"Strategy consulting" is a very widely used term, promulgated by a vast variety of different consulting service firms. Traditionally strategy consulting work includes a broad range of activities aiming at answering high-level strategic questions in order to find a single ideal competitive position in an industry or market. Therefore, strategy consulting will still be relevant for clients in the future, although strategy consulting work today has gotten a bad reputation for just delivering slideshows and for being an out-dated approach. However, strategy consulting will take place in a changing and increasingly complex business environment and clients will expect more from "modern" strategy consulting. In this article you will find answers to questions like what strategy consulting was and is today, what strategy consulting has to offer to be of value for clients and how strategy consulting compares to digital transformation consulting and implementation work.
Strategy consulting can be understood as assistance with solving a company's strategic questions. Strategy consultants are hired by clients to support them with strategic decision making, which includes the development of corporate or business unit/ divisional strategies (single market, customer or product strategies) or functional strategies (e.g. sales, production or IT strategy). Likewise varied are the management topics addressed by strategy consulting and the providers which claim to provide strategic advice to their clients.
Strategy consulting traditionally has been considered "most prestigious management consulting discipline". The management topics addressed by strategy consulting, which traditionally has been offered by the re-knowned strategy consulting houses like McKinsey and Boston Consulting Group, include the development of strategies, business concepts and business models as well as the implications for the organizational set up of companies. Traditional strategy consulting focusses on data gathering through desk research, surveys and/or interviews, hypothesis-testing, (fact-based) data analysis (markets and customers), setting up a recommendation and subsequently presenting the advice to client management. Strategy consulting always consists of a creative part involving activities to develop new, innovative solutions to the most prevalent strategic questions of clients.
At a fundamental level, all strategy consulting boils down to two very broad options: Clients hire strategy consultants to seek out ways of additional growth (e.g. new market entry, new product development or M&A consulting), or they hire strategy consultants to improve their competitive position through cost reductions or efficiency improvements. Although strategy consulting has been often blamed for just delivering smart concept papers and slideshows which don't have been or can not be implemented within the client organizations, strategy consulting is not dead because this body of work suggests a broad expanse of opportunity – in the face of rapidly changing technologies, globalization, and the inexorably accelerating pace of change, there remain endlessly clever new ways to solve the most prevalent "survival issues" of companies.
In today's complex business environment, strategy consulting has changed remarkably. The traditional way of doing analytical work in strategy consulting has partly become obsolete because client organizations have become savvier and already know a lot about their markets, clients, and strengths and weaknesses themselves, and because — in the face of digitalization — analytical work cannot take place anymore without IT systems support or will be replaced by software tools, respectively (Big Data). And strategy consulting does not limit itself just to strategy development and strategic concepts anymore, because clients expect more than simply an accurate diagnosis of a problem. Since clients want a practical, effective path to implement — one that can generate real bottom-line results and sustainable competitive advantage — strategy consultants need to have the competency and skills to implement proposed solutions. Even the elite strategy consultants today make most of their revenue from implementing ideas, from finding ways to improve clients’ internal processes and from other tasks not traditionally considered “strategy consulting”. Today, client expect from strategy consultants feasible solutions which can be implemented, are tailored to an organization's specific environement and deliver bottom-line results. This makes "modern" strategy consulting more specific, more concrete, more sustainable, and more "collaborative". Clients more and more expect also from strategy consulting work tangible and measurable results within a predictable period of time.
Current developments which are taking place based on the discussions about the digitalization of markets and companies accentuate these trends. Strategy consulting today takes place in a dynamic and complex business environment. The types of questions that strategy consultants are called upon by clients to answer increasingly revolve around digital strategies and business models, digital processes and data. And since the execution of strategy is as is important as ist development strategy consulting cannot go without technological skills. The new approach towards strategy consulting combines digital and creative ressources with the proven industry, methodological and funktional expertise of traditional strategy consulting. Large consulting companies also build so-called «Digital Labs» in order to combine cutting-edge creative with trusted business and technology experience to define and deliver digital experiences for their clients. One can observe or at least assume, therefore, that traditional strategy consulting will be replaced by digital transformation consulting. That's why one can find in today's strategy consulting rankings not only the large strategy consultants but more and more also IT consulting firms and boutique consultants.Overview
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