Strategic Consulting Services
Sicol-Global Strategic Consulting
Strategy consulting, often referred to as strategy consultancy, strategic advisory or boardroom consulting, is regarded by the majority of consultants as the most ‘high-end’ and prestigious segments within the professional services industry. A strategy is defined as “a plan with the aim of realising long term goals”, and organisations regularly engage with strategy consultants to support them in developing and implementing business strategies. The strategy consulting domain focuses on supporting private sector clients with the development of corporate, organisational or functional strategies and helping public sector organisations and institutions with economic policy.
Strategy consulting market
In 2011, the market for strategic consulting services was estimated to be worth $26.5 billion. In the aftermath of the crisis years global growth was sluggish, slowed by the recovering US and European markets, which jointly represent the overlarge majority of the global consulting industry. From 2014 onwards, the strategy consulting industry picked up, with growth rates of 4.7% in 2015 and 5.8% in 2016, taking the market to just over $30 billion in 2016. Strategy consulting takes around a 12% cut of the overall industry, making it similar in size to HR consulting.
More than in other segments, the development of the strategy consulting industry is closely tied with overall economic growth, with high growth recorded during periods of prosperity, and dropping growth rates during downturns.
Strategy consulting services
The market for strategy consulting services consists of eight disciplines: Corporate Strategy, Business Model Transformation, Economic Policy, Mergers & Acquisitions, Organisational Strategy, Functional Strategy, Strategy & Operations en Digital Strategy.
Corporate strategy, also referred to as strategic management, involves the formulation of enterprise-wide and business unit strategies and goals. Strategy consultants are regularly brought in to support, among others, the design of vision and mission statements, the development of strategic plans and the setup of implementation roadmaps (which outline activities and resources required to implement the plans). Common examples of strategic advisory projects include the assessment of strategic options, supporting business planning processes and the development of growth agenda’s such as market entry strategies (when companies want to enter new regions or launch new products).
Similar to corporate strategy, Business Model Transformation (BMI) also focuses on the design and development of future-proof strategies, with the key difference that it spans fundamental changes in how business is conducted, often triggered by major changes in the external environment. Business Model Transformation in addition has a wider span than strategy, looking at a range of organisational and operational elements and how they interact to achieve a common goal; such as value propositions, customer segments, cost structures and organisational structures. Due to the disruptive nature of technology in recent years, consultants that support BMI engagements in many cases work at the intersection of digital design and IT strategy.
Sicol-Global Strategic Consulting
The Economic Policy service area involves a range of economic advisory services that support governments and international institutions with policy setting. Most offerings cover fiscal policy; which deals with government actions regarding taxation, budgets and spending, monetary policy; which deals with central banking actions regarding the money supply and interest rates, or government interventions across areas such as the labour market, national ownership, housing and many other areas. Further offerings within the segment include impact assessments (such as a socio-economic benefits study), financial valuation analysis in cases of disputes (economic litigation), economic studies for antitrust cases, or competition investigations and merger proceedings, conducted both for corporates or governments authorities.
Strategy consultants are, together with corporate finance advisors, M&A lawyers and investment bankers, also active in the M&A space, with a focus on strategic and commercial activities in the pre-deal phase, although consultancies in many case are too hired to manage the initial period of the post-merger integration phase. Strategy consulting firms serve companies and investors, for instance, with building business cases to understand the economic drivers of mergers or acquisitions, and further down the line, support clients with due diligence work on potential targets. Other areas in which strategy consultants can play a role in M&A include supporting the establishment of alliances and joint ventures, managing divestitures / carve-outs and facilitating Initial Public Offerings (IPOs).
Organisational Strategy looks at the levers an organisation needs to influence in order to, over time, deliver the strategy of the enterprise. Foremost propositions include designing organisational structures and corporate governance, assessing organisational competitiveness, developing human capital strategies and supporting strategic change management programmes. Functional Strategy involves the development of strategic plans and roadmaps for organisational functions, which can range from sales & marketing to finance, HR, supply chain, R&D or procurement.
Over the past, decade strategic management and operational management have increasingly converged, as topics such as process management, operations and technology have become increasingly important elements of strategy execution. Consequently, several offerings which historically were centred around strategic advisory have been expanded to include operational considerations, and as a result the Strategy & Operations domain has gained significant importance. The domain is not only served by strategy consulting firms that have moved towards operations, but also harbours operations specialist that have ramped up their strategic skills and large technology firms that leverage their tech expertise to create an edge. Going forward, the lines between strategy, operations and technology are forecasted to blur further, with an increasing number of consultancies set to play a role in the field, adding competition to the landscape.
In line with the rise of technology, digital strategies have surfaced to the forefront of strategic work, not just enabling business ambitions, but more than ever representing the crux between success and failed strategies, and as a result, the market for Digital Strategy has shown unprecedented growth of late. The service area brings together elements from strategy and IT Organisation, and spans offerings such as developing a strategy for digital operations, the design of a corporate IT or online strategy, drafting approaches for analytics or cloud transitions, as well as high-level work for technology areas such as architecture, governance and application management.
What does a strategy consultant do?
Strategy consultants are hired by clients to support them with strategic decision making, which includes the development of strategy and, to an extent, also the execution of strategic plans. As the responsibility for strategic decision making falls under the mandate of CxO’s and (senior) management, strategy consultants typically work for executives and high-ranked managers. By doing so, strategic advisors can help companies with the definition of their vision, mission and strategy, support them with market entry into a new market or with a shift towards a new business model. Governments and institutions are supported with economic policy setting, while in the case of mergers & acquisitions, strategy consultants typically support the strategic activities of the M&A process, such as setting the M&A strategy, executing the commercial due diligence, creating the merger business case and/or designing the integration roadmap.
At the same time, the work of strategy consultants can cover all major functional strategies, spanning strategic work across the full value chain. For example, strategic advisors can be asked to define commercial strategies in the sales & marketing domain, drafting pricing, customer channel and product market combination strategies. In the case of HR, consultants can contribute to human capital strategies, including talent management business cases, while in the field of operations, strategy consultants are picked to draft operating models and tie those with higher-level business objectives.
In light of the rise of digital and technology as an enabler of strategy, or according to some even a key competitive differentiator nowadays, digital strategy has over the past years grown into a large service area within strategy consulting. Digital strategists support customers with, among others, creating IT strategies, providing plans on how to embrace technology into business strategy, ensuring business functions are well positioned to adopt systems and tools and high-level IT architecture work.
Strategy consultancy firms
Across the globe, there are thousands of consulting firms that provide strategy consulting services, yet the number of firms that have a global reach and reputation is limited to a much smaller number active in the top of the market. Analysts typically distinguish between two types of firms: ‘pure-play’ strategy consulting firms (i.e. focus exclusively on strategy & operations) and ‘strategy practices’ of multi-service firms (a service line of a generalist consulting firm that provides strategy services).