product diversification.
- Low inflationary rate is likely to make the business more stable in the industry. This is due to low interest rates charged on business credit.
- The new low taxation policies are likely to open ways of doing business through new opportunities hence increasing its profit margin.
Threats
- New technology adopted by competitors is likely to interfere with industry for a long term.
- The company is likely to be faced with currency fluctuations due to changing political situations (Habimana, et al., 2018).
- Continued shortage of skilled workforce in the global market poses major threat to continuous growth of the firm.
A value chain process is based on the notion that a consulting firm is a system with transforming parts, input as well as output. Below is an illustration of the consulting business value chain:
Inbound → logistics → operations → outbound logistics → marketing services.
- Inbound processes involve establishment of good relation with suppliers as well as process of receiving, keeping and dispatching inputs.
- Operations refers to all operations of adding value to service delivery.
- Outbound logistics involves activities of collecting, keeping and using sharing valuable information.
- Marketing involves advertising the business to attract more customers.
- Service refers to all processes necessary to maintain the service after handling a client.
B2B Model
Using the B2B model, the firm will major in providing a supportive means of establishing good customer-client relationship that will yield greater long-lasting results. To attain competitive advantage in the industry, businesses need to be enlightened on how to win customers’ loyalty against their competitors (Vuksanovic, et al., 2020). Such methods will include giving gift, educating clients on the need of product just to name a few.
Decision Support Systems
The management consulting business will use a decision support software (DSS) to project revenues, especially during funding rounds and for planning purposes. Revenue projection is a complex process that cannot be completed accurately manually. A DSS is a software capable of accepting and analyzing large volumes of data to project sales and income, simplifying planning and decision-making. The system will also help to facilitate projection of revenues and sales for clients who might need to see the impact of the consultancy services.
Gantt chart
The business will present Gantt charts to clients to show who will be responsible for what tasks, as well as the various tasks, and completion times. An example of such a chart is attachedbelow, showing the collaborative efforts between various departments of the consulting firm and the client.
Conclusion
In conclusion, establishing management-consulting business will be faced with both opportunities as well as threat. Taking advantage of the available market opportunities by utilizing some of the firm’s threat will yield greater gains to the business. However, this will involve multidimensional market strategies to customers by using the porters three strategic approach. On the other hand, overcoming setbacks that revolves around firm threats and internal weaknesses will require it to be more resilient and with greater utilization of management strategies to turning threat to chances and weaknesses to strength.
References
Bolisani, E., & Bratianu, C. (2018). Generic knowledge strategies. In Emergent Knowledge Strategies (pp. 147-174). Springer, Cham.
Habimana, T., Mutambuka, D., & Habinshuti, P. (2018). The contribution of SWOT analysis in the competitiveness of business enterprises in Rwanda. Journal of Economics, Business and Management, 6(2), 56-60.
Jamoza, R. M., & Oloko, M. A. (2018). Effect of generic strategies on sustainable competitive advantage among toll manufacturing companies in Kenya: A case of Orbit Products Africa Limited. International Academic Journal of Human Resource and Business Administration, 3(3), 52-72.
Kamran, Q. (2019). Developing a Holistic Model for Competitive Strategic Management.
Nguyen, T. T. (2017). Management education as an industry and MBA as a product: revisiting joint MBA programs using Porters five forces model. Global Business and Economics Review, 19(3), 356-377.
Puyt, R., Lie, F. B., De Graaf, F. J., &Wilderom, C. P. (2020). Origins of SWOT Analysis. In Academy of Management Proceedings (Vol. 2020, No. 1, p. 17416). Briarcliff Manor, NY 10510: Academy of Management.
Teo, K. L. (2019). Competitive Strategies Framework for Quantity Surveying Consulting Firms in Klang Valley (Doctoral dissertation, UTAR).
VuksanovicHerceg, I., Kuč, V., Mijušković, V. M., &Herceg, T. (2020). Challenges and driving forces for industry 4.0 implementation. Sustainability, 12(10), 4208.