Here below are some differences between a generalist consulting firm and a specialized boutique:
- Provide the whole range of management consulting services (strategy, operations, marketing, finance, organizational redesign, etc.) to all industries, across a wide geographical range
- Typically larger firms, with long track record and substantial accumulated knowledge base
- Usually multi-regional office array, covering both developed and high-growth emerging markets
- Often structured around industry and/or function practices, to better leverage personal experience
Specialized firms and boutiques
- Typically smaller firms, usually founded by ex-partners from larger generalist consultancies
- Structured around in-depth expertise in and knowledge of either specific functions (strategy, marketing, finance, etc.) or industry
- Smaller, both in terms of number of employees and geographical spread
- Usually more focused on developed markets, where such in-depth niche services are
In the late 1990s, aggressive penetration of emerging markets, globalization, privatization and the new Information Technology industry drove growth in the consulting industry, with established firms growing as fast as 20% p.a. and with new players emerging in the marketplace. There was a huge demand for services and consulting firms were hiring MBAs aggressively on campus.
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After this boom period, the growth stalled for a couple of years in the early 2000s. Earlier, the consulting industry was expected to do as well in good economic conditions, as in bad ones. As the ultimate service industry, Consulting depends heavily on the prospects of large corporations. In good economic conditions, consultants can advise their clients on growth strategies, investment projects and due diligences. In bad economic conditions, clients need advice on down-sizing, business school admissions consulting, cost cutting and disinvestments. However, the rough economy of in the recent past introduced a lot of uncertainty for the consulting firms’ clients, who reacted to the economical downturn by postponing major decisions. This resulted in a sharp decline for the industry: many younger and smaller firms had to withdraw and major players had to downscale their recruiting efforts of admissions consultants in Delhi ncr
From 2004 onwards, the consulting industry recovered growth and firms are now recruiting again and aggressively. At present, most offices are working at full capacity and the outlook for the sector as a whole is very positive. Firms are competing more among each other and with the Investment Banks for the best candidates.
The consulting industry has a very interesting value proposition for a recent MBA graduate: the outlook for the industry is good and looks stable, salaries and bonuses are highly competitive, there is almost no beach time in most firms, and the work is interesting, diverse and enriching.
As we are entering an ever increasingly complex and global world, some clear trends are emerging for the management consulting firms:
- Specialization. Clients are more demanding and ask for consultants specialized in the industry or topic. The major global strategy firms do not want to lose their generalist scope and the ability of their consultants to work across industries. However, they have now more structured organizations across industries and functional lines in order to deal with the increased sophistication of their clients and to successfully compete with specialized firms.
- Implementation. Clients ask for a greater focus on implementation rather than only theoretical recommendations or strategic plans. This causes increasing competition among firms in different segments of the consulting industry, but is also an opportunity for consulting firms to develop long-term relationships with their clients.
- Pay for performance and Measurable Business Results (MBRs). Especially during the dot-com boom, some firms agreed on partial/full equity payment. Clients demand more tangible results and pay according to a performance measure (e.g. cost savings in procurement optimization projects)
- New geographies. The market for Consulting is growing extremely rapidly in China, Russia and Middle East (Abu Dhabi, Dubai). Markets such as Latin America and India are also growing very fast. Major firms are heavily investing in these geographies, opening or expanding offices. They compete aggressively to recruit the candidates who have a connection with these regions or possess the right language skills (Mandarin, Russian, Arabic, etc.).
- Fragmented markets. In some markets, a large number of former employees start their own small consulting firms. For example, in China, this trend has led to a very fragmented market, with hundreds of small and medium-sized firms