Strategy COnsulting

Question 1

definition of Strategy Consulting

Answer 1

• A component of management consulting
• Inspired from the military strategy applied to corporate field after world war 2
• Both the industry and practice of helping organizations improve their performance primarily through
• Analysis of existing business problems
• Development of plans for improvement
  Original understanding
   Bring insights
• Market information
   Original ways of working

New definitions
 Has become a commodity
o Not bearing the risks
 Obligation of means, not results

Question 2

History and evolution of Strategy Consulting

Answer 2

The first management consulting firm was Arthur D. Little, founded in 1886 by an MIT professor
* After World War II, a number of new management consulting firms formed, most notably The
Boston Consulting Group, founded in 1963, which brought a rigorous analytical approach to the
study of management and strategy
* Strategy consulting originally developed in the US before spreading to Europe, Japan and since the
1990s to emerging markets
* Strategy consulting has an elitist positioning reflected in the high price paid by clients
* From high level strategic reflection, strategy consulting shifted to operations and
implementation topics for two main reasons:
* Absorb growth
* Stick to reality
* McKinsey is the global leade

Question 3

The BCG Matrix

Answer 3

Proritize: High Growth High Market –> invest till high market share low grwoth (cash cow)

Divest high growht low makret share

kill low market share low growth

No profitability taken into account
* Only 2 dimensions

Question 4

Porter’s 5 forces

Answer 4

Competitetive rivalry
threat of new entry
Supplier power
Buyer power
Threat of substitution
Purely descriptive tool that pre-empts further
analyses

Question 5

The Rule of
Three and Four
(1976)

Answer 5

A stable competitive industry will
never have more than THREE
significant competitors at maturity
* And the industry’structure will find
an equilibrium when the three
companies’ market shares reach a
ratio of approximately 4-2-1

Confirmed true for
decades for prescribed /
mature industries

Application still
questioned for new
dynamic industries
based on fast and
perpetual innovation

Question 6

Experience
Curve
(1968

Answer 6

This theory established a link
between costs and production
experience: More experience –> lower marginal cost with increase of volume

Remains valid in
industries that are
relatively stable, costsensitive, competitive
and production-intensive
* Need to develop an
additional type of
experience in « Shaping
Demand »

Question 7

How are strategy consulting firms organized?

Answer 7

Finance
HR
* Payroll and
accountancy
* Business control
HR
* Recruiting
* Training
* Career Development
IT
* Hardware
* Mobility tools
* Knowledge management
tools
Admin &
logistics
* Assistants
* Slide designers
* Printing and bindin

Question 8

Evaluations and Career Development in strategy consulting

Answer 8

Up or out / Up in or Up out
* Based on evaluations and
Career Committee

18 months: Junior Consultant
/ Associate

3-24 months: Consultant
/ Senior Associate

6-30 months: Senior Consultant

2-3 years: Manager / Project Leader

4-6 years: Principal / Manager

partner /VP

Question 9

How consultants work on a project: issue-based working

Answer 9

Step 1: ‘Conceptualise’ problem
* What problem are we trying to solve?
Step 2: Establish hypotheses/running answer
* What do we think is the root cause of the problem?
Step 3: Specify issues/sub-issues/analyses/data/output
* What do we need to know to test this assumption?
Step 4: Identify tasks/timing
* What tasks are involved in getting there?
* Over what timeframe?
Step 5: Iterate!
* Is our hypothesis on the root cause validated?
* If so, how do we address it?
* If not, what is the actual root cause?

Question 10

what is RUNNING ANSWER OR ‘DESCENDING
ELEVATOR SPEECH’

Answer 10

• Belief as to cause of
  problem
• Preliminary diagnosis
• Fully supported
• Quantified
• Remedy determined
  –>
  RESULT +
  HOW TO GET THERE

Question 11

Recruiting process
in strategy consulting

Answer 11

Part 1 Your background (10-15 min.)
Open discussion on
candidate’s motivations
*Interpersonal fit and
motivations
Part 2 Case study (40 min.)
*Based on a real case / project
*Assessment of your analytical skills
Part 3 Wrap-up (5-10 min.)
Opportunity for the candidate to ask questions

+ tests

Question 12

what is the Case study
Standard approach

Answer 12

Listen and understand
Structure
Analyse
Conclude

Ask USEFUL questions: be prepared to justify your questions!
▪ Don’t get to solutions too quickly
▪ Understand the problem and identify the causes (rephrase, ask questions take notes, take time to think)
▪ Generate hypotheses (have a structure in mind; usually a decision tree)
▪ Then suggest options to address the issues and sub-issues identified (ask for additional data / elements)
You are never asked to find the « right » solution
but a SENSIBLE solution

Question 13

S: - Trading up & trading down

Answer 13

Trading up – offer high end
Trading down- offer robust entry product
- Slow disappearance of the mid level product

Consumer behavior
Everyone makes trade off
Some like fashion, pay high end, But does not like fruit, buy them on discount
An individual is in one box for one product, and in another for a different product