Many have wondered on what exactly a business strategy consulting firms do. To help everyone understand them in a better way, we will elaborate on the definition and the reasons most of the companies hire them.
Business Strategy Consultants: The crux of business strategy is to support the business in generating more profits now as well as in future. Strategy consultants help organizations in identifying emerging trends and developing strategies to cope with them. They help organizations to stay ahead of the curve and beat the competition through superior strategic insights. While operations only look at “How we can achieve it?” strategies mainly address the question of “How we can accomplish this?”
Reasons behind major companies hiring the business strategy consulting firms:
While many wonder why the companies usually outsource or discuss strategies with firms that are not part of the company. While it might sound good for a company to discuss strategies within the company’s boundary and implement them. In practice, this approach has not been very successful. Hence, it is very important to take the help from the business strategy consultants. Strategy consultants leverage their business acumen to provide an unbiased strategic approach and ensure data based decisions making. While the companies seek the help of the consulting firms, at the end of the day, companies take the decisions after thoroughly evaluating all the information and inputs.
Another reason the strategy consulting companies can be of great help is because they usually have tremendous knowledge in the market especially while taking crucial decisions. This is a result of working with many companies. This knowledge can be of a great advantage to the company. Strategy consultants are a great sounding board to bounce off new idea. With an extensive experience in that sector, they can provide valuable advice to the top management and help them in avoiding wrong decisions.
Automotive Industry consulting services ranges from Quality assurance mechanisms, operational excellence to setting up a factory. The consultant’s primary objective is to help the company identify and remove loopholes, increase the process efficiency and performance, help the company enter new markets as well as address the most critical safety issues. The staff who work in the top automotive consultant firms usually have a lot of experience in the Auto industry which can be very beneficial to the automotive companies.
One of the prominent area in Automotive Industry consulting services in India is consulting with the car dealers. Car Dealers prefer using the services rendered by the top automotive consultants to improvise their profitability. The consultants advise them on various factors that can change the way they operate and help improve the processes, staff efficiency. They also provide insights on how they can market themselves and how they can retain the existing customers. Consultants also offer insights about the ways to improve the service department, which is one of the most important element that needs training. Some of the Parent companies prefer hiring automotive consulting firms in India in order to train the dealer’s values as well as in promoting the branding so that dealers universally understand these values and are consistent in their approach. Sometimes the dealers directly get the help from the top automotive consultants as they see the necessity of improvising the way they function.
Another major area of services that an automotive consulting firms in India deal with is the manufacturers. Their work might include optimizing the manufacturing line as well as streamlining the shop floor processes to boost the performance of the plant. They also help the companies in identifying new markets for entry, possible joint ventures, partnerships and efficient procurement.
If you are running a small business and wondering about the process to choose a top management consulting firm, this article will provide some important guidelines to simplify your journey. First you need to identify what type of help your business needs and how to find a business consulting company in completing this task. Below are some very useful tips that can help you in identifying the right consultant:
- Primary Target: Identify the targets that you want your business to achieve. Are you trying to cut down expenses Or Are you planning to increase the operational efficiency of the organization Or Are you looking at ways to increase growth as well as the profitability of your company?
- Experience in the same sector: Choosing a business consulting company which has hands on experience in the same sector can be a boon. Hiring a business consulting company which deals in other sectors might not be of a great help and you might end up paying a lot of money without achieving anything. However, when you choose a Business consulting company in the same sector, they will help you in many aspects from giving orientation to your company on the best practices that are prevalent in the sector to providing you insights of advanced technologies that are used by the competitors. Since consultants might have solved some of the similar problems that your company is facing now, they can give excellent guidance to resolve these issues.
- Knowledge Transfer: Most importantly, you have to ensure that the post-departure of the top management consulting firm, your team is confident and have learned some of the skills required to overcome future problems. In absence of this, the solution won’t be sustainable and you will need outside help again. Development of in-house talent is a major advantage of hiring consultants.
Most small business owners have always dreamed of having their businesses and being their own boss. They want to make all the important decisions without consulting anyone. But running a small business is not as simple as most people assume. A small business can easily go under when the owner doesn’t consult the right people when making management decisions. And that’s why every small business needs the help of a leading strategy consulting firm.
Set realistic business goals and benchmarks
With the help of consultants, you can set goals for your business that which you can achieve. Most business owners are very optimistic and have big ideas that sometimes are not practical. Consultants will utilize their experience to help you maintain organization when developing business objectives.
Consultants can also help a business owner to plan for setbacks and unexpected costs that may cause the business to fall. In most cases, owners don’t have the experience to foresee certain issues that will affect their business in the near future. With the help of an experienced consultant, this is no longer a problem.
There’ll come a time when you, as a small business owner, realize that it’s impossible to do it all by yourself. Management is very taxing and sometimes complicated. Strategy consultants can help your organization to grow by taking care of the management aspect. As business owners get bogged down in certain routine tasks, it’s easy to forget some important aspects of the business that can affect its revenue.
Offering important suggestions
A consultant will also perform a market analysis and suggest ways to better leverage your money. These professionals are also responsible for spotting weaknesses in your target market and give suggestions that will make your business more competitive.
With proper management, your small business will work on achieving its mission and purpose. Remember that the Business Strategy Consultants will help you to come up with a clear purpose or goal which you can focus on achieving. With a clear goal, it will be much easier for your small business to grow and maintain proper organization.
BMGI as the Strategic Advisor and Shanghai based Lnoppen, conducted the 3rd India Hotel Expansion Summit 2013 at The Westin Mumbai Garden City on 29th & 30th August 2013. The event had a representation of Senior Industry leaders across the world including Starwood Group, Marriott International, Holiday Inn, Concept Hospitality, Svenska Design hotels, Keys Hotels, Ten Hotels, Berggruen Hotels and Sahara Hospitality to name a few.
The event was flagged off with forethoughts on trends observed in the “Indian Hotel Industry” by Mr Naresh Raisinghani, CEO & Executive Director, BMGI India. Mr Raisinghani discussed the challenges of development costs, capacity expansion, availability of skilled manpower and business seasonality faced by the industry. Ms Benaifer Jehani, CRISIL concurred with Mr Raisinghani stating significant growth in Tier 2 & Tier 3 cities in the last year. She indicated that Revenue Growth would be subdued at levels of 4-5% with increased operating costs.
Mr Bhatnagar, Westin Hotels discussed 2 market segments “The Developed” and “The Developing”. He reaffirmed that the developed markets need to focus on increase in footfalls, reducing cost of capital, improving visibility and striking right partnerships to achieve targeted RevPar. Increased GDP per capita in developing locations would be a key driver for identification of new locations. Mr Rajiv Puri, Marriot International stressed that Stakeholders and Owners should be educated on aspects of operational & technical expertise, global alliances and new trends in creating brand visibility. Mr Sheikh of Svenska Design Hotels elaborated that new age channels such as Social Media Marketing, Blogs, Virtual Tours and Mobile Optimization will play a key role in branding and would be very cost effective.
An insight on “Green Thinking” for resource conservation and reduction in costs was shared by Mr Kannampilly of Fern Hotels. New technology for LED lighting, HVAC systems and Water management systems were shared by representatives from Crompton Greaves, ALKO Therm, AmpleBit, Coram & Aquanomic Systems.
Substantiating the need for Revenue growth through Innovation Mr Ambarish Raj, Senior Principal Consultant BMGI India covered aspects of “Business Model Innovation” & “Industry Innovation Intensity Analysis”. He shared examples on innovation across the elements of the Business Model from the industry. Some innovations showcased were – value proposition of Ginger Hotels offering superior product at reasonable costs, TAJ Wellington Mews creating an innovative Core Offering for extended stay, CGH Earth Lakshadweep in designing a unique customer experience through ecotourism and many more.
“Understanding Cost per Key” was a refreshing concept shared by industry veteran Mr Partha Chatterjee – Advisor Key Hotels Resorts & Apartments. Another interesting comparison was made by Mr Rajesh Mohan, Head Strategy Planning, Sahara Hospitality Ltd between the reservation system of airlines and hotels and he stressed the need to learn from airlines to drive up revenues using a dynamic reservation system.
The Panel discussion theme was to discuss on how we capitalize on growth opportunities through innovative investment options. Mr Shah – Howrath, shared that the Industry demand is being fueled by Medical tourism, Institutional demand and MICE Segment. It was felt by Mr Puri that there is a need to establish best in class infrastructure in India. For alternate investment routes “Asset Light” models – franchisees and “fee based” models were pointed out by Mr Agrawal of Berggruen Hotels & Mr Puri of Marriot Intl respectively. It was felt that a “single window” licensing system, industry subsidies from government and a new and improved Tourism policy to cover challenges of Infrastructure development will be key enablers for the growth of the industry.
The event acted as an industry platform in discussing key issues and solutions for the Hotel Industry in India.
Every organization cuts costs, in one or more areas. However, cutting corners is confused with spend rationalization. We have seen organizations generally resolve to direct measures like downsizing, travel restrictions, reducing spend on new product development, reducing features from products/services, adopting cheaper alternatives rather than really cost effective solutions and adding multi-level approvals to deter expenditure without effective analysis.
Cost cutting measures as above give you immediate savings but may start destroying the fabric of the organization. Employees start feeling too constrained, spends that can generate higher ROI get discouraged, workload on resources increases, and all this might prove to be detrimental for the long term. Also, when going gets better, these measures get lifted and bring the flab back into the system. Such measures also deteriorate customer experience and affect the brand negatively, which are not as easy to win back later. Think about the cost of cost cutting before taking the measures.
Organizations that take the way of improving performance through initiatives driving an excellence mind set and continuous improvement culture are able to manage both the short and the long better for sustainable business performance. Such organizations achieve the goals by finding the right opportunities and then quickly but systematically exploiting those to achieve spend rationalization without disturbing the organizational eco-system. This is what cost reduction really is.
“Ask not what your country can do for you, ask what you can do for your country.” John F. Kennedy
The recent article in Economic Times* confirmed the looming fears for the Indian Rupee (INR) downslide vis-à-vis the US Dollar. Predictions indicate that Rupee could further devalue to 57 vis-à-vis the USD. The situation is such that some Bankers are not taking a view on INR. Chinese Yuan, Brazilian Real and South African Rand have appreciated against the USD – thanks to current account surpluses and steady economic fundamentals.
Indian Industry watches with dismay as the INR slides and is trying to estimate the fallout of this – erosion of profits due to mounting import bills, loss of competitiveness due to induced price increases
There are several factors that interact with each other to make any economy work. It’s a fine balance and any disruption can have far reaching consequences. India’s current account deficit is at 4.3% of GDP worse than the acceptable number of 3%. Trade deficit (excess of imports over exports) has reached a record high of 185 billion USD. Although RBI has made several symptomatic efforts to address the issues, it has largely been superficial given the impact of higher dollar pay-out on imports and reduced supply of dollars due to lower demand for India’s goods and services. Redemptions of external borrowing by organizations, India’s high oil import bill and the Eurozone crisis are all large contributors to the current issue. However, here are some facts – oil contributes only about 32 to 35% of India’s total import bill. The rate of growth of imports is higher than the growth of exports. India will not meet its targeted growth of exports.
Can the Indian Industry Contribute in Salvaging the Situation and Strengthening the Future?
It is but true that the Indian Government has been slow on policy making and decisions to capitalize on the robust growth and boom time witnessed during 2005-08. However, the Indian Industry can contribute by following a well thought out agenda that can bridge the trade deficit.
Strategic Initiative 1 – Focus on export oriented organic growth
By April/May every year most companies finalize their strategies. Key question here is what percentage of targeted revenue is from – organically developed new products and services and from new international geographies?
Many companies have global ambitions and are looking to reach out. There are several challenges that are faced in such initiatives – selecting the right country and market, understanding customer needs and competitive scenario, right entry strategy and ability to deliver as promised (better than prevailing standards). What has worked so far may not continue to work and hence a mere grudging acceptance of dwindling exports due to the Eurozone crisis will not help
Drive for Innovation is the key here. Some techniques to mitigate the above challenges are as follows –
- Understanding the organization’s core competencies and finding the “customer jobs**” that can be fulfilled through those competencies in identified target markets.
- Following a structured process for “Country Selection/De-selection” for identification of target market (and country)
- Determining “customer jobs” in identified markets and then working to build capability to fulfil those customer jobs
- Establishing strong capabilities in managing a “global supply chain”
The above includes products, services (including export of competencies). A recent interesting example of this was an Indian company “exporting its manufacturing competencies” to turn-around an ailing company in Africa.
Strategic Initiative 2 – Strengthen “Make & Deliver” Capabilities
While most companies have a “Continuous Improvement Program” in place, the key question to ask is “has the program done enough?” If it is has, then why is there increasing movement towards cheaper Chinese imports? Why is the quality of Indian products/services being questioned in international markets? Indian companies may not be happy to rely so heavily on imports as it exposes them to several risks apart from tolerating erratic quality and managing higher inventory (definitely not just-in-time!)..but still “cost as driver” prevails.
The key here is to not get caught in “we have implemented xyz methodology fad” but to truly make “Improvement and Efficiency” as a Cultural Pillar of the organization. Here are some actions to enable movement in this direction –
- Focusing on quality as ability to meet “customer outcome expectations” – doing away with “chalta-hai” attitude
- Specific programs designed to build a “frugal mind-set” in employees – do more with less
- Inculcating the ability to relate to “cost of activity” – currently most employees are not aware of costs of their actions
Strategic Initiative 3 – Conserve Oil and Energy
This should be a key focus. If every organization does their bit, this can add up to a substantial whole. Some actions here can be as follows:
- Replacing raw material that find their roots in “oil”
- Reduction in energy consumption
- Efficiency in utilization of oil and related products
There could be several other actions. The key is relentless focus on the above stated strategic initiatives by the Leadership Team and considering these elements as critical as your routine operations.
Here, literally a dollar saved will be a dollar earned, thereby reinforcing the concept of “every drop makes an ocean”. The impact of this effort will mean increased confidence of the Indian Industry on itself thereby reducing dependence on the imports. Innovation and organic growth shall help spur exports and the whole effort, should over a period of time, work favourably to reduce the trade deficit.
Hence, it’s time for positive action by ensuring that the challenges of uncertainties are faced head-on and that India gets its rightful place in the world economy. Leadership teams will ensure that news items such as “Industrial output belies everybody’s expectations & logs impressive growth rates” dot the headlines landscape.
BMGI is a global consulting firm that works with companies to improve competitiveness and drive growth. BMGI has worked passionately with the Indian Industry as a true partner in the Nation Building Process.
by Ambarish Raj
*- ET dated 10th May 12
** – Customer Jobs to be Done – When a customer buys a light bulb, the job to be done is to “provide light/illumination”. The bulb is a current solution that delivers this.